Dairy Market News Weekly Report (DYWWEEKLYREPORT)

DAIRY MARKET NEWS

WEEK OF JANUARY 4 - 8, 2021 VOLUME 88, REPORT 1

DAIRY MARKET NEWS AT A GLANCE

CME GROUP CASH MARKETS (1/8)

BUTTER: Grade AA closed at $1.3800. The weekly average for Grade AA is $1.4095 (-0.0536).

CHEESE: Barrels closed at $1.6525 and 40# blocks at $1.9175. The weekly average for barrels is $1.5965 (+0.0934) and blocks, $1.7790 (+0.1440).

NONFAT DRY MILK: Grade A closed at $1.1900. The weekly average for Grade A is $1.1795 (+0.0395).

DRY WHEY: Extra grade dry whey closed at $0.5000. The weekly average for dry whey is

$0.4860 (+0.0197).

CHEESE HIGHLIGHTS: Cheese markets received a bullish jolt early in the week, with the announcement of the governmental food box program continuation. Cheese producers are busy. With the hefty amount of discounted spot milk available, a number of cheesemakers reported taking on extra milk and adding days to their workweeks. Spot milk prices ranged from $8.50 to $4 under Class. Cheese inventories are mixed from plant to plant. Demand notes were mixed, as they have been since the onset of COVID-19. Food service sales struggle, but both retail and pizza cheese makers relay customers remain active.

BUTTER HIGHLIGHTS: For the start to the new year, butter makers are receiving strong cream supplies for active churning schedules. Cream supplies are aplenty, and churning has resumed apace following the holidays. Butter stocks are heavy, especially for bulk butter. Several operations are starting new cream contracts this week. On Tuesday, butter markets, among others, got a boost of hope after news of the continuation of governmental food box programs was announced. Retailers are still restocking shelves, but orders are coming in sporadically. Food service demand is weak.

FLUID MILK: Milk production is steady to higher in much of the country, keeping butter and cheese plants supplies. In fact, discount milk and spot milk are available in western and midwestern markets even with increasing bottling demand to supply schools. discounted

loads of milk are a regular occurrence in Idaho. Some Idaho handlers are selling milk loads at $4.50 under Class IV. Midwest spot milk prices remain near holiday discounted levels. There is plenty of milk and cream in all regions. This is keeping churning and cheese making production going. Some condensed skim is also going to dryers. Cream multiples for all Classes are 1.05 to 1.18 in the East, 1.00 to 1.20 in the Midwest, and .90 to 1.18 in the West.

DRY PRODUCTS: Prices are mostly higher across all NDM price series. Markets are described as firming or bullish. Ample condensed skim supplies are keeping drying plants busy. Markets are described as firming or bullish. Dry buttermilk powder prices are steady to higher in the Central/East and higher on the bottom of the range and on the mostly series in the West. Ice cream manufacturing is higher than expected in the country. Prices for national dry whole milk are mixed with light to moderate trading activity. The price range for Central dry whey moved higher but Northeast increases were at the bottom of the range. Western price ranges narrowed. Demand is strong and production is increasing in the East and Central area. Whey is harder to find in the West. Whey protein concentrate 34% prices are lower at the bottom of the price range but higher at the top of the range and both ends of the mostly price series. Lactose prices are mixed while supplies are available for most buyer needs. Some contacts think the lactose market is stabilizing. The low end of the price range for acid and rennet casein strengthened.

CONTINUED ON PAGE 1A

TABLE OF CONTENTS

Product Highlights/CME/DMN at a Glance	1	Dry Whey/WPC 34%/Lactose/Casein	6	Dairy Graphs	G1
Weekly CME Cash Trading/Butter Markets	2	U.S. Dairy Cow Slaughter/Class Milk Prices/NDPSR/Futures	7	National Retail Report - Dairy
Cheese Markets	3	International Dairy Market News	8	Dairy Market News Contacts
Fluid Milk and Cream	4	DMN December Domestic/International Average Prices	9
Nonfat Dry Milk/Dry Buttermilk/Dry Whole Milk	5	November Dairy Products Highlights	12

