DAIRY MARKET PRICES
Report for November
U.S. Cheddar cheese prices hit a 10-month high in October, while butter prices softened but remained well above $2 a pound. Nonfat dry milk and dry whey prices are showing extended weakness due to deteriorating prices in world markets, which are overhung by excessive stocks of skim milk powder in the European Union (EU). Against this backdrop of prices, there are some recent signs that overall supply has been gradually heading back toward balance with demand in U.S. domestic dairy markets. These include: (1) year-over-year growth in milk production well below 2 percent, (2) slower growth in cheese production, (3) further reduction in cheese stocks and (4) continued growth in cheese exports.