Dairy Market News Weekly Report (DYWWEEKLYREPORT)

DAIRY MARKET NEWS

WEEK OF JANUARY 25 - 29, 2021 VOLUME 88, REPORT 4

DAIRY MARKET NEWS AT A GLANCE

CME GROUP CASH MARKETS (1/29)

BUTTER: Grade AA closed at $1.2450. The weekly average for Grade AA is $1.2865 (-0.1298).

CHEESE: Barrels closed at $1.3900 and 40# blocks at $1.5750. The weekly average for barrels is $1.3945 (-0.0511) and blocks, $1.5890 (-0.1091).

NONFAT DRY MILK: Grade A closed at $1.1725. The weekly average for Grade A is $1.1620 (-0.0305).

DRY WHEY: Extra grade dry whey closed at $0.5350. The weekly average for dry whey is $0.5225 (-0.0150).

CHEESE HIGHLIGHTS: Cheese production continues apace nationwide. There is notably more milk headed into Class III in the country than in previous years during this week. Spot milk prices ranged from $8.50 to $4 under Class III in the Midwest. Spot prices during week four over the past few years were typically nearer Class, and in some cases slightly over Class. The December NASS Cold Storage report, released Monday, noted overall increases in cheese holdings throughout the country. Right now, there are myriad questions regarding the near term market tones of commodity cheese: food box program expectations, growing milk availability with underwhelming Class I pulls, and food service limitations/restrictions to name a few.

BUTTER HIGHLIGHTS: Cream remains plentiful and butter churns continue to run on heavy schedules at most balancing plants across the country. Due to the abundant cream supplies, some butter makers are opting to sale some cream loads in the spot market. Bulk butter interest has erupted as buyers look for multiple loads. Food service activity is up as the box program drives purchases. Retail sales are steady to strong, depending on the region. In general, butter inventories continue building into cold storage. The market undertone for butter is unsettled at this point.

FLUID MILK: As winter weather made an appearance in at least parts of the three major regions this week, milk production, and availability, are expected to remain intact, as most regions continue to report steady to growing yields. Class I sales are generally steady week to week. Midwestern Class I contacts reported slipping demand, as holiday pipelines have begun to refill. Cheesemakers reported spot milk prices from $8.50 to $4 under Class. Discounts are notably stronger than previous years' figures during week four, but contacts did say offers have quieted down when compared to previous weeks. Cream is available for all uses, as ice cream production is higher than some expectations and helped tick up multiples in the Midwest and Eastern regions, while multiples held steady in the West.

F.O.B. cream multiples are 1.10-1.21 in the East, 1.16-1.22 in the Midwest, and 1.00-1.18 in the West.

DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices experienced some bearish pressure, as prices dropped in all regions. Contacts note months of heavy condensed skim availability, alongside busy production, has pushed NDM availability higher. Buttermilk powder prices were mixed, as the price range contracted in the West, but increased in the East/Central regions. Dry buttermilk production has been the understudy to the star, low/medium heat NDM, therefore markets are not feeling the same pressure currently. Dry whole milk prices were steady, on light spot market trading. Dry whey price ranges contracted in the Central, while holding steady to slightly higher in the West and Northeast. Whey protein concentrate 34% prices moved higher on the bottom of the mostly series, as inventories vary by brand/end usage. Lactose prices are also steady to higher this week, as demand ticks in the upward direction. Rennet casein prices increased, while acid casein prices are higher on the bottom of the range.

ORGANIC DAIRY MARKET NEWS: Federal Milk Market Order 1, in New England, reports the utilization of types of organic milk by pool plants. During December 2020, organic whole milk utilization totaled 13.5 million pounds, up from 13.1 million pounds the previous year. The utilization of organic reduced fat milk in December 2020, 14.7 million pounds, increased from 11.6 million pounds a year earlier. The January 2021 in-storesurveys of selected supermarkets in twenty-nineU.S. cities reveal that the retail prices of organic whole milk, in half gallon containers, range from $3.14 in Houston, TX, to $5.84 in Pittsburg, PA. The U.S. simple average price, $4.10, is up 2 cents from December 2020.

NATIONAL RETAIL REPORT (DMN): There were only slight changes on dairy retail trends, overall, from week 3 to week 4. Total conventional dairy advertisements shifted higher by a single percent, while organic ad numbers moved lower by the same margin. Shredded cheese in 8 ounce packs were the most advertised dairy item on the conventional aisle, slightly edging out conventional ice cream in 48 to 64 ounce containers.

DECEMBER MILK PRODUCTION (NASS): Milk production in the 24 major States during December totaled 18.1 billion pounds, up

1. percent from December 2019. November revised production, at
2. billion pounds, was up 3.5 percent from November 2019. The November revision represented an increase of 56 million pounds or 0.3 percent from last month's preliminary production estimate.

