SPOT CHEDDAR RETREATED to the low $1.90-per-pound range in early October. Just one month earlier, blocks had moved to the highest levels in over two years at $2.20-plus per pound, while spot Cheddar barrels pushed to a record high, climbing to over $2.60 per pound on the CME.
CHEDDAR BARRELS HAD VAULTED TO RECORD HIGHS as processors and retailers alike sought out supplies to make processed cheese. By early October, reports began to surface that barrel supplies were ample. USDA’s latest Dairy Products report verified that notion as total cheese production rose for two consecutive months year-over-year. This production growth took place at a time when cheese output typically slows.
STRONGER CHEESE PRICES STILL PREVAIL in the world’s two largest exporting regions, with Cheddar trading for $2.09 per pound at New Zealand’s Global Dairy Trade and Edam fetching $2.18 per pound in Germany. European Mozzarella netted nearly $2.40 per pound.
AFTER TRADING FOR OVER $3 PER POUND from May to mid-September, butter slipped to the $2.60 range. Down over 50 cents in the last month, that price represented the lowest value since January. USDA reported that butter production posted a new August monthly record.
AS CHEESE AND BUTTER PRICES RETREATED, so did futures. October-to-December Class III contracts had averaged $22.40 in mid-September and slid to $21.75 by mid-October. Likewise, Class IV dropped from $22.60 to $21.10. Meanwhile, new-year contracts showed less movement as January-to-April 2025 Class III shuffled from $20 to $19.85 and Class IV shifted from $21.60 to $21.10 during that same time comparison.
DESPITE LOWER MILK FUTURES, milk income over feed costs is projected to be the best since 2014, fueled in large part by lower feed costs. Both corn and soybeans prices have retreated to prepandemic lows.
AFTER BEING HPAI FREE FOR MONTHS, over 90 California dairy herds had confirmed cases by October 10. The “very steep initial increase” is due to the federal bulk tank testing requirements, said USDA’s Eric Deeble.
USDA RECEIVED 127 COMMENTS ON ITS FMMO Recommended Decision. The agency will release its final decision on Federal Milk Marketing Order modernization on November 12 and a dairy producer referendum would take place in late December or early January.
DAIRY COW CULLING CONTINUES TO LAG. Beginning in January, farmers sent 329,000 fewer head to slaughter when compared to the first nine months of 2023. Dating back to the final week of August in 2023, culling has been down 57 straight weeks, with 469,400 fewer head sent to slaughter in response to the lowest heifer inventories in 20 years.
