Dairy Market News Weekly Report (DYWWEEKLYREPORT)

DAIRY MARKET NEWS

WEEK OF JANUARY 17 - 21, 2022 VOLUME 89, REPORT 3

DAIRY MARKET NEWS AT A GLANCE

CME GROUP CASH MARKETS (1/21)

BUTTER: Grade AA closed at $2.9350. The weekly average for Grade AA is $2.8744 (+0.0814).

CHEESE: Barrels closed at $1.8125 and 40# blocks at $1.8075. The weekly average for barrels is $1.8725 (-0.0180) and blocks, $1.8444 (- 0.1581).

NONFAT DRY MILK: Grade A closed at $1.8150. The weekly average for Grade A is $1.8313 (+0.0678).

DRY WHEY: Extra grade dry whey closed at $0.8000. The weekly average for dry whey is $0.7900 (+0.0255).

CHEESE HIGHLIGHTS: Milk availability continues to vary for cheese producers from region to region and plant to plant, but current reports do not show a tight milk market, at least right now. Spot milk prices ranged from $1 to $.50 under Class, while last year's range during this week was $8.50 to $4 under Class. Retail cheese demand has quieted in the Western region, while international demand remains strong. Eastern contacts say retail demand is steady/strong during football's playoff season. Staffing shortages continue to plague plant managers, with plant workers, but also with drivers and office employees. Cheese market tones are wavering. Last week's barrel price bullishness met and lost to bears this week.

BUTTER HIGHLIGHTS: Cream supplies are available to butter makers. Some loads are traveling from the West to the Midwest. However, high freight costs, driver shortages, and inclement weather are reportedly posing some challenges to moving cream. Cream demand is firm, and butter production is active. Some Eastern manufacturers are increasing production and churning seven days a week to bulk up shrinking inventories. Microfixing is active to satisfy good retail print butter demand. In the West, operations at some butter plants are limited by labor issues and delayed production supply deliveries. Butter inventories are tight, and spot purchasers report salted is still easier to source than unsalted. Butter demand is strong in domestic and international markets. Bulk butter overages range from 8 to 19 cents above market throughout the country.

FLUID MILK: While milk production varies due to inclement weather in the Midwest to Eastern regions, Class I demand continued to show promise in most areas this week. Western region milk levels are generally steady to higher. In some cases, retail bottling demand was up due to shoppers stocking up ahead of Winter Storm Izzy last weekend and current frigid temperatures covering swaths of the nation. COVID related employee shortages continue to inhibit processing/bottling plants, so in certain cases milk handlers have to find alternate homes for their milk/cream. Cheesemakers in the Midwest reported spot milk prices from $1 to $.50 under Class III, a large price increase when compared to last year. Condensed skim is noted as available, but hauling continues to burden producers and buyers, across the country. Butter churners are busily seeking cream, which remains stably available nationally. F.O.B. cream multiples are 1.15-1.32 in the East, 1.26-1.33 in the Midwest, and 1.00-1.28 in the West.

DRY PRODUCTS: Most dairy powder markets remain in a bullish status this week, as tight supplies and steady to strong demand are reported. Low/medium heat nonfat dry milk (NDM) prices increased at every price point, while high heat NDM top-end prices breached the $2 mark in all regions. Dry buttermilk powder prices held steady in the Central/East on slow trading, while Western region prices increased as processors face delays and short staffing. Dry whole milk prices moved higher again, after last week's large price hikes. Bakers are reportedly gearing up demand ahead of the spring holidays. Dry whey prices moved higher again, as some Midwestern end users reported finding loads in the high $.60s in totes, but most trades are taking place in the low/mid $.70s. Whey protein concentrate 34% prices increased on the top of the mostly and both ends of the range, as dairy protein demand is resolute. Lactose prices are unchanged, as dairy carbohydrate markets are slack when compared to the bullish protein markets. Acid and rennet casein prices are higher, on very tight supplies.