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TABLE OF CONTENTS

Product Highlights/CME/DMN at a Glance	1	Dry Whey/WPC 34%/Lactose/Casein	6	October Mailbox Milk Prices	12
Weekly CME Cash Trading/Butter Markets	2	U.S Dairy Cow Slaughter/Class Milk Prices/NDPSR/Futures	7	January Retail Milk Prices	13
Cheese Markets	3	Organic Dairy Market News	8	Dairy Graphs	G1
Fluid Milk and Cream	4	December Milk Production	9	National Retail Report - Dairy
Nonfat Dry Milk/Dry Buttermilk/Dry Whole Milk	5	December Cold Storage	10	Dairy Market News Contacts
		December Market Summary and Utilization Report	11

				DAIRY MARKET NEWS PRICE SUMMARY FOR JANUARY 25 - 29, 2021
				PRICES ($/LB) & CHANGES FROM PREVIOUS PUBLISHED PRICES
Commodity	Range	Mostly	Commodity	Range	Mostly	Commodity	Range	Mostly
NDM					BUTTERMILK					LACTOSE
Central Low/Med. Heat	1.1000	1.2000	1.1500	1.1800	Central/East	1.0500	1.1200			Central/West	0.3100	0.5500	0.3800	0.4600
Change -0.0500-0.0400	-0.0300	-0.0300	Change	0.0100	0.0100			Change	N.C.	N.C.	0.0300	N.C.
Central High Heat	1.2500	1.3000			West	1.0500	1.1100	1.0600	1.0900	WPC 34%
Change -0.0100-0.0200			Change	0.0100	-0.0200	N.C.	-0.0100	Central/West	0.9100	1.1400	0.9700	1.0150
West Low/Med. Heat	1.1000	1.2075	1.1500	1.1800	WHEY					Change	N.C.	N.C.	0.0200	N.C.
Change -0.0600-0.0200	-0.0250	-0.0200	Central	0.4700	0.5400	0.4800	0.5100	CASEIN
West High Heat	1.2600	1.3250			Change	0.0400	-0.0100	N.C.	0.0100	Rennet	3.5875	3.6525
Change	N.C.	-0.0300			West	0.4550	0.5500	0.4900	0.5100	Change	0.1250	0.1575
DRY WHOLE MILK					Change	0.0150	N.C.	0.0200	0.0050	Acid	3.6425	3.9500
National	1.5500	1.7000			Northeast	0.4700	0.5300			Change	0.1250	N.C.
Change	N.C.	N.C.			Change	N.C.	0.0100			ANIMAL FEED WHEY
										Central	0.3600	0.4100
										Change	N.C.	N.C.

WEEK OF JANUARY 25 - 29, 2021	DAIRY MARKET NEWS	VOLUME 88, REPORT 4
	DAIRY MARKET NEWS AT A GLANCE

-CONTINUED FROM PAGE 1-

Production per cow in the 24 major States averaged 2,027 pounds for December, 40 pounds above December 2019. The number of milk cows on farms in the 24 major States was 8.92 million head, 107,000 head more than December 2019, and 12,000 head more than November 2020. Milk production in the United States during the October - December quarter totaled 55.6 billion pounds, up 3.0 percent from the October - December quarter last year. The average number of milk cows in the United States during the quarter was 9.43 million head, 59,000 head more than the July - September quarter, and 81,000 head more than the same period last year.

DECEMBER COLD STORAGE (NASS): On December 31, U.S. cold storage holdings of butter totaled 273.8 million pounds, up 9 percent from the previous month and up 44 percent from December 2019. Natural American cheese holdings total 801.2 million pounds, 5 percent higher than the previous month and 7 percent more than December 2019. Total natural cheese stocks were 1,397.9 billion pounds, up 4 percent from last month and 6 percent more than December 2019.

DECEMBER MARKET SUMMARY AND UTILIZATION REPORT (FMMO): During December, 11.7 billion pounds of milk were received from Federally pooled producers. This volume of milk is

2.5 percent higher than the December 2019 volume. Regulated handlers pooled 3.8 billion pounds of producer milk as Class I products, up 1.4 percent when compared to the previous year. The all-market average Class utilization percentages were: Class I = 32 percent, Class II = 13 percent, Class III = 22 percent, and Class IV = 33 percent. The weighted average statistical uniform price was $16.70 per cwt, $0.20 higher than last month but $2.08 lower than last year.

OCTOBER MAILBOX MILK PRICES (FMMO): In October 2020, mailbox milk prices for selected reporting areas in Federal milk orders averaged $17.98 per cwt, up $1.36 from the September 2020 average but down $1.36 per cwt from the October 2019 average. The component tests of producer milk in October 2020 were: butterfat, 3.97 percent; protein, 3.24 percent; and other solids, 5.77 percent.

