Dairy Market News Weekly Report (DYWWEEKLYREPORT)

DAIRY MARKET NEWS

WEEK OF JANUARY 3 - 7, 2022 VOLUME 89, REPORT 1

DAIRY MARKET NEWS AT A GLANCE

CME GROUP CASH MARKETS (01/07)

BUTTER: Grade AA closed at $2.7425. The weekly average for Grade AA is $2.6670 (+0.2595).

CHEESE: Barrels closed at $1.8650 and 40# blocks at $1.9950. The weekly average for barrels is $1.8245 (+0.1410) and blocks, $2.0210 (+0.0710).

NONFAT DRY MILK: Grade A closed at $1.7100. The weekly average for Grade A is $1.6670 (+0.0095).

DRY WHEY: Extra grade dry whey closed at $0.7575. The weekly average for dry whey is $0.7535 (+0.0035).

CHEESE HIGHLIGHTS: With the holidays behind, there is still an adequate amount of available milk for Class III cheese vats to satisfy the steadfast demand of a bullish cheese market. Along with COVID triggered labor shortages, hauling shortfalls and costly transportation fees, manufacturers are processing yet another supply chain challenge. Wintery weather conditions in the West and Northeast are further slowing the transporting of milk supplies to cheese production facilities, prompting tighter inventories in some instances. In general, cheese production in the regions this week is reported steady to lower in the West, mixed in the Midwest, and moderate in the East. Overall, interest is steady to stronger and supports the uphill adjustment in the block/barrel wholesale market prices this period.

BUTTER HIGHLIGHTS: Cream availability varies. Cream is tighter in the East and Central regions. While supplies are more available in the West, access has been stymied by inclement weather and limited drivers. Butter production is mixed. Spot availability is limited, and unsalted butter is noted to be more difficult to source than salted. Domestic demand is steady to stronger from retail and food service sectors. Export demand is healthy, as well, as global butter supplies are tight and U.S. prices are competitive. Across the country, bulk butter overages range from 7 to 18 cents above market.

FLUID MILK: Milk production is mixed between and within regions. Class I demand is increasing as winter breaks come to an end.

Spot milk availability is varied. Where available, cheesemakers are acquiring milk at from $4 under Class to $1 under Class. Cream availability is tight in the Midwest and being supplemented by cream from the West. Eastern cream availability is mixed. Cream cheese manufacturers are active in seeking cream. In all regions transportation delays are reported, some weather related and some due to a shortage of drivers. F.O.B. cream multiples for all classes are 1.20-1.33 in the East, 1.25-1.35 in the Midwest, and 1.00-1.25 in the West.

DRY PRODUCTS: Low/medium heat nonfat dry milk prices moved higher. Western high heat NDM prices are higher. Availability of NDM is mixed. Demand is steady. Port congestion, bad weather, and driver shortages remain complicating factors. Dry buttermilk prices notched increases. Production is steady to lower. Spot market buyers are reporting limited availability. Dry whole milk prices are steady. Production is focused on contract orders. Dry whey prices strengthened. Domestic demand is steady while international demand is higher. Availability is tight in some areas. Whey protein concentrate (WPC) 34% prices moved higher. Demand is strong while inventories are snug. Lactose prices are lower at the bottom of the range but steady at the top. Demand is tame. Acid and rennet casein prices strengthened. Buyer uncertainty and anxiety are present.

INTERNATIONAL DAIRY MARKET NEWS (DMN): WESTERN EUROPEAN OVERVIEW: As 2022 opens, dairy analysts in Western Europe foresee: continuing firm dairy markets; production and transportation challenges resulting from labor shortages; uncertainty related to COVID factors; and cost pressures. In short, similar factors to those dominant during 2021. Looking ahead, 2022 milk production is expected to continue to be lower than desired. Decisions will have to be made regarding allocating available milk among dairy products. Currently cheese continues to be high on the priority list.

