By  E. W. Lang

CME cash nonfat dry milk began this week at a a seven year record price of $1.36 per. lb.  It closed at $1.34 on Friday.  Block cheese gained four cents at $1.73 and barrels gained nine at $1.48 per lb.  Butter was down one at $1.79 per lb.

The October Milk-Feed Index ended the week up 55 cents at $7.75 per cwt.  It was $8.24 on Wednesday and two years ago it was $11 per cwt.  Milk at the time was at a contract high of $18.23 and corn was at a contract low of $3.48 per bushel.  September corn is $5.03 right now.

Class III Milk Futures for Sept. and Oct. ended the week averaging $16.97 per cwt., up 22 cents since Friday, last.  Class IV average for Sept. and Oct. was up 15 cents at $16.64.

USDA is estimating 2021 and 2022 milk production to be less than their estimate of a month ago.  I'd suggest putting little weight on this for marketing purposes, not because I think it will be wrong, rather because it likely will be wrong for any number of reasons.

Right now, December corn is $5.17 but that could be $3.50 before Christmas.  Corn producers' ability to turn out product is as great as the genetic potential of today's seed corn.  So it is with the ability of milk producers, if a buyer will take their additional production.  Lower feed cost will incentivize milk producers to turn out whatever production they are able to sell to someone.  It is human nature to do so in response to market forces, and also what it takes to keep the lights on, figuratively and literally, unfortunately. 

Right now, milk producers buying feed, selling milk and paying help at current prices are consumed  with financial grief.  It has been some time since USDA has sent out much of a bonus subsidy, though there may be one in October, after their new fiscal year starts.  It is something to address the negative Producer Price Differentials of a year or two ago.  It will be enough to help, but not enough to get anyone back to ground zero, financially.

There have been some big dispersals out west and a lot are being scheduled throughout the rest of the country, fostering more dairy consolidation.  Some will have a bank officer dropping by the clerk's table at the end of the day to collect the entirety of the sale's proceeds.