JANUARY RETAIL MILK PRICES (FMMO): U.S. simple average prices are: $3.61 per gallon for conventional whole milk, $3.57 per gallon for conventional reduced fat 2% milk, $4.10 per half gallon organic whole milk, and $4.10 per half gallon organic reduced fat 2% milk.

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DAIRY MARKET NEWS, JANUARY 25 - 29, 2021	-2-				VOLUME 88, REPORT 4
COMMODITY	MONDAY	TUESDAY	WEDNESDAY	THURSDAY	FRIDAY	::	WEEKLY	::	WEEKLY
	JAN 25	JAN 26	JAN 27	JAN 28	JAN 29		CHANGE		AVERAGE
CHEESE
BARRELS	$1.3925	$1.4000	$1.4000	$1.3900	$1.3900	::	(-0.0025)	::	$1.3945
	(N.C.)	(+0.0075)	(N.C.)	(-0.0100)	(N.C.)	::	::	(-0.0511)
40 POUND BLOCKS	$1.6100	$1.5925	$1.5925	$1.5750	$1.5750	::	(-0.0350)	::	$1.5890
	(N.C.)	(-0.0175)	(N.C.)	(-0.0175)	(N.C.)	::	::	(-0.1091)
NONFAT DRY MILK
GRADE A	$1.1625	$1.1375	$1.1650	$1.1725	$1.1725	::	(N.C.)	::	$1.1620
	(-0.0100)	(-0.0250)	(+0.0275)	(+0.0075)	(N.C.)	::	::	(-0.0305)
BUTTER
GRADE AA	$1.3600	$1.2800	$1.2800	$1.2675	$1.2450	::	(-0.1575)	::	$1.2865
	(-0.0425)	(-0.0800)	(N.C.)	(-0.0125)	(-0.0225)	::	::	(-0.1298)
DRY WHEY
EXTRA GRADE	$0.5400	$0.4975	$0.5100	$0.5300	$0.5350	::	(-0.0050)	::	$0.5225
	(N.C.)	(-0.0425)	(+0.0125)	(+0.0200)	(+0.0050)	::	::	(-0.0150)

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

WWW.AMS.USDA.GOV/MARKET-NEWS/DAIRY

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

BUTTER MARKETS

NORTHEAST

Butter churns continue to run on heavy schedules at most balancing plants. International buyers' interests are steady. Some plants with cream contract obligations have sold occasional loads of cream on the spot market, but supplies have tightened up some this week. In general, the market is willing to pay in the low to mid 120s for cream loads. Sources see inventories as fairly normal for this time of year. For many buyers, current orders are being placed for near term needs, while others continue to procure for the future. Food service activity is up as the box program drives purchases. Retail sales are good. Bulk butter activity is thriving as end-users in the baking sector seize on current market prices. The markup for butter in the Eastern spot market is 4-8 cents over the CME, with various time frames and averages used.

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

and Edible Butter	+0.0400 - +0.0800
Bulk Basis Pricing - 80% Butterfat $/LB:

CENTRAL

Cream remains plentiful in the Midwest for butter churning. Butter plant managers say multiples ticked up slightly, but cream offers remain aplenty from both local and Western sources. Cream suppliers are working out trucking hiccups in order to get cream from the West, where it is reportedly abundant. Naturally, churning is and has been very busy early in the year. Retail sales are strong, better than expected according to some contacts this week. Still, the elephant in the room remains to be food service sales, or a lack thereof. Additionally, contacts report uncertainty with the amount of butter available and a bearish NASS Cold Storage report regarding December 2020 inventories (below). Generally, markets remain in a bearish shadow coming into the last month of "old crop" butter trading on the CME market.

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:

WEST

Western butter production is active at seasonal levels. Milk supplies remain heavy, keeping plants running at full capacity. Cream picked up, but multiples did not take the dive some expected. Multiples range 1.05-1.19, depending on the distance and location of the plant. On the demand side, retail sales are flat, following a brisk two day order cycle, after the Food Box announcement. Butter manufacturers anticipate that once the new crop deadline passes, the market should see some renewed interest. On the other hand, the Cold Storage announcement could potentially suppress orders this week. Bulk butter interest has erupted as buyers look for multiple loads. The f.o.b. West bulk butter price is $0.0200 below to $0.0800 above the CME, with various time and averages used.

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

and Edible Butter	-0.0200 - +0.0800
Bulk Basis Pricing - 80% Butterfat $/LB:

Secondary Sourced Information:

COLD STORAGE - BUTTER SUMMARY

Released January 25, 2021, by the National Agricultural Statistics Service (NASS), Agricultural Statistics Board, United States Department of Agriculture (USDA).