-CONTINUED ON PAGE 1A-

TABLE OF CONTENTS

Product Highlights/CME/DMN at a Glance	1	Dry Whey/WPC 34%/Lactose/Casein	6	November Dairy Product Highlights	13
Weekly CME Cash Trading/Butter Markets	2	U.S. Dairy Cow Slaughter/Class Milk Prices/NDPSR/Futures	7	December Final Class Prices by Order	14
Cheese Markets	3	International Dairy Market News	8	Dairy Graphs	G1
Fluid Milk and Cream	4	DMN December Monthly Averages	9	National Retail Report - Dairy
Nonfat Dry Milk/Dry Buttermilk/Dry Whole Milk	5	November Agricultural Price Highlights	12	Dairy Market News Contacts

				DAIRY MARKET NEWS PRICE SUMMARY FOR JANUARY 3- 7, 2022
				PRICES ($/LB) & CHANGES FROM PREVIOUS PUBLISHED PRICES
Commodity	Range	Mostly	Commodity	Range	Mostly	Commodity	Range	Mostly
NDM					BUTTERMILK					LACTOSE
Central Low/Med. Heat	1.6000	1.7150	1.6200	1.6700	Central/East	1.4500	1.5300			Central/West	0.3200	0.5300	0.3600	0.4500
Change	0.0400	0.0150	0.0200	0.0225	Change	0.0500	N.C.			Change	-0.0100	N.C.	N.C.	N.C.
Central High Heat	1.7100	1.8300			West	1.4100	1.5100	1.4300	1.4600	WPC 34%
Change	N.C.	-0.0200			Change	0.0300	0.0300	0.0200	0.0100	Central/West	1.2800	1.5225	1.3500	1.4200
West Low/Med. Heat	1.5700	1.7125	1.6200	1.6600	WHEY					Change 0.0300 0.0225 0.0500	0.0275
Change	0.0250	0.0325	0.0200	0.0100	Central	0.6500	0.7500	0.6750	0.7150	CASEIN
West High Heat	1.7475	1.8350			Change	N.C.	0.0150	0.0100	0.0150	Rennet	4.8000	5.0400
Change	0.0375	0.0550			West	0.6550	0.8000	0.6925	0.7600	Change	0.0300	0.0500
DRY WHOLE MILK					Change	0.0225	0.0200	N.C.	0.0200	Acid	5.1000	5.9500
National	1.8000	1.9400			Northeast	0.6300	0.7225			Change	0.1400	0.1400
Change	N.C.	N.C.			Change	0.0100	0.0075			ANIMAL FEED WHEY
										Central	0.5200	0.5800
										Change	0.0200	0.0600

			DAIRY MARKET NEWS PRICE SUMMARY FOR DECEMBER 27, 2021 - JANUARY 7, 2022
			PRICES ($/MT) & CHANGES FROM PREVIOUS PUBLISHED PRICES
Commodity	Range	Commodity	Range	Commodity	Range
SMP			WHOLE MILK POWDER			BUTTER
W. Europe	3750	3900	W. Europe	4675	4925	W. Europe	6425	6925
Change	100	N.C.	Change	175	75	Change	350	250
Oceania	3750	3800	Oceania	3850	3875	Oceania	5850	5950
Change	75	N.C.	Change	N.C.	-125	Change	25	N.C.
S. America	2900	3400	S. America	3450	3750	BUTTEROIL
Change	N.C.	N.C.	Change	N.C.	N.C.	W. Europe	6375	7925
WHEY						Change	250	75
W. Europe	1250	1425				CHEDDAR CHEESE
Change	N.C.	25				Oceania	5450	5575
						Change	350	300

WEEK OF JANUARY 3 - 7, 2022	DAIRY MARKET NEWS	VOLUME 89, REPORT 1
	DAIRY MARKET NEWS AT A GLANCE

-CONTINUED FROM PAGE 1-

EASTERN EUROPEAN OVERVIEW: Poland continues to lead other Eastern European milk producing countries in dairy output. As with Western Europe, cheese production remains a priority. Internal demand for cheese has restricted availability for export markets.

OCEANIA OVERVIEW: AUSTRALIA: A wet spring in Austral- ia has helped with feed growth. More recent heavy rain has complicated harvesting feed. Higher costs for fertilizer cause some concern for prof- itability. Farm labor shortages persist. Cow milk yields are noted to be adversely affected by wet and cold weather. As the current milk season moves forward, seasonal production is considered less likely to increase over last season.

