Some recovery in Class III futures has come just in time for the Q1 2025 DRP deadline on Friday. Producers who still need coverage should take a close look with floors back over $18.50 for premiums under 20 cents. With the calendar heading into mid-December next week, the January pricing period kicks off. As of now, January Class III is pricing about $1.81 cheese and over 70-cent whey. At least on the cheese side, spot markets will need to gain ground over the next few weeks to support these levels.
Today’s Highlights
- The CME dry whey market continues to hit new year-to-date highs, climbing two cents to settle at $0.7500 per pound. No lots traded. Spot blocks also advanced, rising to $1.7500 per pound, a two-cent gain. But barrels lost ground, easing to $1.6750 per pound, $0.0125 lower. Two lots of blocks and five loads of barrels changed hands. Butter prices dipped slightly, down a quarter cent to $2.5275 per pound. Trading was heavy at 14 loads. The NDM market was quiet.
- The US NDM/SMP price of $1.38 per pound remains well above competitors New Zealand ($1.26) and the EU ($1.25). But cheese and butter are still more competitively priced. US cheese sits at $1.73 per pound, compared to $2.13 in New Zealand and $2.28 in Europe, while US butter’s $2.53 per pound is at a discount to $2.96 in New Zealand and $3.60 in the EU.
- Inflation ticked higher in November, up 0.3% on the month and +2.7% year-over-year, compared to +0.2% and +2.6% in October. That was the biggest monthly increase since April, but was in line with analysts’ expectations. The food index climbed 0.4% versus October and +2.4% on the year, while grocery prices advanced 0.5% and +1.6%, and food-away-from-home prices lifted 0.3% and +3.6%.
