MD_DA950 Dairy Markets at a Glance Report 47 - Released on November 23, 2022 CME GROUP CASH MARKETS (11/23) BUTTER: Grade AA closed at $2.9475. The weekly average for Grade AA is $2.9258 (+0.0113). CHEESE: Barrels closed at $1.8175 and 40# blocks at $2.1500. The weekly average for barrels is $1.8217 (-0.1873) and blocks, $2.1833 (-0.0427). NONFAT DRY MILK: Grade A closed at $1.3975. The weekly average for Grade A is $1.4142 (-0.0263). DRY WHEY: Extra grade dry whey closed at $0.4400. The weekly average for dry whey is $0.4400 (N.C.). BUTTER HIGHLIGHTS: In the Northeast, cream is becoming more available, and contacts note some loads have been freed up amid declines in ice cream production. Contacts in the Central region say spot loads of cream are available at multiples below 1.20 again this week. In the West, more cream is available for sale ahead of Thanksgiving, at lower multiples. Regional stakeholders relay strong demand from Class II processors and butter makers. Some butter makers in all regions say they are making use of cream availability to run active churning schedules this week. Some plants have days off later this week and into the weekend, in the Central region. Food service demands are steady in the Northeast and West, and contacts in these regions say some retail stores are purchasing loads of butter in preparation for the next wave of winter holidays. Some Central region butter makers say they are behind on order fulfillment. Spot butter inventories are tight in the Northeast and West. Bulk butter overages range from 5 to 18 cents above market, across all regions. CHEESE HIGHLIGHTS: Cheese makers in the Northeast and West say milk is available, allowing them to run busy production schedules. In the Midwest, cheese production varies: some plants are taking advantage of lower spot milk prices to run busy schedules throughout the holiday week, while others are taking a day or two off. Some Midwest cheese makers say spot loads of milk are priced similar to prior weeks, while others relay discounts up to $4.50 under Class. In the Northeast, food service cheese demand is noted to be steady and retail demand is strong. Midwest cheese makers say orders for curd and barrels are slowing, while they are busy fulfilling retail/food service cheddar and Italian style orders. In the West, steady demand is present for retail and export loads of cheese. Meanwhile, food service demand is mixed in the region. Cheese loads are available in the Northeast and West. In the Midwest, cheese availability varies across different varieties. FLUID MILK: Milk production across most regions of the country is steady or increasing. Eastern region milk production faced a severe snowstorm in the upper portion of the region last week through the weekend that temporarily boosted Class I sales. Conditions are shifting back to normal. Cheesemakers in the Central region are taking advantage of heavier milk discounts this week, as Class I demand edges lower. In the West region, limited tanker availability is delaying some milk deliveries in the Pacific Northwest area of the region. Meanwhile, Class I demand is mostly unchanged in the West. Condensed skim spot availability is improving. Demand for contracted loads is declining in some regions of the country. Cream demand is active as higher production of sour cream, cream cheese, and butter pull on available supplies. Cream multiples, All Classes, for the week are 1.32-1.38, East; 1.18 to 1.27, Central; 1.05 to 1.29 in the West. DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices are unchanged in the Central and Eastern regions but are generally up in the West. As farm milk production improves in the West, so does production of NDM. Dry buttermilk prices are steady to lower in the East and Central regions. In the West, the price range for dry buttermilk was unchanged this week. Stocks are consistently up throughout the regions, while spot trading is inconsistent. Dry whole milk prices are unchanged, with light trading this shortened holiday week. Dry whey prices differ over the regions. In the East, the price range for dry whey shifted lower, but is unchanged in the Central, whereas mixed in the West. Whey protein concentrate 34% prices are unchanged. Production remains steady and inventories are generally tight. Lactose prices are unchanged. Spot market activity is slow as load consistently moves through contracts. Rennet and acid casein prices are steady. INTERNATIONAL DAIRY MARKET NEWS: WESTERN EUROPE: For several weeks, weekly milk collections in Germany, France and several other European countries have stabilized thanks to mild fall temperatures. The current milk volumes are now ahead of previous year collections, although the second half of 2021 was noted for its weak milk production. Processors have plenty of milk available for the manufacture of dairy products and dairy ingredients. Industry contacts suggest that without a revitalization of dairy product demand, milk prices may come under some pressure, and processors may need to adjust the price provided to farmers for the milk. EASTERN EUROPE: The strong pace of Eastern European milk production is continuing into the low point for the seasonal milk production year. Milk production in Poland, Belarus, and the Czech Republic has maintained growth above 2021 for much of the year. Late last week, Ukraine, Russia, Turkey and United Nations representatives were able to reach an agreement to extend the deal that will keep three Black Sea ports open for another 120 days. The deal will allow safe passage for the shipping of grain and fertilizers from Ukraine and