-CONTINUED ON PAGE 1A-

TABLE OF CONTENTS

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

				DAIRY MARKET NEWS PRICE SUMMARY FOR JANUARY 17 - 21, 2022
	Range		PRICES ($/LB) & CHANGES FROM PREVIOUS PUBLISHED PRICES
Commodity	Mostly	Commodity	Range	Mostly	Commodity	Range	Mostly
NDM					BUTTERMILK					LACTOSE
Central Low/Med. Heat	1.7000	1.8700	1.7400	1.8000	Central/East	1.4500	1.5500			Central/West	0.3200	0.5300	0.3600	0.4500
Change	0.0550	0.0700	0.0600	0.0750	Change	N.C.	N.C.			Change	N.C.	N.C.	N.C.	N.C.
Central High Heat	1.8400	2.0500			West	1.4400	1.6150	1.4800	1.5500	WPC 34%
Change	0.1200	0.2100			Change	0.0100	0.0350	0.0250	0.0400	Central/West	1.3300	1.5850	1.3900	1.5000
West Low/Med. Heat	1.6800	1.9250	1.7000	1.7400	WHEY					Change	0.0300	0.0250	N.C.	0.0700
Change	0.0700	0.1325	0.0600	0.0600	Central	0.6600	0.8000	0.7200	0.7500	CASEIN
West High Heat	1.8525	2.0350			Change	0.0025		0.0200	0.0200	Rennet	4.8600	5.0900
Change	0.0950	0.1100			West	0.6725	0.8000	0.7150	0.7800	Change	0.0400	0.0200
DRY WHOLE MILK					Change	0.0175	N.C.	0.0125	0.0100	Acid	5.8500	5.9700
National	1.9350	2.2600			Northeast	0.6700	0.7600			Change	0.0500	0.0200
Change	0.0150	0.0600			Change	0.0200	0.0175			ANIMAL FEED WHEY
										Central	0.5200	0.5800
										Change	N.C.	N.C.

			DAIRY MARKET NEWS PRICE SUMMARY FOR JANUARY 10 - 21, 2022
			PRICES ($/MT) & CHANGES FROM PREVIOUS PUBLISHED PRICES
Commodity	Range	Commodity	Range	Commodity	Range
SMP			WHOLE MILK POWDER			BUTTER
W. Europe	3875	4050	W. Europe	4800	5025	W. Europe	6500	6950
Change	125	150	Change	125	100	Change	75	25
Oceania	3900	4000	Oceania	4000	4100	Oceania	5850	6200
Change	150	200	Change	150	225	Change	N.C.	250
S. America	3250	3600	S. America	3600	3750	BUTTEROIL
Change	350	200	Change	150	N.C.	W. Europe	6400	8625
WHEY						Change	25	700
W. Europe	1325	1500				CHEDDAR CHEESE
Change	75	75				Oceania	5500	5750
						Change	50	175

WEEK OF JANUARY 17 - 21, 2022	DAIRY MARKET NEWS	VOLUME 89, REPORT 3
	DAIRY MARKET NEWS AT A GLANCE

-CONTINUED FROM PAGE 1-

INTERNATIONAL DAIRY MARKET NEWS (DMN): WESTERN EUROPEAN OVERVIEW: Western European contacts voice two primary wishes for 2022. First, there is a strong desire for higher milk production. Second, they wish that logistical and worker shortage obstacles in manufacturing, transportation and shipping, would fade away. This year has begun with sources citing lower milk production than this time last year in Germany and France, the two largest Western European milk producing countries. Seasonal production is trending higher, but at a lower level than in 2021.

EASTERN EUROPEAN OVERVIEW: Milk Production in Poland January - November 2021 increased 0.4 percent from January - Novem- ber 2020 according to CLAL data made available to USDA. Butter production for the period was -5.6percent. Cheese recorded the greatest increase of primary dairy products, up 3.3 percent. Among the powders, WMP was +2.3 percent and SMP was -6.5percent.

OCEANIA OVERVIEW: AUSTRALIA: Australian dairy producers expect good profitability this season. Some processors are offering higher farmgate milk prices as they seek additional volumes from geographically well-placedproducers. Weather, especially heavy rain, continues to be problematic for decent pasture growth in some areas. Continuing milk supply tightness is expected to keep upward pressure on dairy product prices and ultimately, farmgate milk prices.

