The U.S. Department of Agriculture announced the September Federal Order Class III benchmark milk price on Oct. 2 at $18.31 per hundredweight, up 71 cents from August, $2.22 above September 2018 and the highest it has been since November 2014.

The farmer price equates to $1.51 per gallon, up from $1.38 a year ago.

The nine-month Class III average for 2019 now stands at $16.11, up from $14.62 at this time a year ago and close to the $16.12 of 2017.

The September Class IV price is $16.35, down 39 cents from August and the lowest since May, but $1.54 above a year ago.

U.S. cheese prices have been on a roller-coaster. Cheddar blocks shot up to $2.2375 per pound on Sept. 16, highest price since October 2014, then plummeted, wavered some and closed the first Friday of October at $1.9925, 34.25 cents above a year ago. The barrels hit a high of $1.94 on Sept. 16 but closed Oct. 4 at $1.79, 42.25 cents above a year ago.

Tight milk supply in Midwest cheese-producing country has affected cheese output. Also, strong domestic demand has added to the pressure, resulting in higher milk prices.

Butter closed the week at $2.1850 per pound, up 3.75 cents, but 10.5 cents below a year ago.

There is plenty of butter available and the strong U.S. price has attracted imports. Cream is readily available in the West where much of the butter is produced. Butter inventories, while being drawn down seasonally, are higher than preferred, according to Dairy Market News.

FC Stone gives this warning: “The likelihood of seeing sub-$2.00 butter prices by the end of the fourth quarter is growing.”

Grade A nonfat dry milk closed Friday at $1.1450 per pound, highest cash price since March 2015, and 28.5 cents above a year ago.

Dry whey closed Friday at 32.75 cents per pound, 23.5 cents below a year ago, with a whopping 80 train cars sold on the week.

The whey market is heavily influenced by African swine fever, which has devastated the world’s largest hog herd nation, namely China. Whey is a vital feed nutrient for pigs and the U.S. supplies a fair amount of it. It’s also one of the imports that China has removed tariffs from in its trade spat with the U.S., as it attempts to rebuild its hog herd.

Meanwhile, finances on U.S. dairy farms continue to improve. A higher All Milk price and lower feed prices nudged the August milk-feed price ratio higher for the second month in a row. The latest Ag Prices report put the ratio at 2.26, up from 2.16 in July and 2.06 in August 2018.

The U.S. All-Milk price averaged $18.90 per hundredweight (cwt.), up 20 cents from July and $2.80 above August 2018.

The national average corn price averaged $3.93 per bushel, down 23 cents from July but 57 cents per bushel higher than August 2018. Soybeans averaged $8.22 per bushel, down 16 cents from July and 37 cents below a year ago. Alfalfa hay averaged $179 per ton, down $4 from July but $2 per ton above a year ago.

The August cull price for beef and dairy cows combined averaged $68.30 per hundredweight, up $1.30 from July and $5.30 above August 2018, but $3.30 below the 2011 base average of $71.60 per cwt.

The Northwest Dairy Association makes these price projections for the Class III price and Pacific Northwest blend price:

Month  Class   PNW

             III      Blend 

Sept.    $18.31  $17.45


Oct.      $18.45   $17.50

Nov.     $18.20   $17.70

Dec.     $17.50    $17.60

Jan.      $16.80    $17.10

Feb.     $16.50    $16.80

March   $16.50    $16.90

April     $16.70    $17.10

May      $16.80    $17.20

June     $17.00    $17.30

Lee Mielke, of Lynden, is editor of the Mielke Market Weekly. Whatcom County has about 85 dairy farms.