Supply and demand are constantly affecting pricing in the dairy industry.
Updated every Friday, IPAP’s weekly market recap report offers the latest figures, insight and trends, courtesy of the experts at the U.S. Department of Agriculture. IPAP’s report presented here hones in on barrel cheese, block cheese and butter.
Aug. 3-7, 2020 (Week 32)
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|Market||Aug. 3||Aug. 4||Aug. 5||Aug. 6||Aug. 7||Weekly Avg.||Previous Avg.||Prior Year|
“Food service pipelines showed signs of being somewhat fulfilled, as demand has ebbed in that sector. Additionally, cheese stock reports in the coastal regions are growing, while Midwestern contacts report mostly committed inventories. Milk is widely available, and cheese market participants do not expect this to turn soon. Midwestern spot milk prices ranged from $2 to $5 under Class. As such, cheese production is busy. Cheese market prices had a resolutely bearish week. That said, contacts say that U.S. cheese market tones are expected to be more competitive with international prices soon, at this rate.”
“The butter market price caught some contacts by surprise, dropping into the low $1.40s early in the week. However, prices corrected back into the mid-$1.50s by Thursday. Undoubtedly, there is some uncertainty regarding butter market tones. Food service sales have fallen off. Seasonal demand, in general, is lackluster. A number of butter producers report simply churning for fall demand and/or governmental purchasing. There is plenty of cream for the churn, as multiples are falling in the 1.10s and 1.20s in the West and Midwest, respectively. That said, in the East, 1.30s multiples have butter makers clearing fewer spot cream loads. Western contacts relay print butter is tighter, while bulk butter is available.”
Sources: USDA Dairy Market News/CME Group