The October Federal order Class III benchmark milk price is $22.85 per hundredweight, down 49 cents from September but $6.01 above October 2023.

The 10-month average stands at $18.82, up from $17.10 a year ago.

Monday’s Class III futures settlements portend a November price at $20.08; December, $19.39; January 2025, $19.51; and February at $19.43.

The October Class IV price is $20.90, down $1.39 from September, 59 cents below a year ago, and the lowest Class IV in five months. Its average stands at $20.71, up from $18.93 a year ago.

Churns ran strong

You’ll recall September saw a 0.1% uptick in milk production from a year ago, and components were up as well. The September Dairy Products report shows where the milk went.

Cheese production totaled 1.160 billion pounds, down 3.1% from August and only slightly above September 2023. Year to date, 10.7 billion pounds had been produced, up 0.5% from 2023.

Italian cheese output was up 1.5% from a year ago. American was down 3.7% and Mozzarella was up 2.7%.

Cheddar output dropped to 311.8 million pounds, down 9.6 million or 3.0% from August and down 8.2 million pounds or 2.6%, from a year ago. YTD Cheddar stood at 2.9 billion pounds, down 6.5% from a year ago.

Butter production, at 159.2 million pounds, was virtually unchanged from August but up 16.1 million pounds or 11.3% from a year ago. YTD butter was at 1.7 billion pounds, up 5.8%.

Yogurt production totaled 431.1 million pounds, up 7.1% from a year ago.

Dry whey output was 4.2% from August but down 13.8% from a year ago. Stocks were down 3.1% from August, and down 31.9% from a year ago.

Nonfat dry milk output was down 1.6% from August, but up 14.3% from a year ago.

Stocks fell 4.2% from August, but were up 3.8% from 2023.

Skim milk powder production was up 5.8% from August, but was down or 21.4% from a year ago.

GDT up 4.8%

GDT butter led the jump in Tuesday’s Global Dairy Trade auction where the weighted average was up 4.8%, following a 0.3% decline on Oct. 15. Volume totaled 80.7 million pounds, down from 85.9 million on Oct. 15. The average metric ton price, at $3,997 U.S., was up $145.

Butter was up 8.3%, after slipping 0.3% on Oct. 15. Anhydrous milkfat was up 4.6% following a 0.3% gain. Cheddar was up 4.0% and followed a 4.2% rise. Mozzarella was up 0.9% after plunging 8.2% last time.

Whole milk powder was up 4.4%, unchanged last time, and skim milk powder was up 4.0%, after falling 1.8%. Buttermilk powder was up 2.1%. The only drop was on lactose, down 6.1%, after dropping 5.8% on Oct. 15.

StoneX says the GDT 80% butterfat butter price equates to $3.0932 per pound U.S., up 21.9 cents from Oct. 15, and compares to CME butter which closed Tuesday at a bargain $2.6750. GDT Cheddar, at $2.2559, was up 12.3 cents, and compares to Tuesday’s CME block Cheddar at $1.79.

GDT skim milk powder averaged $1.2925 per pound, up from $1.2452, and whole milk powder averaged $1.6841 per pound, up from $1.6115. CME Grade A nonfat dry milk closed Tuesday at $1.3950 per pound.

CME prices mixed

Cash Cheddar block cheese closed Friday at $1.8375 per pound, down 6.25 cents on the week, lowest since May 31, 24.25 cents below where it stood on Oct. 1, but was still 17.25 cents above a year ago.

The barrels fell to $1.86 last Thursday but finished Friday at $1.8675, down a quarter-cent on the week, down 27.75 cents from Oct. 1, and 22.75 cents above a year ago.

Sales totaled 12 lots of block on the week and 57 for the month of October, up from 34 in September. Barrels totaled 4 on the week and 28 for the month, up from 21 in September.

The blocks were offered 0.75 cents lower Monday and lost 4 cents Tuesday Election Day on a sale, dropping to $1.79, lowest since May 2.