NEW ZEALAND: One of the larger New Zealand dairy processors has increased the milk pay price to what is categorized as a record level for that processor. Strong demand for milk is what is said to have resulted in the increased price. The current demand is also reflected in farm sale prices. The median price per hectare for New Zealand dairy farm sales has been reported to be rising.

SOUTH AMERICAN OVERVIEW: Dairy production on the continent was mixed throughout 2021, but one consistency is being reported from South to North: increasing logistical costs, with an emphasis on growing feed prices, are expected to impact on-the-farm milk production near term. Recent reports for end-of-year milk production point to growth in Argentina, while other large South American producing coun- tries, such as Brazil and Uruguay, continue to see declining output fig- ures. Undoubtedly, economic uncertainties across the region due to pandemic impacts at the retail/consumer level and currency devaluations have left the dairy sector in choppy waters moving into 2022.

NATIONAL RETAIL REPORT (DMN): The total number of conventional dairy ads grew by 15 percent this week. Organic ad numbers increased 183 percent. During this 2022 January cold spell, frequent number one advertised item conventional ice cream in 48 - 64-ozcontainers yielded to conventional 4-6oz Greek yogurt as the most advertised dairy product. The weighted average advertised price for 4-6oz Greek yogurt, $.98, is up $.02 from last week. Ads for both organic and conventional half gallons of milk nearly quadrupled. Conventional half gallon milk has a national weighted average advertised price of $1.52. Organic half gallons have a national weighted average advertised price of $4.10, resulting in a $2.58 organic milk price premium.

NOVEMBER AGRICULTURAL PRICES HIGHLIGHTS (NASS): The All Milk price received by farmers was $20.80 in Novem- ber, down $0.30 from November 2020. The alfalfa hay price was $210.00 in November, up $46.00 from November 2020. The corn price was $5.27 in November, up $1.48 from November 2020. The soybean price was $12.20 in November, up $1.90 from November 2020. The milk-feedprice ratio was 1.94 in November, down 0.64 from November 2020. The index of prices received by farmers for dairy products during the month of November 2021 was up 5.5 to 103.5. Compared to No- vember 2020, the index was down 1.5 (1.4%) percent. The index of prices paid by farmers for commodities and services, interest, taxes, and wage rates in November 2021 was up 0.8 point to 118.5. Compared with November 2020, the index was up 8.9 points (8.1 percent).

NOVEMBER DAIRY PRODUCTS HIGHLIGHTS (NASS): Butter production was 156 million pounds, 9.6 percent below Novem- ber 2020, and 3.0 percent below October 2021. American type cheese production totaled 438 million pounds, 2.7 percent below November 2020, and 4.6 percent below October 2021. Total cheese output (excluding cottage cheese) was 1.12 billion pounds, 1.6 percent above November 2020, but 2.9 percent below October 2021. Nonfat dry milk production, for human food, totaled 132 million pounds, 15.0 percent below November 2020, but 7.3 percent above October 2021. Dry whey production, for human food, was 72.6 million pounds, 8.6 percent above November 2020, but 5.5 percent below October 2021. Ice cream, regular hard production, totaled 53.9 million gallons, 1.7 percent below No- vember 2020, and 3.2 percent below October 2021.

DECEMBER FINAL CLASS PRICES BY ORDER (FMMO): The following are the December 2021 class prices under the Federal milk order pricing system and changes from the previous month: Class

1. $19.84 ($+1.44), Class III: $18.36 ($+0.33), and Class IV: $19.88 ($+1.09). Under the Federal milk order pricing system, the butterfat price for December 2021 is $2.2919 per pound. Thus, the Class II but- terfat price is $2.2989 per pound. The protein and other solids prices for December 2021 are $2.5937 and $0.4532 per pound, respectively. These component prices set the Class III skim milk price at $10.71 per cwt. The December 2021 Class IV skim milk price is $12.29, which is de- rived from the nonfat solids price of $1.3655 per pound. The product price averages for December 2021 are: butter $2.0641, nonfat dry milk $1.5471, cheese $1.7542, and dry whey $0.6391.

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