				DAIRY MARKET NEWS PRICE SUMMARY FOR JANUARY 4 - 8, 2021
				PRICES ($/LB) & CHANGES FROM PREVIOUS PUBLISHED PRICES
Commodity	Range	Mostly	Commodity	Range	Mostly	Commodity	Range	Mostly
NDM					BUTTERMILK					LACTOSE
Central Low/Med. Heat	1.1300	1.2000	1.1400	1.1650	Central/East	1.0000	1.1000			Central/West	0.3100	0.5500	0.3500	0.4600
Change	0.0400	0.0450	0.0300	0.0250	Change	N.C.	0.0600			Change	0.0100	-0.0500	N.C.	-0.0300
Central High Heat	1.2000	1.3000			West	1.0100	1.0500	1.0300	1.0400	WPC 34%
Change	0.0300	N.C.			Change	0.0100	N.C.	0.0150	0.0150	Central/West	0.8300	1.1025	0.9100	0.9700
West Low/Med. Heat	1.1000	1.2175	1.1300	1.1600	WHEY					Change -0.0600 0.0050 0.0100	0.0150
Change	N.C.	0.0575	0.0200	0.0200	Central	0.4050	0.5000	0.4400	0.4625	CASEIN
West High Heat	1.2100	1.3450			Change	0.0050	0.0150	0.0200	0.0125	Rennet	3.4700	3.4975
Change	0.0100	0.0200			West	0.4100	0.5200	0.4500	0.4700	Change	0.0075	N.C.
DRY WHOLE MILK					Change	0.0025	-0.0300	0.0250	-0.0200	Acid	3.5000	3.7000
National	1.4500	1.6000			Northeast	0.4100	0.4700			Change	0.0450	N.C.
Change	-0.0225	0.0500			Change	0.0100	N.C.			ANIMAL FEED WHEY
										Central	0.3400	0.3800
										Change	0.0200	N.C.

			DAIRY MARKET NEWS PRICE SUMMARY FOR DECEMBER 21, 2020 - JANUARY 8, 2021
			PRICES ($/MT) & CHANGES FROM PREVIOUS PUBLISHED PRICES
Commodity	Range	Commodity	Range	Commodity	Range
SMP			WHOLE MILK POWDER			BUTTER
W. Europe	2675	2825	W. Europe	3400	3475	W. Europe	4000	4225
Change	150	25	Change	100	25	Change	75	75
Oceania	3050	3125	Oceania	3275	3325	Oceania	4450	4525
Change	125	175	Change	75	100	Change	325	275
S. America	3000	3125	S. America	3275	3375	BUTTEROIL
Change	125	150	Change	100	150	W. Europe	4900	5025
WHEY						Change	150	100
W. Europe	1000	1050				CHEDDAR CHEESE
Change	100	N.C.				Oceania	4050	4100
						Change	175	175

WEEK OF JANUARY 4 - 8, 2021	DAIRY MARKET NEWS	VOLUME 88, REPORT 1
	DAIRY MARKET NEWS AT A GLANCE

CONTINUED FROM PAGE 1

INTERNATIONAL DAIRY MARKET NEWS: WESTERN EUROPE OVERVIEW: Early 2021 milk production is increasing seasonally in the primary Western European producing countries such as Germany, France, Netherlands and Italy. Cheesemakers in particular are vying to obtain as much milk as they can from increased volumes.

EASTERN EUROPE OVERVIEW: Belarus exports of primary dairy products January - October 2020 were butter, +8.9 percent; SMP, +1.7 percent; WMP, +18.4 percent; and cheese, +12.2 percent, according to CLAL data made available to USDA.

OCEANIA OVERVIEW: Australia: July - November 2020 milk production in Australia, October being the fifth month of the new season, increased 1.3 percent from July - November 2019, according to Dairy Australia. New Zealand: November 2020 New Zealand milksolids reported by DCANZ and CLAL, 242,303 million kg, are down 2.74 percent from November 2019 milksolids, 249,135 million kg. November 2020 milk production, 2,928 million MT, is down 2.50 percent from November 2019, 3,003 million MT.