Russia, two of the largest grain exporters in the world. Had an agreement not been reached, the deal may have lapsed on November 19. NEW ZEALAND: In New Zealand, October is typically the month with peak seasonal milk production. However, late into the new season milk production remains in the recovery mode. In spite of record farmgate milk prices, declines in annual milk production have been prompted by dairy farmers who choose exit farming. Meanwhile, New Zealand's dairy farm expense adjusted higher 17 percent year-over-year, with noteworthy rises in fertilizer, fuel prices and interest rates. A positive for New Zealand milk producers was the recent increase in the whole milk powder price at the latest GDT event. AUSTRALIA: In Australia, contrary to high milk prices and decent weather early in the production season, Australia's milk output lags. The milk production season so far has undergone extended drought, heavy flooding, and farm labor shortages to name a few challenges. Meanwhile, as advances in Australia's share of the global export market erode, caused by stagnation in Australia's milk production, other major milk producing countries are taking advantage of the void. In the interim, the dependence on New Zealand's milk is growing as Australian processors look to make purchases to fill milk shortages, around the uptick in domestic demand for dairy products. SOUTH AMERICA: Milk output in the region is slowly growing, as spring weather has been generally mild in the dairy centric areas of the region. Dry weather continues to be an issue for crop output and feed quality. Wheat harvest setbacks in Argentina are being reported due namely to dry soil conditions along with intermittent frosts, brought on by La Nina weather patterns. Dairy processing has, as was mentioned, been reported as at least a little smoother than it was in the fall/winter. Prices of skim milk and whole milk powder were unchanged this report week. NATIONAL RETAIL REPORT: Total conventional dairy ads decreased 1 percent, while total organic dairy ads increased by 3 percent this week. Conventional ice cream in 48 to 64- ounce containers remained the most advertised dairy product, while appearing in 2 percent more ads this week. There was no change to this item's weighted average advertised price of $3.51. OCTOBER MILK PRODUCTION (NASS): Milk production in the 24 major States during October totaled 18.1 billion pounds, up 1.4 percent from October 2021. September revised production, at 17.5 billion pounds, was up 1.5 percent from September 2021. The September revision represented a decrease of 13 million pounds or 0.1 percent from last month's preliminary production estimate. Production per cow in the 24 major States averaged 2,021 pounds for October, 18 pounds above October 2021. The number of milk cows on farms in the 24 major States was 8.93 million head, 42,000 head more than October 2021, and 1,000 head more than September 2022. OCTOBER COLD STORAGE (NASS): On October 31, U.S. cold storage holdings of butter totaled 239.6 million pounds, down 10 percent from the previous month, and down 14 percent from October 2021. Total American natural cheese holdings totaled 830.8 million pounds, down 1 percent from the previous month, and down 1 percent from October 2021. Total natural cheese stocks were 1.448 billion pounds, down 1 percent from last month, and down slightly from October 2021. AUGUST MAILBOX MILK PRICES (FMMO): In August 2022, mailbox milk prices for selected reporting areas in Federal milk orders averaged $23.54 per cwt, down $1.26 from the July 2022 average and up $6.66 per cwt from the August 2021 average. The component tests of producer milk in August 2022 were: butterfat, 3.90%; protein, 3.14%; and other solids, 5.78%. OCTOBER MARKET SUMMARY AND UTILIZATION REPORT (FMMO): During October, 13.0 billion pounds of milk were received from Federally pooled producers. This volume of milk is 16.5 percent higher than the October 2021 volume. Regulated handlers pooled 3.5 billion pounds of producer milk as Class I products, down 3.0 percent when compared to the previous year. The all-market average Class utilization percentages were: Class I = 27%, Class II = 9%, Class III = 58%, and Class IV = 7%. The weighted average statistical uniform price was $23.38 per cwt, $0.70 higher than last month and $5.44 higher than last year. DECEMBER ADVANCED CLASS MILK PRICES BY ORDER (FMMO): The base Class I price for December 2022 is $22.58 per cwt, a decrease of $1.51 per cwt when compared to November 2022. A Class I differential for each order's principle pricing point (county) is added to the base price to determine the Class I Price. For December 2022, the advanced Class IV skim milk pricing factor is $11.78 per cwt, the Class II skim milk price is $12.48 per cwt, and the Class II nonfat solids price is $1.3867 per pound. The two-week product price averages for December 2022 are: butter $2.8921, nonfat dry milk $1.4902, cheese $2.0735, and dry whey $0.4749. NOVEMBER RETAIL PRICES (FMMO): U.S. simple average prices are: $4.41 per gallon for conventional whole milk, $4.36 per gallon for conventional reduced fat 2% milk, $4.74 per half gallon organic whole milk, and $4.74 per half gallon organic reduced fat 2% milk. Information for the period November 21 - 25, 2022, issued weekly Published by: Dairy Market News - Madison, WI ROMAN CARAMAN, 608-422-8593 Email: roman.caraman@usda.gov Additional Dairy Market News Information: Dairy Market News (DMN) by Phone: (608)422-8602 DMN Website: https://www.ams.usda.gov/market-news/dairy DMN MARS (My Market News): https://mymarketnews.ams.usda.gov