Weekly forecast update, Nov. 26, 2021

Forecast updates

  • Very few changes to the forecast – slight alteration to NOV21 prices due to previous week’s spot markets and NDPSR updates.

Fluid Milk Market

Bottling demand remained elevated ahead of the holiday, with more Milk expected to head to manufacturing plants over the extended weekend. That could allow for a bit more commodity product output; however, bottling Milk may pick up early next week and continue to the final week of the year. Still, peak demand has passed with a final push to the last holidays of the year. After that, milk output should increase, and demand should subside, sending more products to warehouses or overseas’ markets.

In overseas markets, New Zealand released its October milk production at 6.9 billion pounds, 3.3% less than year-ago levels. With Milk past its peak and deficient to last year, lower milk production from New Zealand could support global prices. In turn, that could provide ample export opportunities for US dairy processors should demand remain near current levels.

Cheese Market

Ahead of the Thanksgiving holiday, demand was reportedly strong and similar, and in some cases, better than last year. CME spot markets were quiet, as were futures in the abbreviated holiday trade. There was a single barrel traded this week and no blocks. CME barrels averaged $1.52/lb – 4.05¢ more than the previous week. Blocks averaged $1.8575/lb, 13.4¢ higher than the prior week. That left the block-barrel spread at 33.75¢. While smaller than recent weeks – the block-barrel spread had been volatile in November with the month starting with barrels premium to blocks and ending with blocks higher than barrels.

US cheese holdings totaled 1.45 billion pounds on October 31 – 0.5% less than September, but 8.2% more than a year ago. Most of the build came from American cheese stocks totaling 845.6 million pounds and 11.8% more than a year ago. The month-to-month stocks built for only the second time over the past six years – likely confirming the news of slower retail and foodservice sales in October. Not a large build, but a build all the same. The results suggest that cheese is available to markets and that prices could be prone to modest declines by the end of the year.

Butter Market

CME butter markets started the week lower but remained unchanged for the duration. A single offer on Monday dropped the market below the $2 threshold again. Cream demand remains robust, and expectations are that churning over the holiday weekend could be less than the last season. That could result in the year-end prices being significantly higher than the previous year. CME butter average $1.99/lb – 0.1¢ less than the last week. Cream multipliers eased but remained seasonally high this week.

US butter stockpiles continue to dwindle, headed into the end of the year. As of October 31, US butter holdings totaled 281.5 million pounds – 13.2% less than September and 6.1% lower than year-ago levels. The Sept.-Oct. drawdown was consistent with the five-year average for the period, but it is only the second time that year-over-year stocks declined over the past six years. Despite the decline, stocks at the end of October are still nearly 30 million pounds above the five-year average.


CME spot NDM prices averaged $1.5658/lb this week, 2.48¢ more than the previous week with six loads changing hands. Prices picked up as overseas prices continued to trend higher, and New Zealand announced lower milk production (see Milk). While markets were quiet this week – slowing milk production from New Zealand and consistent demand from China and elsewhere continue to provide price support.

China imported 72 million pounds of WMP in October – 12.1% less than September on a daily average basis and 10.5% less than last year. China imported nearly 72 million pounds of SMP in October – 4% more than September and 28% higher than last year. In total – that is more milk powder than one year ago. While China’s SMP imports were higher from New Zealand – they were also significantly higher from the United States, Sweden, Ireland, and France. That more than offset modest declines from other European nations and Belarus. China imported more WMP from Uruguay, the United States, and Australia – but that was far less than the reduced volumes from New Zealand. The net impact of more SMP and less WMP was still more powder than a year ago.

Whey & Lactose Products

CME whey markets and Dairy Market News Central whey prices were steady while western DMN whey prices increased last week. The CME whey price averaged 70¢/lb, 0.8¢ higher than the previous year. Wednesday was the sixth consecutive trading session at that price level. Although the DMN mostly were higher, the range did show some signs of weakness this week – not reflective of most of the volume, more that some sales were at lower prices.

China imported 110.1 million pounds of whey in October – 14.1% less than September on a daily average basis and 9.6% less than a year ago. Imports from the United States were down modestly. Most of the larger declines came from Poland and Belarus. Slowing demand from China could impact whey if the declines become more significant.