The Class III price lost some of its steam during September, but it still managed to top $14 for the month.
According to the USDA’s announcement of class prices on Oct. 3, the Class III price climbed 50 cents — putting it at $14.30 for the month. The 50-cent gain pales in comparison to the $2-plus gains seen during both July and August. Still, at $14.30, there’s little reason for complaint. Even more so when you consider that the Class III price hasn’t topped $14 in almost two years, and last year at this time the September Class III price was $9.92 — $4.38 less than this September.
Despite the continued advance of the Class III price, the Class IV and Class II prices reversed course during September. The Class IV price dipped 9 cents — to $10.05 for the month. The Class II price fell a nickel — to $10.76.
Strong cheese prices once again drove the increase in the Class III price. As of Oct. 3, the block cheese price still held firmly onto its position at $1.60. That makes for 46 trading sessions in a row that the block price has settled at $1.60. The barrel cheese price settled at $1.53 at the close on Oct. 3.
The question on everyone’s mind now is whether strong milk prices will repeat themselves in October. To a large extent, the answer hinges on whether or not the cheese market can hold onto its present highs throughout October.
So far, the mood is one of cautious optimism.
“There may be some cracks in the cheese market façade,” cautions Phil Plourd, vice president of research with Blimling and Associates of Cottage Grove, Wis. That could open the door to downward movement, he says. However, the cheese market will have to act quickly if October milk prices are to be much different than September.
USDA, Chicago Mercantile Exchange