	Stocks in all Warehouses (1,000 pounds)		12/31/20
	as a percent of
Butter Stocks	12/31/19	11/30/20	12/31/20	12/31/19	11/30/20
189,655	251,820	273,790		144	109

DAIRY MARKET NEWS, JANUARY 25 - 29, 2021	-3-	VOLUME 88, REPORT 4
	CHEESE MARKETS
NORTHEAST		WHOLESALE SELLING PRICES: DELIVERED
	DOLLARS PER POUND(MIXED LOTS (1000-5000 POUNDS))

Northeast cheese makers are close to or at full capacity. Milk supplies are aplenty in the region. As January is coming to a close, cheese production continues to be steadily strong. Cheddar cheese manufacturers are running on active production schedules. Mozzarel- la and provolone cheese operations are clearing heavy milk volumes for strong cheese processing. Current inventory levels are stable to shortening. On the spot market, cheese trading activities are mixed. There are several buyers not purchasing on the spot market. Retail demands are fairly steady with little to no reports of a change in or- ders. Foodservice sales are soft. Pizzerias and eateries are ordering some cheese supplies and working through capacity restrictions and service options. Cheese markets are somewhat softening.

WHOLESALE SELLING PRICES: DELIVERED

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

Cheddar 40 pound Block	2.1500-2.4375
Muenster	2.1375-2.4875
Process American 5 pound Sliced	1.5450-2.0250
Swiss 10-14 pound Cuts	3.8725-4.1950

MIDWEST

Cheese sales vary by type. Contacts have reported stronger cheddar sales into retail outlets, while some mozzarella producers are reporting softer customer interest. East coast based customers are definitely hit and miss, with restricted access to restaurants and other food service entities. Production remains busy. A few plant managers have reported demand is hearty enough to outdo production capacity, while there are concerns elsewhere that inventories are growing/ expected to grow while customers wait out some sentiment of market stability. Plenty of milk remains to be the story in the Midwest. Current spot milk load prices are similarly discounted to previous weeks, but cheesemakers did relay they are receiving fewer offers week to week.

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

Cheddar 10 pound Cuts	2.0250-2.2250
Cheddar 40 pound Block	1.7775-2.2675
Monterey Jack 10 pounds	2.0125-2.2875
Process American 5 pound Loaf	1.5475-1.8025
Swiss 6-9 pound Cuts	3.6800-4.1100

FOREIGN TYPE

The United States continues to be the main importer of cheese from the European Union. Yet those imports have been declining during 2020. European cheesemakers are of two minds about this. For many years there have been active efforts to develop cheese export relationships from the EU where dairy exporters tend to like having continuing relationships with trade partners. Thus, a decline in exports is not- ed. During 2020 however, EU cheesemakers have been stretched to produce enough to satisfy domestic and export demand, even with increasing cheese production. With various events in the US leading to fluctuation in cheese pricing during 2020, that ameliorates some of the EU concern over any significant disintegration of relationships with US customers. Looking ahead into 2021, cheesemakers in the EU expect to maintain very substantial exports of cheese to US cus- tomers.

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

VARIETY	:	NEW YORK	:	DOMESTIC
:	IMPORTED
Blue	:		:
:	2.6400-5.2300 :2.1575-3.6450*
Gorgonzola	:	3.6900-5.7400 :2.6650-3.3825*
Parmesan	:	-0-	:	3.5450-5.6350*
Romano	:	-0-	:	3.3475-5.5025*
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.

Blue 5 pounds	2.3325-3.4025
Brick 5 pounds	2.0650-2.4900
Cheddar 40 pound Block	1.7875-2.1875
Monterey Jack 10 pounds	2.0400-2.2450
Mozzarella 5-6 pounds	1.8650-2.8100
Muenster 5 pounds	2.0650-2.4900
Process American 5 pound Loaf	1.5300-1.8900
Swiss 6-9 pound Cuts	3.3875-3.5050

WEST

Western cheese manufacturers are working hard to process the ample supply of milk and to find markets in which to move cheese. Howev- er, there is a lot of milk and there is a lot of cheese available. Cheese inventories are heavy. Converters and end users relay getting multiple offers from manufacturers. But buyers are still cautious. Market price volatility is creating significant challenges to forecasting cheese needs. Market participants do not want to get on the wrong end of a swing in market prices. Industry contacts suggest demand is all over the place. Retail demand is holding but losing a little steam from the pre-winter holiday season. Mozzarella demand is starting to slow as the football playoffs draw to a close. While cheese demand from some fast-food chains is strong, food service sales are still way down. Cheese sellers are holding out hope that shuttered restaurants in parts of the U.S. may be able to re-open, or open more fully soon.

COLD STORAGE

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

01/25/2021	:	BUTTER	:	CHEESE
:	56055	85078
01/01/2021	:	45415	:	77986
CHANGE	:	10640	:	7092
% CHANGE	:	23	:	9

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