Monthly Forecast – October 2023

Forecast updates


  • While the data remains largely positive for cheese demand, sellers continue to place sell-side pressure on the market.
    • As a result, Ceres reduced the Q4 2023 and Q1 2024 forecast and widened the block-barrel spread.
    • There are some concerns about foodservice demand that could slow needs at the end of the year. But the jury is still out on consumer spending as reports indicate despite inflation, higher interest rates, more debt, and falling savings rates, consumers continue to spend at a breakneck pace. That could bode well for the holiday demand season this year. Additionally, President Biden forgave another round of student loans this week.
    • Although there is reason to be optimistic about demand, and given it is the USDA bid season for the 23/24 fiscal year, sellers continue to offer more cheese at the CME.
    • Even more compelling August US cheese production slowed, falling 0.2% behind last year’s pace.
    • Despite all of that news – the spot market will impact fall prices and for now that seems to be keeping prices near current levels.


  • Butter prices continue to set records in early October. Production in August slowed, down 2.1% compared to last year, and stocks were up nearly 4% – the lowest YoY gap this year.
  • Bulk butter remains tight, and brokers are aware of that fact. As a result, there is little fear that bidding the markets higher will result in ownership – at least for a few more weeks.
  • This year, +$3/lb butter could last a few weeks, but it will take a toll on demand and could cause the cream to start moving back to churns in late October – early November as it did last year.
  • Ceres increased the Q4 2023/Q1 2023 forecast – but the expectation is that 2024 prices could be higher than this year through most of the year as more butterfat has been converted to American-style cheese.


  • No significant change in expectations this month and as a result very few changes to the forecast.
    • US NDM production fell 15.2% behind last year’s pace in August, which has been supported by anecdotal reports suggesting new product is hard to come by.
    • SMP production was also lower, indicating less milk headed to driers.
    • NDM stocks were nearly 15% less than last year in August – but the days of production on hand was 73 days – suggesting that some of this product has been on hand for a bit.


  • No significant changes to expectations. For now, prices are rangebound. Presently, the Ceres EU-27 whey price is significantly lower than EEX futures – that may be something to monitor as that could support 2024 prices.

The forecast result was a disparity between Class III and IV milk, with Class IV milk holding a premium. Given Class III milk’s impact on farm incomes, that could be problematic. Further, history suggests that the gap between those prices doesn’t last as long as forecasts tend to project. That would suggest that cheese prices could be prone to upward movement in 2024.