NEW ZEALAND OVERVIEW: Many dairy market regulars in New Zealand expect the record of recent milk production undershooting year ago production to continue when December 2021 data is available. The cold and wet spring conditions that continued into November are generally thought to have been a big factor in recent lower milk output. Concerning December 2021, it is also noted that December 2020 notched very good milk production. That is another factor that will make it more difficult for December 2021 to exceed December 2020. December pasture growth was not as good as had been hoped for. Dry and hot conditions currently prevailing in New Zealand, especially the East Coast, are cited as potentially keeping a lid on January milk production.

SOUTH AMERICAN OVERVIEW: Contacts in South America report facing a growing amount of concerns over staffing, feed costs, milk prices, and packaging supplies. Some reports relay milk output is expected to grow if only slightly through Q1. Powder producers report slim availability is leading to increasing costs in some areas, while others report a potential stockpiling of powders as cheese production has slowed. Still, as powders and milkfat values increase across the global community, despite the apparent obstacles, there is some cause for bullish sentiment. Acid casein and whole milk powder producers, specifically, are reporting Q1 tightness and bullish price movements.

NATIONAL RETAIL REPORT (DMN): Conventional milk ads decreased by 26 percent, while organic milk ads grew by 10 percent this week. The number of ads for milk in gallon size containers decreased by 52 percent, and the weighted average advertised price decreased by $0.67 to $2.99. In contrast to this, ads for organic milk in gallon containers increased by 45 percent, while the weighted average advertised price fell to $5.19, down 1 cent from week 2. This week, the most advertised organic dairy item was milk in gallon size containers.

FEBRUARY ADVANCED CLASS PRICES (FMMO): Base Class I Price: The base Class I price for February 2022 is $21.64 per cwt, an increase of $1.93 per cwt when compared to January 2022. A Class I differential for each order's principle pricing point (county) is added to the base price to determine the Class I Price. Class II Price Information: For February 2022, the advanced Class IV skim milk pricing factor is $12.97 per cwt, the Class II skim milk price is $13.67 per cwt, and the Class II nonfat solids price is $1.5189 per pound. Product Price Averages: The two-weekproduct price averages for February 2022 are: butter $2.4454, nonfat dry milk $1.6240, cheese $1.8482, and dry whey $0.6863.

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DAIRY MARKET NEWS, JANUARY 17 - 21, 2022	-3-	VOLUME 89, REPORT 3
	CHEESE MARKETS
NORTHEAST		WHOLESALE SELLING PRICES: DELIVERED
	DOLLARS PER POUND(MIXED LOTS (1000-5000 POUNDS))

Milk is available for Northeastern Class III operations. Milk intakes for some cheesemaking facilities are at or near capacity. Plant managers are working to keep busy cheese production schedules throughout the region despite the challenges of staffing shortages, supply chain issues, and winter weather-related transportation delays. Cheese inventories are available for spot needs. Retail demand is sturdy as the end of the football season approaches. Food service orders are a little mixed. Sales from educational institutions are steadying. However, there are reportedly pockets of softening restaurant demand as dine-in traffic in some areas has wavered in recent weeks. On the CME Tuesday, both cheddar block and barrel prices dipped lower, but the block and barrel price spread remained invert- ed.

WHOLESALE SELLING PRICES: DELIVERED

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

Cheddar 40 pound Block	2.4550-2.7425
Muenster	2.4425-2.7925
Process American 5 pound Sliced	1.9900-2.4700
Swiss 10-14 pound Cuts	3.4550-5.7775

MIDWEST

Milk availability varies from one area to the next, similarly to last week. Plant managers running fully staffed operations say milk is available, but the discounted prices of $3 and $4 under are no longer being offered. Still, there are plants running lighter lines, as employ- ees, in the plants and in the front offices, are short due to COVID related absences. Cheese sales are slowing, according to some pro- ducers. They say market prices moving up around the $2 mark, although they have ebbed since, are the major factor in slowing orders. Barrel producers say inventories are tighter and customers have been active. Thus, barrel prices pushed above decreasing block prices on the CME on Friday. All said, market tones are lacking the bravado of prior weeks. Contacts say tones are uncertain.

