The October Cold Storage report served a little fodder to the bulls for Thanksgiving. Oct. 31 butter stocks totaled 237.7 million pounds, down an impressive 52.9 million pounds or 18.2% from September and just 6.5 million pounds or 2.8% above October 2018. Revisions lowered the original September count by 11.5 million pounds.

American cheese stocks totaled 742.8 million pounds, down 32 million pounds or 4.1% from September and 68.8 million or 8.5% below a year ago.

Stocks in the “other” cheese category inched up to 573.3 million pounds, up 6.3 million pounds or 0.1% from September but were up 40.5 million or 7.6% from a year ago.

The total cheese inventory slipped to 1.342 billion pounds, down 31.6 million pounds or 2.3% from September and 32.9 million pounds or 2.4% below September 2018.

CME butter fell below $2 per pound in the Thanksgiving holiday shortened week while the other products strengthened. The 40-pound Cheddar blocks closed Wednesday at $1.9625 per pound, 12 cents higher on the week and 60.25 cents above that week a year ago.

The 500-pound Cheddar barrels saw a Wednesday close at $2.2475 per pound, up 6.25 cents on the week, 93.25 cents above a year ago, and an inverted 28.5 cents above the blocks. 7 cars of block traded hands in the three days of trading, 49 on the month of November, down from 63 in October. Only 2 cars of barrel sold on the week, with 16 for the month, down from 66 in October.

Midwestern cheesemakers say the short holiday week saw continued weakness in ordering. “Expectations were not strong, as market tones are creating a hesitant buyer sentiment,” says DMN. Extra holiday milk was running as low as $5 under Class. Spot milk was available, but there were still some premiums reported. Some cheesemakers suggest this is their first year seeing premiums on spot milk on Thanksgiving week. Market tones are creating anxiety among contacts in the region. Some are hopeful for late season Super Bowl related buying activity but “generally, the market tone is not on terra firma.”

Western contacts report that spot cheese sales are a bit slower to materialize as most customers have enough stocks and are not looking to purchase more. The recent declines in CME prices were reinforcing the wait and see approach.

Retail sales are at seasonal levels and contractual negotiations for 2020 are what end users and buyers are working on. A lot of milk continues to move to cheese vats for processing. There’s sufficient stocks of blocks and barrels in warehouses but barrel stocks are becoming more available compared to previous weeks.

Butter makers say there were a lot of spot cream loads being offered Thanksgiving Week. Fall stores of bulk butter have been pulled down pretty briskly, according to plant managers. Regional contacts say lower prices may be timely and may spur more buying following holiday demand peaks.

Western butter makers report strong demand for print butter. Thanksgiving sales were solid and retailers appear eager to reorder for the next holiday push. Cream supplies are plentiful and inexpensive, resulting in active butter production.

Cash Grade A nonfat dry milk closed Wednesday at $1.2375 per pound, up 1.75 cents on the week, highest it has been since November 4, 2014, and 33.25 cents above a year ago. 15 carloads found new homes on the week, with 69 for the month of November, 9 more than in October.

China’s combined October dairy imports were up almost 6% from October 2018, according to the latest data. The gains were primarily driven by whole milk powder, up 36.5% from October 2018, according to HighGround Dairy’s Lucas Fuess in the Dec. 2 Dairy Radio Now broadcast. That’s the strongest October volume since 2013, he said, with sharply higher imports from both New Zealand and Australia versus a year ago.

New Zealand remained the top source, holding 89% market share in the month with volumes surging 53% higher year over year. Volumes from Australia were more than double prior year levels. Only 1 metric ton came from the U.S., he said, comparable to a year ago, thanks to the tariff spat with the U.S., and down versus the 1,302 metric tons sent there in October 2017.

Skim milk powder imports were down 3.2% from a year ago and whey products were off 8.7% from a year ago and 21.3% year to date. Fuess says the U.S. remains the No. 1 supplier of whey products; however, African Swine fever continues to devastate China’s hog herd, and there’s no new information on that.

Butter and anhydrous milkfat were down 3.4% and 26.1% respectively, but cheese imports were up 18.1%. Fuess says China is typically not a big buyer of cheese, compared to other Asian countries, but HGD sees continued and steady future growth there in cheese purchases.

A higher All Milk price pushed the October milk feed price ratio a little higher, the fourth consecutive month of gain. The USDA’s latest Ag Prices report put the ratio at 2.39, up from 2.33 in September and compares to 2.22 in October 2018.

The index is based on the current milk price in relationship to feed prices for a dairy ration consisting of 51% corn, 8% soybeans and 41% alfalfa hay. In other words, one pound of milk today purchases 2.39 pounds of dairy feed containing that blend.

The U.S. All-Milk price averaged $19.90 per hundredweight, up 60 cents from September and $2.40 above October 2018. California’s All Milk price was $18.90, up 30 cents from September and $1.86 above a year ago. Wisconsin’s, at $20.50, was up 60 cents from September and $2.70 above a year ago.

Looking at the cow side of the ledger, the October cull price for beef and dairy combined averaged $60.90 per hundredweight, down $4.70 from September, $3.10 above October 2018, but $10.70 below the 2011 base average of $71.60 per hundredweight.

FC Stone made an interesting observation on slaughter data in its Nov. 25 Early Morning Update, stating: “Slaughter was down 0.7% from last year in October. We don’t know exactly how many cows were imported for slaughter in October, but it was likely down from last year, so we’re calling slaughter of domestic cows was likely about flat compared to year ago. The slaughter data would suggest that the herd should have fell in October, yet the Milk Production report says it grew 5,000 head. Maybe there are more heifers out there than the USDA estimated,” suggests FC Stone.

Cooperatives Working Together member cooperatives accepted twelve offers of export assistance from CWT that helped them capture sales contracts for 1.572 million pounds of Cheddar and Monterey Jack cheese, 661,387 pounds of whole milk powder and 149,914 pounds of cream cheese.

The product is going to customers in Asia, the Middle East and South America, now through May 2020 and brings CWT’s 2019 exports to 46.7 million pounds of American-type cheese, 123,458 pounds of anhydrous milkfat, 4.6 million pounds of butter (82% milkfat), 6.2 million pounds of cream cheese and 45.1 million pounds of whole milk powder.

In politics, the National Milk Producers Federation says the recent Dean Foods bankruptcy underscores the importance of cooperatives. An NMPF press release stated: “Cooperatives have played a crucial role in protecting their members’ economic interests for more than a century. As the industry deals with the uncertainty surrounding what the processing landscape will look like post-Dean Foods, hundreds of dairy farmers have no doubt been wondering what ultimately will happen to their milk as the bankruptcy sorts itself out.”

“Some cooperative members might be among those wondering, but their membership in a co-op can help provide more certain answers,” says NMPF. “Finding markets for milk is what cooperatives do, 365 days a year, regardless of disruptions that may develop. With the strength of the co-op backing them up, farmers know they have expertise and networks they can rely upon to help handle the unexpected. Even in temporary situations when milk deliveries exceed processing capacity, co-op members still have steady, predictable access to markets for their milk. When processors struggle, co-ops help protect farmers and consumers,” says NMPF.