The barrels also lost 0.75 cents Monday on an offer and were offered 3 cents lower Tuesday, dipping to $1.83, lowest since April 29, but 4 cents above the blocks.

Dairy Market News says some Cheddar and/or Italian style cheesemakers report that customers were adding to orders, in fact a few may be oversold. Others said the bullish push over $2 per pound created hesitation, despite prices settling back since then.

Western cheesemakers have a healthy demand for milk. However, milk is tighter in the southwest as production is trending down. Domestic cheese demand is generally steady for most varieties, with Swiss demand stronger than a year ago.

International demand is steady to stronger, with bookings for first quarter 2025 taking place, according to DMN.

Butter saw some ups and downs on the week but closed Friday at $2.67 per pound, 2.50 cents lower, 8 cents lower on the month, and 43.75 cents below a year ago. There were 9 sales last week and a whopping 318 for the month, up from 102 in September.

Monday’s butter was up a half-cent, with 10 loads traded, and stayed put Tuesday at $2.6750.

Butter makers say demand is on par with recent weeks. Prices in the $2.60 to $2.70 range has given incentive to re-enter the market, though food service demand has been sluggish, particularly in the national chain sector.

Butter production is generally strong in the West. Cream is widely available, with some being bought and delivered to more eastern regions. Butter demand from domestic and international buyers is steady, says DMN.

The powder closed Friday at $1.3775 per pound, up a quarter-cent on the week, up 2 cents from its Oct. 1 perch, and 19.25 cents above a year ago. There were 34 sales on the week and 120 for the month, up from 118 in September.

The powder was unchanged Monday, with 6 sales put on the board. It was bid 1.75 cents higher Tuesday, to $1.3950, highest since Sept. 11.

Dry whey was unchanged last week, holding at 60.50 cents per pound, a quarter-cent higher than its Oct. 1 print, and 21.75 cents above a year ago. There were 4 sales on the week and 46 for the month, up from 38 in September.

The whey was unchanged Monday but jumped 1.25 cents Tuesday, hitting 61.75 cents per pound, highest since Aug. 1, with 4 sales on the morning.

Feed ratio up again

A higher All Milk Price and lower soybean price nudged the September milk feed price ratio higher, advancing for the seventh time in the past eight months. The latest Ag Prices report shows the September ratio at 3.00, up from 2.79 in August, and compares to 1.88 in Sept. 2023.

The All Milk Price averaged $25.50 per cwt., with a 4.15% butterfat test, up $1.90 from August which had a 4.09 test, and was $4.60 above September 2023, which had a 4.08% test. It is at the highest All Milk price since October 2022.

The national corn price averaged $3.98 per bushel, up 14 cents from August but $1.23 below a year ago.

Soybeans averaged $10.20 per bushel, down a dime from August and $3.00 per bushel below a year ago.

Alfalfa hay averaged $172 per ton, down $3 from August and $53 per ton below a year ago.

The September average cull price for beef and dairy combined was at $136 per cwt., down $6 from August, but $22 above September 2023, and $64.40 above the 2011 base average.

Milk production margins moved to the highest level since September 2014, at $16.99 per cwt. and were $1.85 per cwt. above August, according to dairy economist Bill Brooks, of Stoneheart Consulting in Dearborn, Mo.

“Income over feed costs in September were just short of the record high set in September 2014 at $17.03,” he said, “and above the $8 per cwt. level needed for steady to higher milk production for the 11th month in a row. Input prices were mostly lower in September with all three remaining in the top eleven for September all-time. Feed costs were the ninth highest ever for the month of September and increased five cents per hundredweight from August.”

“Milk income over feed costs for 2024, (using Oct. 31 CME settling futures prices for Class III milk, corn, and soybeans plus the Stoneheart forecast for alfalfa hay) are expected to be $13.53 per cwt., a loss of 41 cents per cwt. versus last month’s estimate.

Income over feed in 2024 would be above the level needed to maintain or grow milk output and up $5.53 from 2023’s level,” says Brooks.