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

Blue 5 pounds	2.6400-3.7075
Brick 5 pounds	2.3700-2.7950
Cheddar 40 pound Block	2.0925-2.4925
Monterey Jack 10 pounds	2.3450-2.5500
Mozzarella 5-6 pounds	2.1700-3.1150
Muenster 5 pounds	2.3700-2.7950
Process American 5 pound Loaf	1.9750-2.3350
Swiss 6-9 pound Cuts	2.9700-3.0875

WEST

In the West, retail demand for cheese is steady to lower. Food service demand for cheese is mixed; contacts note that rising COVID cases in the region have caused a decline in some sales. Food service moz- zarella sales are, reportedly, increasing as strong demand is present for pizza making. International demand for cheese is strong, with contacts noting increased interest from purchasers in Asian markets. Transportation issues, caused by a shortage of truck drivers and port congestion, are causing delays to load deliveries throughout the re- gion. Stakeholders say that labor shortages are also contributing to some delayed load deliveries. Spot inventories of cheese blocks are unchanged, while some contacts note that barrel inventories are tight- ening. Cheesemakers say that milk is available for production, but that delayed deliveries and labor shortages are causing some plant managers to run reduced production schedules.

Cheddar 10 pound Cuts	2.3300-2.5300
Cheddar 40 pound Block	2.0825-2.5725
Monterey Jack 10 pounds	2.3175-2.5925
Process American 5 pound Loaf	1.9925-2.2475
Swiss 6-9 pound Cuts	3.2625-3.6925

FOREIGN

Sales of Western European cheese are lower than before the Decem- ber holiday season, which is a typical annual pattern. Nevertheless, markets remain firm, and orders are still being cut by sellers. Sources say that Emmentaler and cheddar varieties are especially tight. Higher prices for new contracts are being enforced for Q1 2022. Already contracted buyers seeking to increase volumes are often disappoint- ed. Very strong demand from within the EU is complicating maintaining ideal export volumes.

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

VARIETY	:	NEW YORK	:	DOMESTIC
:	IMPORTED
Blue	:		:
:	2.6400-5.2300 :2.3125-3.8000*
Gorgonzola	:	3.6900-5.7400 :2.8200-3.5375*
Parmesan	:	-0-	:	3.7000-5.7900*
Romano	:	-0-	:	3.5025-5.6575*
Sardo Romano (Argentina)	:	2.8500-4.7800	:	-0-
Reggianito (Argentina)	:	3.2900-4.7800	:	-0-
Jarlsberg	:	-0-	:	-0-
Swiss	:	-0-	:	3.4900-3.8150
Swiss (Finland)	:	2.6700-2.9300	:	-0-

* = Price change.

COLD STORAGE

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

01/17/2022	:	BUTTER	:	CHEESE
:	37051	92115
01/01/2022	:	32878	:	82899
CHANGE	:	4173	:	9216
% CHANGE	:	13	:	11

Secondary Sourced Information:

This week, a cooperative export assistance program accepted requests for export assistance to sell 2.2 million pounds (988 metric tons) of American-type cheese. So far this year, the program has assisted member cooperatives with contracts to sell 4.9 million pounds of American-type cheeses.

Cheese production in Western Europe January - November 2021, 8.725 million MT, increased 1.3 percent over January - November 2020 according to CLAL data made available to USDA. Cheese ex- ports, 1.276 million MT, decreased 0.2 percent. The top export destinations and percent change January - November 2021 compared to the same period of 2020 are: United Kingdom, 391,545 MT, -12.35 percent; United States, 123,186 MT, +13.85 percent; Japan, 109,297 MT, -7.10 percent; Switzerland, 66,895 MT, 5.36 percent; and Ukraine, 47,832 MT, +12.55 percent.

DAIRY MARKET NEWS, JANUARY 17 - 21, 2022	-4-	VOLUME 89, REPORT 3
	FLUID MILK AND CREAM
EAST		WEST

Northeast milk production is level to higher. Bottling demand is up week over week. Class II sales are steady to increasing, and busy cheese production in the region is keeping Class III demand strong. Contacts report supply chain issues, short staffing, and inclement weather have impacted hauling and plant operations for some dairy processors. Mid-Atlantic milk output is unchanged. Class I sales are flat. Heavy mixed precipitation and ice from recent storms have contributed to some transportation interruptions across the Southeast. Farm level milk production is steady to increasing. Bottling sales are strong. Some handlers are sourcing supplemental milk supplies from other regions to help meet steady to stronger Class II and Class III demand. Milk output is level to increasing in Florida. Class I and Class III sales are up. Cream is more available this week as plant downtime has freed up some additional loads for spot markets. Steady demand is present from Class II cream-based processors. Some butter plants are ramping up production on strong demand. Reports of condensed skim availability vary from contact to contact; some say tightness persists, but others are finding looser spot supplies.

