DAIRY MARKET NEWS WEEK OF NOVEMBER 20-24, PDF Free Download

DAIRY MARKET NEWS WEEK OF NOVEMBER 20-24, 2017 VOLUME 84, REPORT 47 CME GROUP CASH MARKETS (11/22) BUTTER: Grade AA closed at $2.2225. The weekly average for Grade AA is $2.2150 (-.0340). CHEESE: Barrels closed at $1.6750 and 40# blocks at $1.6100. The weekly average for barrels is $1.6633 (-.0137) and blocks, $1.6050 (-.0825). NONFAT DRY MILK: Grade A closed at $.7125. The weekly average for Grade A is $.7108 (-.0277). BUTTER HIGHLIGHTS: Cream for butter production is readily accessible. Butter makers are actively producing butter. However, some manufacturers have slowed down churning and other have halted butter production until after the holiday season. Although holiday demand is drawing down inventories, supplies remain sufficient. Bulk butter prices range from 3 cents under to 8 cents over the CME average. The market undertone is mixed. Some buyers/ sellers anticipate butter prices will decrease further, although other contacts report that current market prices are remaining healthy and well over last year s averages. Wednesday s CME Group cash trading saw Grade AA butter close at $2.2225, down $0.0350 from last Wednesday. CHEESE HIGHLIGHTS: Discounted milk into cheese plants has spurred cheese production this holiday week. Plant managers are facing the challenge of allotting production time off, while taking on bargain spot milk loads. Demand is generally steady to slow across all regions. Western contacts report that export interest has picked up. Midwest cheese contacts report that cheese inventories are balanced to long. Some cheesemakers are reporting that fluctuating market prices are giving buyers pause. CME block prices are currently below those of barrel prices. Contacts generally view this as a market destabilizer. In CME Group trading Wednesday, barrels closed at $1.6750, down $0.0250 from last Wednesday. Blocks closed at $1.6100, down $0.1050 from last Wednesday. Product Highlights/CME/DMN at a Glance 1 Weekly CME Activity/Butter Markets/NDPSR 2 Cheese Markets 3 Fluid Milk and Cream 4 Nonfat Dry Milk/Dry Buttermilk/Dry Whole Milk 5 DAIRY MARKET NEWS AT A GLANCE TABLE OF CONTENTS Dry Whey/WPC 34%/Lactose/Casein 6 US Dairy Cow Slaughter/Class Milk s 7 International Dairy Market News 8 CME Dairy Futures 9 October Milk Production 10 FLUID MILK: Farm milk production is steady to increasing in the nation. In the Northeast and Pacific Northwest, milk yield is steady. In the Southeast, Midwest, and New Mexico, production is up. In the Northeast, milk supply is more available for processing needs. Class I sales are mixed across the country. Class I intakes are increasing in the East, steady in the Midwest, and steady to decreasing in the West. Due to processing plants shutting down for the holidays, cream supply is steady to more available in the East. s for cream in the Midwest fell. However, the fall in prices was less than anticipated. Due to ample amounts of cream available in the West, manufacturers are making more butter. Cream multiples for all classes are 1.18-1.35 in the East, 1.21-1.32 in the Midwest, and 1.00-1.27 in the West. DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices decreased this week throughout the regions as the market continues to show signs of weakness. Within this holiday-shortened period, spot transactions dropped a notch, as NDM buyers look to cover only urgent needs. The market tone is weak. High heat NDM prices are lower. Spot activity is steady to slow. The undertone for high heat NDM is weak to balanced. Dry buttermilk prices are steady to decreased. Interest is limited to good as the bakery sector is active as processors make more of the holiday foods. The tone is steady to weak. Dry whole milk prices are mixed. Demands from the confectionary and bakery sectors are active. The market feels weak. Dry whey prices are steady to lower. The demand is lackluster as many end users are holding off on making their purchases. The market tone is steady to uncertain. Animal feed whey prices decreased. Some end users are planning to wait until end of year clearances before entering the spot market. Whey protein concentrate WPC34% prices decreased. The demand for specific WPC34% is