September cheese and butter stocks were well above those a year ago, according to the Agriculture Department’s latest Cold Storage report.

Sept. 30 butter holdings totaled 275.4 million pounds, down 16.3 million pounds or 5.6 percent from the August inventory, which was revised up 2.65 million pounds. Stocks were up a bearish 8.1 million pounds, or 3.0 percent, from September 2022.

American type cheese stocks slipped to 850.5 million pounds, down 2.4 million pounds or 0.3 percent from August’s level, which was revised up 3.5 million pounds, and were up 7.4 million pounds or 0.9 percent from a year ago.

The “other” cheese category holdings dropped to 599.4 million pounds, down 20.5 million pounds or 3.3 percent from the August level which was revised up 2.2 million pounds. Holdings were 4.2 million pounds or 0.7 percent below a year ago.

The total cheese inventory fell to 1.472 billion pounds, down 23.1 million pounds or 1.5 percent from the August total which was revised 6.0 million pounds higher, but total cheese was up 2.5 million pounds or 0.2 percent from that of a year ago.

StoneX suggests, “If cheese stocks stay at year-ago levels they would suggest a CME block price around $1.90 for November, although we expect lower prices on the world market will keep U.S. prices in the $1.70s.”

CME dairy prices saw weakness across the board as Halloween approached. The 40-pound Cheddar blocks closed Friday at $1.73 per pound, down 5.75 cents on the week, after gaining almost 9 cents the week before, and were 23 cents below a year ago.

The 500-pound Cheddar barrels crept to $1.7350 per pound Monday, highest since Sept. 15, but finished Friday at $1.6825, 2.75 cents lower on the week, 24.25 cents below a year ago when they plunged 16.50 cents, and are 4.75 cents below the blocks. Sales totaled eight loads of block on the week and nine barrel.

Midwestern cheesemakers tell Dairy Market News that milk availability has not edged much lower in recent weeks. Cheesemakers are already making plans for Thanksgiving week when prices are expected to fall. Spot mid-week milk prices were at 25 cents to $1.75 over Class III, compared to $1-under to 50 cents over Class a year ago. Cheesemakers are in the process of locking in 2024 milk commitments. Current cheese demand remains mixed from one plant to the next. Inventories ranged from balanced to tighter in the region, says DMN, and barrel makers say their spot availability is short.

Retail and food service cheese demand is mostly steady in the West. Inventories are noted as comfortable. Export demand is moderate. Recent sentiment that current prices will attract more international interest has dissipated, according to DMN. Class III milk demand is strong to steady. However, extra spot loads are somewhat limited. Overall, cheese makers relay tightness in extra Class III milk and that is keeping production schedules mostly steady. A few American type manufacturers are prioritizing Cheddar, according to DMN.

Butter continued to fall from its Oct. 6 record high but remained above a year ago. The Friday closing at $3.1925 per pound was down 16.75 cents on the week, lowest since Sept. 26, but 5.25 cents above a year ago when it dropped 6 cents, only to plunge 36.75 cents the following week. There were 11 sales reported on the week at the CME.

Cream availability is loosening and butter plants in the Midwest say they are able to source cream from both local and Western suppliers. As cream multiples move into the low 1.20s more regularly, churning has, in at least some plants, more than doubled since the beginning of the month. Butter demand is mixed, says DMN. Salted butter in the region is still somewhat snug.

Western handlers noted improved fat component levels in milk but cream is tight. A few butter manufacturers are limiting purchases of extra cream given current prices. Strong to steady retail demand is being reported. Others say demand only recently improved from buyers limiting purchasing to immediate needs as butter prices decreased. Food service demand is strong to steady. Inventories are in good shape for the anticipated upcoming holiday demand. Previous steady demand from Canadian purchasers was termed as lighter for the start of fourth quarter. Export demand is moderate elsewhere says DMN.

Grade A nonfat dry milk fell to a Friday finish at $1.1975 per pound, 3.50 cents lower, and 23.25 cents below a year ago, with 9 sales posted on the week.

StoneX stated, “The theme in nonfat this week has been weaker as global prices feel pressure from a weaker GDT Pulse.”

Dry whey, after jumping 6 cents the previous week, headed back down Monday and Tuesday, then rallied to close Friday at 40 cents per pound, up a half-cent on the week, highest since April 5, but still and 3 cents below a year ago. The week saw 19 loads exchange hands, down from 30 the week before and 70 the week before that.

This week’s GDT Pulse was the second one to include Fonterra skim milk powder as well as whole milk powder. Sales totaled 4.9 million pounds out of the 4.96 million offered.

HighGround Dairy reports that instant WMP sales were down 388,000 pounds from the Oct. 10 Pulse but saw 315,258 pounds more regular WMP. An additional 33,000 pounds of SMP was sold over the maximum offer quantity and all three specs came in below last week’s GDT Event C2 settlements.

In other global news, Cooperatives Working Together member cooperatives accepted 17 offers of export assistance this week that helped them capture sales contracts for 2.2 million pounds of American-type cheese and 79,000 pounds of cream cheese. The product is going to customers in Asia, Central America, the Caribbean and Middle East-North Africa and Oceania through January 2024.

CWT’s 2023 sales now total 36.8 million pounds of American-type cheeses, 908,000 pounds of butter, 26,000 pounds of anhydrous milkfat, 38.8 million pounds of whole milk powder and 7.3 million pounds of cream cheese. The products are going to 25 countries and are the equivalent of 719.7 million pounds of milk on a milkfat basis.

The National Milk Producers Federation Oct. 27 market update stated, “Reduced milk production and strong domestic consumption are showing up in dairy product production and inventory levels, offsetting weaker exports and setting the stage for the milk price rebound long foreseen in dairy futures markets and beginning to show up in dairy statistics.

“U.S. consumers continued their strong uptake of dairy products during the summer, as domestic use of milk in all products rose by 3.3 percent during the June through August period. Weakness in world dairy demand, meanwhile, has dropped the share of its milk solids production the United States exported this year by about a full percentage point below the record levels of the previous two years. Still, this year’s rate has remained firmly in the mid-16 percent range, well above its stagnant 15 percent average during 2013-2020.”,

Class III futures don’t portend a lot of profitability ahead for farmers. Thursday’s settlements had the October contract at $16.84 per cwt; November, $17.55; December, $17.42; January $17.72; February, $18.08; and March was at $18.34.