November FMMO Class I base price down slightly
The November 2014 federal order milk marketing order Class I base milk price is $24.06/cwt., down 13¢ from October 2014, but $3.86 more than November 2013.
Through the first 11 months of 2014, the Class I base average is $23.35/cwt., up $4.65 from the $18.70/cwt. average for January-November 2013.
Cold storage report mixed
USDA’s September Cold Storage report contained mixed news.
Butter stocks totaled 146.1 million lbs. on Sept. 30, down 11% from Aug. 31, and 37% less than Sept. 30, 2013.
Total natural cheese stocks, at 1.01 billion lbs., were down 3% from August 2014, and down 5% from September 2013. American cheese, at 631.3 million lbs., was also down 3% from last month, and down 5% from a year earlier.
Dave Kurzawski, FCStone, characterized the report as bearish vs. market expectations for butter, but bullish for cheese.
“We saw a slightly lower-than-usual decline in (butter) stocks from August into September, and that likely led to the higher-than-expected quantity in storage,” Kurzawski said. “Given that cheese stocks came in well below expectations, this may be the result of a slightly stronger movement into butter production vs. cheese production for the month, but we will have to wait for next week’s dairy products report to verify that. We wouldn’t look for this report to cause any major shakeup on the cash butter futures market, as futures have shown little change since the report was released.”
“Cheese stocks saw larger-than-expected draw-downs last month,” he continued. “This result may lend some support to the Class III market overnight, due to the value differential between spot equivalents and where November and December contracts are trading.”
Eric Meyer, HighGround Dairy, termed the report bullish vs. market expectations.