Editor’s note: The following are available market reports and futures data as of November 16, 2007.

Butter

Butter prices were lower this week at the Chicago Mercantile Exchange (CME), losing 1 cent on cash trading to close the week at $1.3750. Activity has been heavy this week at the CME with 30 sales recorded. Through 12 trading sessions, November sales are 70, already the second highest monthly total behind the 87 loads sold in September. Print orders have been strong ahead of the Thanksgiving holiday period. Retail, club store, and food service orders have been strong.

Features are sporadic across regions. Noted features in the Midwest for private labels are $1.45 to $2.00 per pound, while brands were in ads at 2 for $5 to $7. Printers were running full and hard to fill in orders. Churning has been active to process available cream supplies. Additional prints are being made from microfixed butter.

Holiday cream-based items such as cream cheese, sour cream, dips, egg nog, custard, whipping cream, and aerosol cream, continue to be produced to meet good orders.

Export interest remains good for both 80 percent and 82 percent butterfat butter. Several producers are waiting for the holiday orders to clear up before committing any stocks or future production to export channels. According to FAS, butter and milkfat exports for the first nine months of the year total 47.1 million pounds, up 145 percent from the same period last year. Exports totaled 7.5 million pounds during August and 15.7 million pounds during September.

Cheese

The cheese market remains firm with blocks leading the way. Reported export interest in current cheddar and last-minute holiday orders continue to keep supplies tight. Producer inventories are limited though plants are able to make additional product with limited to regular lead times. Packagers have needed more overtime to fill and ship orders.

Many packagers and processors will be down one or more days next week for the holiday observance, reducing bulk cheese needs. Cheese production is steady to heavier as milk intakes rebound seasonally. The Kansas City Commodity Office (KCCO) announced contracts were awarded to sell to Commodity Credit Corporation between 7.9 and 42.1 million pounds of mozzarella under Solicitation MCD4-051 for July – December 2008 delivery. KCCO was seeking between 12.6 and 66.4 million pounds under this solicitation and may issue a supplemental solicitation at a later date.

According to the Foreign Agricultural Service, exports of cheese and curds for the first nine months of 2007 total 155.3 million pounds, up 37.7 percent from the same period in 2006.

Fluid milk

Milk production is increasing in Florida and New Mexico, strong in Utah and Idaho, and trending about steady throughout the rest of the nation. Retail demand is encouraging milk intakes into some Class I facilities in the Midwest.

As the Thanksgiving holiday drew near and schools recessed, Class I demand was expected to wane. Consequently, milk intakes into manufacturing operations are expected to increase. With some Class II facilities ceasing operations during the next week, excess milk volumes are expected clear into Class III and IV plants. Some handlers are anticipating processing problems during the holiday week, particularly in Utah, Idaho and California where milk is already ample.

Condensed skim interest is steady for the contractual demand and light on a spot basis. Cream supplies are mixed. Disparate availability may be a reflection of location and a willingness to pay to ship cream. Cream prices are trending higher in line with the CME AA butter price.

Dry products

Casein, whole milk and dry whey markets are trending steady to firm whereas all other dry product markets are reported with a weak market tone.

Production of dry dairy products was expected to increase as milk was diverted to manufacture during the Thanksgiving holiday.

Supplies of non-fat dry milk (NDM) are heavy throughout the U.S. NDM demand is light as buyers opt to wait for further price decreases before making any additional purchase commitments.

Buttermilk production is heavy and often limited by available dryer time due to heavy influxes of condensed skim at some locations. Dry buttermilk stocks are building for the light interest.

Whey inventories are in balance to somewhat short of buyer interest. Demand is improving for both domestic and export sales. Supplies of WPC and lactose exceed buyer interest, encouraging lower prices to be reported.

August mailbox milk prices (AMS & CDFA)

In August 2007, mailbox milk prices for selected reporting areas in Federal milk orders averaged $21.47, down $.02 from the July 2007 record-setting month.

The component tests of producer milk in August 2007 were: butterfat, 3.57 percent; protein, 2.97 percent; and other solids, 5.71 percent.

On an individual reporting area basis, mailbox prices increased in all Federal milk order reporting areas except six, and ranged from $26.14 in Florida to $20.11 in New Mexico.

In August 2006, the Federal milk order all-area average mailbox price was $11.92, $9.55 lower.  PD