SOUTH AMERICA OVERVIEW: Along with the new year, rain showers have returned to the main farm areas and dairy basins of South America, after several weeks of dryness. In general, these humid conditions have sustained the development of soybeans and corn throughout the Mercosur region. Meanwhile, some dairy farm operators have had to deal with sanitary measures due to muddy conditions. However, high summer temperatures continue to be the main factor in slowing down cow's milk production. No major transportation problems have been reported due to the rains.

NATIONAL RETAIL REPORT (DMN): The first week of the year provided an expected increase in retail dairy advertisements after the holiday weeks. Total conventional ad numbers increased 29 percent, while organic dairy advertisements jumped 115 percent in total. Conventional 8-ounceshred cheese was the most advertised dairy item this week, while half gallon milk was the most advertised organic dairy item.

NOVEMBER DAIRY PRODUCTS HIGHLIGHTS (NASS): Butter production was 168 million pounds, 4.0 percent above November 2019, and 1.8 percent above October 2020. American type cheese production totaled 449 million pounds, 3.9 percent above November 2019, but 2.8 percent below October 2020. Total cheese output (excluding cottage cheese) was 1.10 billion pounds, 0.6 percent above November 2019, but 2.7 percent below October 2020. Nonfat dry milk production, for human food, totaled 152 million pounds, 9.2 percent above November 2019, and 9.3 percent above October 2020. Dry whey production, for human food, was 70.0 million pounds, 5.9 percent below November 2019, and 5.7 percent below October 2020. Ice cream, regular hard production, totaled 53.0 million gallons, 13.0 percent above November 2019, but 14.1 percent below October 2020.

-1A-

DAIRY MARKET NEWS, JANUARY 4 - 8, 2021	-2-				VOLUME 88, REPORT 1
COMMODITY	MONDAY	TUESDAY	WEDNESDAY	THURSDAY	FRIDAY	::	WEEKLY	::	WEEKLY
	JAN 4	JAN 5	JAN 6	JAN 7	JAN 8		CHANGE		AVERAGE
CHEESE
BARRELS	$1.4825	$1.5550	$1.6400	$1.6525	$1.6525	::	(+0.1100)	::	$1.5965
	(-0.0600)	(+0.0725)	(+0.0850)	(+0.0125)	(N.C.)	::	::	(+0.0934)
40 POUND BLOCKS	$1.6175	$1.6775	$1.7850	$1.8975	$1.9175	::	(+0.2675)	::	$1.7790
	(-0.0325)	(+0.0600)	(+0.1075)	(+0.1125)	(+0.0200)	::	::	(+0.1440)
NONFAT DRY MILK
GRADE A	$1.1475	$1.1750	$1.1900	$1.1950	$1.1900	::	(+0.0475)	::	$1.1795
	(+0.0050)	(+0.0275)	(+0.0150)	(+0.0050)	(-0.0050)	::	::	(+0.0395)
BUTTER
GRADE AA	$1.3950	$1.4475	$1.4350	$1.3900	$1.3800	::	(-0.0400)	::	$1.4095
	(-0.0250)	(+0.0525)	(-0.0125)	(-0.0450)	(-0.0100)	::	::	(-0.0536)
DRY WHEY
EXTRA GRADE	$0.4650	$0.4800	$0.4850	$0.5000	$0.5000	::	(+0.0375)	::	$0.4860
	(+0.0025)	(+0.0150)	(+0.0050)	(+0.0150)	(N.C.)	::	::	(+0.0197)

Prices shown are in U.S. dollars per lb. in carlot quantities. Carlot unit weights: CHEESE, 40,000-44,000 lbs.; NONFAT DRY MILK, 41,000-45,000 lbs.; BUTTER, 40,000-43,000 lbs.;DRY WHEY, 41,000-45,000 lbs. Weekly Change is the sum of Daily Price Changes. Weekly Average is the simple average of the Daily Cash Close prices for the calendar week. Weekly Average Change is the difference between current and previous Weekly Average. Computed by Dairy Market News for informational purposes. This data is available on the Internet at

NOTICE: Five days of trading information can be found at www.cmegroup.com/trading/agricultural/spot-call-data.html

