October 30

10/30 - In Sept, milk production was down 0.2% and below year-ago levels for the 4th straight month. In Oct’s WASDE, the USDA projected milk production to increase by a slim 0.5% in 2023. Class III milk futures, which averaged $13.87/cwt in July, have rebounded to $16.85 (10/27). Cream supplies have been ever tighter, with hot weather boosting ice cream demand this past summer and consumers considering higher-fat dairy products “healthy” these days. Butter in cold storage in Sept was down 5.6% from Aug. CME butter prices hit a record high of $3.5025/lb on 10/6 and remain elevated at $3.1925 (10/27). This year’s market is a repeat of 2022 when spot shortages pushed prices to a high of $3.26, also on Oct 6 (2022). While butter prices look to continue falling seasonally, in Oct’s WASDE the USDA again raised its butter price forecasts - from $2.54/lb to $2.66 for 2023; and from $2.55 to $2.6550 for 2024.