Cream markets are being called “OK”, but contacts are very concerned about the next few weeks. With the CME Group butter price collapsing as fast as it is, churns do not want to have any unsold butter on the floor. Higher class manufacturers are still taking good volumes of cream to finish their end-of-the-year product runs. That means that by late December churns will really be the only outlet. Multiples and overages are being adjusted lower to make the cream more competitive.

The situation is expected to get worse before the end of the year. Multiples range from 100-118 and vary depending on class usage and basing points. Some deals are being put together that will likely net the seller less than the market butter price equivalent. Much colder and wetter weather is moving into the Pacific Northwest. Snow will be common through all the passes and into low-lying areas. The moisture will be very welcome to the region.

Milk supplies in the region are being handled very efficiently and no problems are expected in handling milk over the end of the year holidays. Financial stress is a topic of conversation for many dairy producers. With heavier-than-average butter/powder production in the region, prices will be relatively lower than in some other parts of the country.

Lower grain prices are helping somewhat for those that did not lock in prices earlier. Nearby corn in Chicago closed at under $3 last month for the first time since October 2006. Soybean prices were below $8 for the first time since May 2007. Prices have rebounded slightly since then. Activity was light enough at the monthly heifer sale that a market could not be reported. Receipts were down more than 50 percent from last year.

Some winter weather is expected in Utah and Idaho, at least at the higher elevations. After a good early snowfall, conditions have been very dry. Milk seems to be generally balanced in the region with few problems anticipated over the end-of-the-year holidays.

Hay prices continue to weaken as dairies have less money to work with and growers reassess their inventory levels. Heifer prices at two sales in the region are holding relatively steady. The top of the two markets ranged from $1,950-2,020 with the average between $1,820-1,822.  PD