Western butter prices are steady to weak as increased butter in cold storage weighs on the market. Buyers are looking for discounts as an incentive to purchase more than immediate needs.

The retail price for a pound of butter is $2.53, a drop of 51 cents from two weeks ago. Shredded cheese, ice cream, regular and Greek yogurt prices rise.

Some butter manufacturers find their inventories are close to zero but some have substantial inventories. Extra milk for cheese is harder to obtain, say some cheesemakers.

Milk handling over the holiday weekend went along planned schedules with processing plants on active duty with auxiliary plants being brought into action. Cheese production levels across the country were mixed this week. Production in the Midwest remains strong as larger milk supplies and good component levels add to inventories.

Nonfat dry milk production remains heavy with producers holding inventories more confidently, according to the latest Dairy Market News by the USDA. Higher than anticipated volumes of milk are being directed to cheese plants across the nation. Despite increased inventories of cheese, manufacturers are reporting good sales and are mostly comfortable with the added production.
 

Cheese markets across the U.S. continue to look for a clear price direction. Milk production in the East and Midwest is increasing, and Western milk supplies are building as Arizona and New Mexico near peak production.

Aseptically packaged UHT organic milk is currently being exported mostly by national processors, but now some smaller state and regional organic cooperatives want to negotiate export deals for UHT organic milk to Asian countries. 

The USDA's AMS service reported this week that total organic milk products sales for November 2012 were 191 million pounds, an increase of 9% from November 2011.

Milk supplies are heaviest in the Northeast, but more manageable compared to the holiday period. Processing plants in the rest of the country are working on reduced schedules as year-end milk supplies are worked through and other fluid handlers and smaller processors have resumed normal intakes.

A combination of three factors: butter prices declining this week to levels last present during mid-July, cream offerings being heavy and expected to increase, and butterfat tests since July substantially above the last few years, all lead to one result - surplus cream