August 12

8/12 - In the August Dairy Products Report, the USDA said total cheese output was up 0.6% (from a year ago) in June and that YTD production is up 0.8%. However, cheddar output is down 2.8% YTD. Since block cheddar is what’s used to settle contracts at the CME, cheese “market” prices are likely to remain well supported through year’s end. Block cheese prices averaged $1.79/lb in June; $1.82 in July, and are currently $1.8675. YTD, block is averaging $.10/lb above 2018 levels. Look for block prices to peak in October near $1.90 and average $1.85 for the 2nd half of 2019. The forecast for butter is also bullish with YTD output down 1.9% from a year ago. Butter prices averaged $2.39/lb in June and July and are currently $2.3150. YTD, butter is averaging $.06/lb above 2018 levels. Look for butter to be near $2.50/lb for Oct-Nov and average $2.45 for the 2nd half of 2019.