BUTTER MARKETS

NORTHEAST

Eastern milk supplies are abundant in the region. For the start to the new year, butter makers are receiving strong cream supplies for active churning schedules. Some manufacturers' print stocks are outweighed by current bulk supplies. Cream supplies are aplenty for spot/contract needs. Some butter manufacturers are not purchasing spot cream supplies at this time. Several operations are starting new cream contracts this week. Retail butter orders are steady to flat. Foodservice orders are slow at this time. On various spot markets, buyers' butter demands are mixed. The East wholesale bulk butter price is 2-7 cents over the market of the CME Group, with various time frames and averages used. Butter markets display an unsettled tone.

Prices for: Eastern U.S., All First Sales, F.O.B., Grade AA, Conventional, and Edible Butter

Bulk Basis Pricing - 80% Butterfat $/LB:

+0.0200 - +0.0700

Secondary Sourced Information:

The CME Group December 2020 monthly average price for Graded AA butter, $1.4806, increased from the November average of $1.3941.

CENTRAL

Butter markets, among others, got a boost on Tuesday after news of the continuation of governmental food box programs was announced. In the region, churning has resumed apace following the holidays. There is a lot of available cream on the market. Butter makers say they are turning down spot prices around flat market. Additionally, they are finding Western cream offers at values. Some plant managers say cream trucks are lined up, in some cases, outside their plants. Butter plant managers relay food service sales are well below last year's figures, but they are waiting for customers to settle in following the holiday season.

Prices for: Central U.S., All First Sales, F.O.B., Grade AA, Conventional,

and Edible Butter	0.0000 - +0.0500
Bulk Basis Pricing - 80% Butterfat $/LB:

Secondary Sourced Information:

The CME Group December monthly average price for Grade AA butter was $1.4806, compared to $1.3941 in November.

WEST

Western butter sales activity has quieted following the winter holidays. Retailers are still restocking shelves, but orders are coming in sporadically. Food service demand is weak. Butter production is active. Manufacturers say they have ample supplies of cream for the churns. Cream multiples cover a wide range below and above flat market, depending on volume and location. Butter stocks are heavy, especially for bulk butter.

Prices for: Western U.S., All First Sales, F.O.B., Grade AA, Conventional,

and Edible Butter	0.0000 - +0.0750
Bulk Basis Pricing - 80% Butterfat $/LB:

Secondary Sourced Information:

CME GROUP MONTHLY AVERAGES

The CME Group December 2020 monthly average price for Grade AA butter, $1.4806, is up from the November monthly average price of $1.3941, but down from the monthly average of a year ago, $1.9736.

The average CME butter price for the year of 2020 was $1.5782.

CME CLOSING PRICE

The Grade AA butter price at the CME Group on Wednesday closed at $1.4350, compared to the weekly average price of $1.4631 from last week.

DAIRY MARKET NEWS, JANUARY 4 - 8, 2021	-3-	VOLUME 88, REPORT 1
	CHEESE MARKETS
NORTHEAST		WHOLESALE SELLING PRICES: DELIVERED
	DOLLARS PER POUND(MIXED LOTS (1000-5000 POUNDS))

Northeastern cheese makers are running strong production schedules. Milk volumes are seasonally abundant in the region. Some Class III plants are operating near or at capacity. Manufacturers' cheese inventories are slightly increasing, although there are no reports of supplies being burdensome. Spot market activities are somewhat mixed. Foodservice sales are slower. Mozzarella and provolone cheese orders from pizzerias/restaurants are steady to decreased. Retail sales are reportedly steady for the near term. There are reports the Farmers to Families Food Box program has plans to continue and provide dairy products in food boxes. Cheese markets are unsettled. The DMN Northeast December 2020 monthly average price for cheddar blocks is $2.2286, compared to $2.8859 one month ago. Processed 5# sliced average price is $1.7819, compared to $2.4082 one month ago.

