CME block cheese climbed to its highest price since November 2014 in the Labor Day holiday-shortened week, closing Friday at $1.9975 per pound, up 6 3/4-cents on the week and 33 1/2-cents above a year ago.

The barrels finished at $1.7425, a half-cent higher on the week and 24 1/4-cents above a year ago, when they fell 14 1/2-cents.

The blocks hit $2 per pound Monday while the barrels jumped 5 3/4-cents to $1.80. The fuse was lit and the blocks were propelled 5 1/4-cents Tuesday, hitting $2.0525, the highest price since Nov. 10, 2014.

The barrels added 2 cents Tuesday, reaching $1.82, highest since Nov. 9, 2016, but were a whopping 23 1/4-cents below the blocks.

Cheesemakers in the Midwest continue to report mostly positive sales, according to Dairy Market News. Food service orders increased, as many schools have returned. Cheese production is steady. Milk handers suggest cheese producers are “somewhat satisfied” with their internally sourced milk supplies. Spot prices ranged 50 cents under to $1 over Class III.

In week 36 last year, prices were $1 to $2 over, and in 2017 they were discounted from $2 to $4 under class. DMN adds that Hurricane Dorian, which affected mostly the Southeastern portion of the country, kept milk loads in the upper Midwest last week.

Western cheese demand is active and export sales have remained stable despite higher U.S prices. Domestic cheese requests are on the up side. Cheese needs for school lunch programs and the demand for the football season are helping maintain consumption at a high level. Inventories have declined a bit. Processing is steady, with manufacturing plants running close to full capacity.

Cash butter remains under pressure and closed Friday at $2.1725 per pound, down 1 3/4-cents on the week, lowest CME price since July 6, 2018, and 5 3/4-cents below a year ago.

The butter was up a quarter-cent Monday and gained 2 1/2-cents Tuesday, hitting $2.20, with 13 cars exchanging hands on Monday and 15 more on Tuesday.

FC Stone’s Early Morning Update stated, “The ‘two-teens’ has proven to be an area of support in the past, but if we keep producing butter like we have than more downside for this market is certainly possible. For now, however, we’re expecting that both butter and cream demand will improve in the coming months and that may prolong the trade around current levels.”

DMN reported that with the holiday weekend behind them, butter makers continued to see holiday-rate cream prices last week. Cream availability from the West and within the region remained intact and churning was on the rise. August sales were bullish and some producers struggled to keep up.

Imports have increased from Oceania and EU butterfat is a bargain, says DMN, but “butter markets have been a bastion of steadiness in 2018 and 2019, therefore contacts are reticent to suggest markets will slip from their range-bound position, at least in the near term.”

Western butter makers convey that cream availability fluctuated as demand from ice cream and other Class II processors ebbed and flowed last week. Cream moving to the churns was heavy through the holiday weekend but supplies thinned into the week.

With ice cream manufacturing slowing and school milk bottling active, butter manufacturers expect more cream to head to the churns. Butter output is increasing as the push toward the fall holidays and baking season begins. Inventories are stable. Food service demand remains strong but retail is modest, according to DMN.

Grade A nonfat dry milk moved three-quarter cents higher last week, closing at $1.0475 per pound, 13 3/4-cents above a year ago.

The powder was down three-quarters Monday and inched a quarter-cent lower Tuesday, sliding to $1.0375.

CME dry whey closed Friday at 39 1/2-cents per pound, up a half-cent on the week but 12 cents below a year ago.

It dropped a penny and a half Monday and stayed there Tuesday at 38 cents per pound.

Butter and powder

Preliminary data showed July 50-State milk output at 18.3 billion pounds, down 0.2% from July 2018. The July Dairy Products report shows where that milk went.

Total cheese output hit 1.09 billion pounds, up 2.3% from June and 0.5% above July 2018. Year-to-date cheese output is at 7.6 billion pounds, up just 0.7% from a year ago.

Wisconsin produced 282.2 million pounds of the July total, up 1.9% from June but 2.1% below a year ago.

California produced 210.3 million pounds, up 3.7% from June but 0.4% below a year ago.

Idaho contributed 87.1 million pounds, up 1.2% from June and 1.7% above a year ago.

Minnesota output slipped to 60.6 million pounds, down 1.0% from June and 0.5% below a year ago.

New Mexico produced 76.7 million, down 0.4% from June but 2.0% above a year ago.

Italian cheese totaled 465.9 million pounds, up 0.6% from June and 0.7% above a year ago. YTD Italian stands at 3.3 billion pounds, up 2.4%. Mozzarella output totaled 370.3 million pounds, up 0.8% from a year ago, with YTD at 2.6 billion pounds, up 4.1%.

American type cheese totaled 436.1 million pounds, up 2.2% from June but 1.1% below a year ago, with YTD at 3.0 billion pounds, down 1.5%.

Cheddar, the cheese traded at the CME, totaled 307.4 million pounds, up 300,000 pounds or 0.1% from June but 17.8 million pounds or 5.5% below a year ago. YTD Cheddar is at 2.16 billion pounds, down 1.3%.

Butter output slipped to 142.7 million pounds, down 2.1 million pounds or 1.5% from June but was a hefty 8.1 million pounds or 6.0% above a year ago. YTD butter is at 1.14 billion pounds, down 1.1% from 2018.

Yogurt output, at 350.5 million pounds, was down 2.9% from a year ago, with YTD at 2.5 billion pounds, down 2.2%.

Dry whey totaled 82.1 million pounds, down 1.0% from June and 8.9% below a year ago, with YTD at 552.1 million pounds, down 10.9%. Stocks totaled 65.5 million pounds, down 4.1% from June and 15.6% below those a year ago.

Nonfat dry milk production totaled 168.8 million pounds, up 8.3% from June and 12.4% above a year ago. YTD powder is at 1.15 billion pounds, up 1.7% from 2018. Stocks climbed to 291.2 million pounds, up 2.4 million pounds or 0.8% from June but were 26.2 million pounds or 8.3% below the 2018 level.

Skim milk powder fell 36.7 million pounds, down 7.7 million or 17.3% from June and were 10.8 million or 22.7% below a year ago. YTD skim hit 273.4 million pounds, down 17.4% from a year ago.

Columnist Lee Mielke wraps up the week’s dairy industry news.

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