An increase in September milk output boosted production of cheese, butter and powdered milk, sending cheese and butter prices lower.
"The milk is there, and it has to be processed into something," said Alan Levitt, publisher of CME Daily Dairy Report. "If you're a co-op, you have to take the milk from your farmers."
Cheese production in September was up 4.3 percent from a year ago. Butter was up 16.7 percent, in part a factor of the 21.8 percent drop last year. Powder production was up 25.5 percent.
The good news is consumer purchases are also up, said Jerry Dryer, publisher of Dairy & Food Market Analyst. Consumer purchases of all milk and dairy products was up 4.6 percent in the most recent three month and up 3.2 percent year to date.
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