Northeastern U.S., F.O.B. Condensed Skim	1.58 - 1.63
Price Range - Class II; $/LB Solids:
Price Range - Class III; $/LB Solids:	1.34 - 1.39
Northeastern U.S., F.O.B. Cream	1.1500 - 1.3200
Multiples Range - All Classes:
Price Range - Class II; $/LB Butterfat:	3.2120 - 3.6868

MIDWEST

Milk production, following the winter storms last week and the current sub-zero to single-digit temperatures in the upper Midwest and Northern Plains areas, is expected to tighten up near term. Although some dairy farmers say the snowfall was minimal, cow comfort levels are expected to decline. Bottling orders continued to move higher in food service and retail channels. Some reports are that retail orders perked due to the cold temperatures, which prompted shoppers to stock up. Bottling plant management is dealing with the same employee/driver shortages that the entire industry is reeling with now. There were some cancelled orders last week due to the lack of sufficient staffing. Cheesemakers say milk discounts are not as steep as recent weeks, but there is still milk available. Some plants are full and not seeking spot milk, either because the heavier discounts are no longer available, or staffing tightness will not allow it. This week's $1.00 to $.50 discounts exhibit the change from one year to the next: the 2021 week three spot milk range was $8.50 to $4 under Class III. Cream is still accessible for busy butter churners in the region. While butter markets thrive, plant managers are taking on as much cream as they can while prices are still favorable. Favorably for butter producers, cream cheese manufacturers have slowed down some on orders after busier week one ordering. Windy and dry weather continue to burden winter wheat farmers in the Southern and Northern Plains regions. Winter Storm Izzy brought snow to some areas, while others got no more than a dusting that was gone the following day. Slight to less-than-sufficient soil moisture is being reported from parts in the northern to the southern tip of the region.

Milk production is trending higher in California. Contacts say that overall production is down year over year, as cold and rainy weather in parts of the state have negatively affected cow comfort. Some processors report unexpected down time due to transportation delays and staff shortages. Class I demand is steady, while contacts report increasing Class II demand. In Arizona, milk production is steady. Processors in the state are running busy schedules to work through available supplies of milk, despite some delays caused by a shortage of truck drivers. Class I demand is increasing. New Mexico milk production is steady to higher. Processors in the area note that some load deliveries are being delayed, due to staffing shortages. Class I demand is steady, while Class II demand is declining. Milk production is unchanged in the Pacific Northwest. Processors in the area say that COVID has caused some unplanned down time at processing facilities. Some plant managers are, reportedly, selling loads of milk to prevent dumping. Demand is unchanged across all Classes. In the mountain states of Idaho, Utah, and Colorado, milk production is steady. Supplies of milk are available to meet production needs, but some processors report that delayed deliveries are negatively affecting production schedules. Stakeholders say that demand is steady across all Classes. In the West, condensed skim contracts are unchanged. Demand for cream is present, and supplies are available to meet current production needs. Some stakeholders are, reportedly, sending loads of cream to the Midwest, where cream inventories are tighter. Contacts say that loads are facing delays due to a shortage of truck drivers and bad weather. Western cream multiples moved higher at the top of the range, while the bottom is unchanged.

Western U.S., F.O.B. Cream	1.0000 - 1.2800
Multiples Range - All Classes:

Price Range - Class III Milk; $/CWT; Spot Basis:	-1.00 - -0.50
Trade Activity: Slow
Midwestern U.S., F.O.B. Cream	1.2600 - 1.3300
Multiples Range - All Classes:
Price Range - Class II; $/LB Butterfat:	3.6309 - 3.7147
Multiples Range - Class II:	1.3000 - 1.3300