WHOLESALE SELLING PRICES: DELIVERED

DOLLARS PER POUND(MIXED LOTS (1000-5000 POUNDS))

Cheddar 40 pound Block	2.0875-2.3750
Muenster	2.0750-2.4250
Process American 5 pound Sliced	1.6025-2.0825
Swiss 10-14 pound Cuts	3.8725-4.1950

MIDWEST

Cheese producers are very busy in the region. Some plant managers report staffing shortages. Particularly plants in more rural areas are having trouble thoroughly maintaining full work crews. Interestingly, the shortages are not solely due to COVID-19. Contacts suggest running six and seven day workweeks over the holidays has been a hur- dle. There are few options for producers with the surplus of milk. Spot milk prices are at or near holiday levels. Some good news came in regarding demand. Although some cheesemakers reported softening demand from Eastern customers due to COVID-19 related re- strictions, some other producers say interest levels have shifted high- er. Curd makers reported being booked through most of Q1. Cheese market tones are positive after some news regarding continuation of food box programs surfaced early this week.

WISCONSIN WHOLESALE SELLING PRICES: DELIVERED DOLLARS PER POUND(MIXED LOTS (1000-5000 POUNDS))

Blue 5 pounds	2.2700-3.3400
Brick 5 pounds	2.0025-2.4275
Cheddar 40 pound Block	1.7250-2.1250
Monterey Jack 10 pounds	1.9775-2.1825
Mozzarella 5-6 pounds	1.8025-2.7475
Muenster 5 pounds	2.0025-2.4275
Process American 5 pound Loaf	1.5875-1.9475
Swiss 6-9 pound Cuts	3.3875-3.5050

Cheddar 10 pound Cuts	1.9625-2.1625
Cheddar 40 pound Block	1.7150-2.2050
Monterey Jack 10 pounds	1.9500-2.2250
Process American 5 pound Loaf	1.6050-1.8600
Swiss 6-9 pound Cuts	3.6800-4.1100

FOREIGN TYPE

Sources in Germany report that during the opening days of 2021 cheese markets are stable. New ordering is slow to resume. Contracted orders are being shipped. A few spot market sales have been made. Prices in Western Europe are not moving very much. Much Q1 2021 ordering is believed to have been finalized but some late buyers will be working to finalize deals soon. This all is as was expected. Cheese manufacturers continue to shift their focus to making cheese for retail sale, away from food service.

WHOLESALE SELLING PRICES: FOB DISTRIBUTORS DOCK DOLLARS PER POUND (1000 - 5000 POUNDS, MIXED LOTS)

VARIETY	:	NEW YORK	:	DOMESTIC
:	IMPORTED
Blue	:	2.6400-5.2300	:	2.0950-3.5825*
:	:
Gorgonzola	:	3.6900-5.7400	:	2.6025-3.3200*
Parmesan	:	-0-	:	3.4825-5.5725*
Romano	:	-0-	:	3.2850-5.4400*
Sardo Romano (Argentina)	:	2.8500-4.7800	:	-0-
Reggianito (Argentina)	:	3.2900-4.7800	:	-0-
Jarlsberg	:	2.9500-6.4500	:	-0-
Swiss	:	-0-	:	3.9075-4.2325*
Swiss (Finland)	:	2.6700-2.9300	:	-0-

* = Price change.

COLD STORAGE

WEEKLY COLD STORAGE HOLDINGS - SELECTED STORAGE CENTERS IN THOUSAND POUNDS - INCLUDING GOVERNMENT STOCKS

01/04/2021	:	BUTTER	:	CHEESE
:	46084	78630
01/01/2021	:	45415	:	77986
CHANGE	:	669	:	644
% CHANGE	:	1	:	1

WEST

Manufacturers say sales for western cheese going into pizza has been strong throughout the fall and winter. Industry contacts think this will continue for the near term. In addition, retail orders are firm as grocers restock the shelves following the winter holidays. While food service demand is still sluggish, some contacts think the announcement earlier this week pledging more money for the farmers to families food box program will help clear cheese stocks. Inventories are balanced to heavy. Following the program announcement, block and barrel pries moved higher within some cash markets. Some contacts think market speculators are making purchases and putting the cheese into storage within a cash and carry strategy. Manufacturers say production is active with plenty of milk for the cheese vats.