November 8

11/8 - At Oct’s Market Vision Conference, Eric Meyer from HighGround said a declining milk cow herd is curbing milk output. Dairy farmers culled 70,000 milk cows in Aug/Sept and Sept milk output was up just 0.2% from a year ago. Butter prices jumped $.12 over the past month to close at $1.9335/lb on 11/5. Sept butter output is down 4.9% from a year ago, but supplies are still adequate for Q4 holiday demand. Meyer says butter will average $1.70 in 2021 and $1.80 in 2022. Conversely, block cheese has weakened to $1.5850/lb. Meyer says prices should recover seasonally in Nov. Nonfat dry milk prices are at 7-year highs, driven by weak global milk output and strong demand. Chinese imports are up 40% YTD compared to a year ago. Strong NFDM prices have been historically correlated with rising cheese prices. Meyer says block looks to average $1.71 in 2021 and $1.78 in 2022.