DAIRY TRENDS

Farmer's Report

Dairy Trends - October 11, 2019

All dairy pricing trends are based on USDA and CME data as of Oct. 9, 2019.

BUTTER

Analysts report that pricing remains under pressure, due to increased availability with cold storage inventories and limited demand. Butter production is steady across the country, with churns able to buy as much cream as they need. Analysts expect to see some additional slowdowns in production, with producers likely trying to manage their inventories, but the price theme remains steady to lower for the time being.

CHEESE

Milk availability continues to be limited, but enough supply is finding its way into processors, as cheese production has been steadily active in the U.S., according to reports. Analysts report cheese supplies are tighter than in prior years, and have been in high demand, helping command the elevated prices for product. Given this scenario, report that the higher values should help increase production rates as milk supplies become more available. Seasonally, analysts still expect some weakness heading farther into Q4; however, CME markets are showing further price gains again this week, especially on barrel cheese.

SHELL EGGS

Analysts expect current shell egg prices should continue to incentivize some additional promotional activity and stockpiling, which is starting to materialize with retail and foodservice. Seasonally, the current market is well below the average prices for this time of year, as we head into the stronger demand period ahead of the holiday/baking seasons. Inventories tightened up some this past week, but remain sufficient, given current inquiries. As demand improves into the fall/winter, analysts expect prices should remain well-supported at these low levels.

MILK & CREAM

Class I and Class III milk prices are now at their highest level in a few years, as analysts point to school demand ramping up and lower milk production. Vendors are indicating that UHT heavy cream prices could decline slightly as we get further into October.

The data contained in the Farmer’s Report is provided for informational purposes only, is not tailored to your specific purchasing needs, and is not intended as a substitute for any other publicly-available market data or information. The Farmer’s Report is compiled from the last-received market data provided by the United States Department of Agriculture (USDA) and/or other market sources, and is subject to change without notice. Nothing herein is the opinion of US Foods®. US Foods neither assumes any legal liability nor makes any warranty or guaranty, either express or implied, regarding the completeness, accuracy or usefulness of this information.