Within the past week, spot market prices for Cheddar cheese shot past $2 per pound on the Chicago Mercantile Exchange.
Those increases included five and four cents per pound, respectively, for Cheddar blocks and barrels on Tuesday of this week.
That price surge continued on Wednesday of this week when blocks and barrels posted respective per pound increases of 3.25 and four cents, putting the day's closing prices at $2.0825 and $2.04 per pound. Unlike on Tuesday of this week, when eight carloads of blocks were sold, the activity on Wednesday was confined to unfilled bids to buy two carloads of blocks and one of barrels.
The AA butter spot market price held at $1.94 per pound on Wednesday - an increase of 7.25 cents from a week earlier - with an unfilled bid to buy two carloads being the only activity. In a quiet non-fat dry milk spot market, the prices stood at $1.68 per pound for Grade A and $1.6350 for Grade Extra.
Class III milk futures flirted with $21 per hundred prices for October and November on Wednesday before pulling back a bit. In their last week of trading, the September futures stood at $18.94 per hundred while all months in 2013 were in the $18s and $19s per hundred.
A strengthening of milk prices is also evident in the dry whey futures. On Wednesday of this week, they were trading at 62-65 cents per pound for all months from October through May 2013 and were above 50 cents for all remaining months of 2013.
In the basic pricing formula for Class III milk, the dry whey price is worth six cents per hundred for every cent of the dry whey price or a current value of more than $3.70 per hundred for milk.
The Class I fluid milk national base price for October is $18.88 per hundred. This is an increase of $1.29 per hundred from the September price.
On Monday of this week, Cooperatives Working Together announced the acceptance of a total of 13 bids from Land O'Lakes, Darigold, Dairy Farmers of America, and the Maryland and Virginia Milk Producers for financial assistance on the export of 5.88 million pounds of Cheddar and Monterey Jack cheese and 687,842 pounds of butter to customers in Asia, Central America, Europe and the Middle East. Deliveries are scheduled from September through March 2013.