solid, although WPC34% that is interchangeable is tough to sell. Lactose prices are unchanged. The demand is weak as some buyers are content to wait for CONTINUED ON PAGE 1A December Federal Milk Order Advanced Class s 11 October Cold Storage 12 Dairy Graphs G1 Dairy Market News Retail Report Dairy Market News Contacts CME GROUP CASH TRADING COMMODITY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY :: WEEKLY :: WEEKLY NOV 20 NOV 21 NOV 22 NOV 23 NOV 24 :: CHANGE* :: AVERAGE# CHEESE BARRELS $1.6400 (+.0125) $1.6750 (+.0350) $1.6750 (N.C.) CME CLOSED CME CLOSED :: :: $1.6633 :: (+.0475) :: (-.0137) 40# BLOCKS $1.6000 $1.6050 $1.6100 :: :: $1.6050 (-.0200) (+.0050) (+.0050) :: (-.0100) :: (-.0825) NONFAT DRY MILK GRADE A $.7150 $.7050 $.7125 :: :: $.7108 (-.0100) (-.0100) (+.0075) :: (-.0125) :: (-.0277) BUTTER GRADE AA $2.2100 (-.0050) $2.2125 (+.0025) $2.2225 (+.0100) :: :: $2.2150 :: (+.0075) :: (-.0340) CHEESE: carload = 40,000 lbs., BUTTER: carlot = 40,000-43,000 lbs. *Sum of daily changes. # Weekly averages are simple averages of the daily closing prices for the calendar week. Computed by Dairy Market News for international purposes. This data is available on the Internet at WWW.AMS.USDA.GOV/MARKET-NEWS/DAIRY

WEEK OF NOVEMBER 20-24, 2017 DAIRY MARKET NEWS VOLUME 84, REPORT 47 CONTINUED FROM PAGE 1 DAIRY MARKET NEWS AT A GLANCE lower prices. Rennet and acid casein prices decreased. The casein market reflects worry about whether there will be adequate demand for supplies. INTERNATIONAL DAIRY MARKET NEWS (DMN): WESTERN OVERVIEW: No new European Commission dairy policies have recently finalized. However, ongoing background discussions between the European Commission and various EU dairy involved parties continue to circle past the notion that some supply side action may be needed to address weaker dairy product prices, because they are expected to result in lower farm milk pay prices. The EU continues efforts to maintain and expand dairy trade agreements with many other countries. This week talks between the EU and Chile began, focusing on updating 2003 dairy trade provisions. The process will be similar to trade talks with Mexico, which began in June 2016 and are now in an advanced stage moving closer to finalization. EASTERN OVERVIEW: January-September 2017 milk production in Poland increased 4.6 percent from the same period last year, according to CLAL. Farmgate milk prices in Poland January- September increased 26.6 percent to 31.35 euros/100 kg compared with year ago. AUSTRALIA: Resolution of the uncertainty as to the fate of dairy processing plants throughout Australia, now for sale following the wellknown fate of a large dairy cooperative, moves closer to completion. The sale is now awaiting regulatory review. The bidder from North America has stated having no intention of splitting the plants for resale if it acquires the assets. In fact, the bidder states that it intends to increase production at a number of the plants and pay industry leading farmgate prices to acquire milk to do that. Meanwhile a portfolio of four large dairy farms in Tasmania, which supplies milk to the cooperative selling off its plants, is now up for sale. The four farms represent about 3,500 cows. NEW ZEALAND: October 2017 New Zealand milk production was 3.1 million MT, up from 2.5 million MT in September, according to DCANZ. During October 2016, milk production was 3.0 million MT. October milk solids, 254.6 million kg, are up from 207.4 million kg in September. During October 2016, milk solids were 247.4 million kg. Improved New Zealand weather conditions during the second half of October are credited with the uptick in milk production. With October typically the peak month for milk production, the production increase is viewed as potentially making an overall seasonal increase over the last season far more likely to occur. At the November 21 GDT event #200, all contracts prices ranged from unchanged to 12.6 percent lower from the prior event across categories. The all contracts price averages (US$ per MT) and percent changes from the previous averages are: anhydrous milk fat, $6,887, 0.0 percent; butter, $5,144, -5.9 percent; buttermilk powder, n.a.; cheddar cheese, $3,831, -4.2 percent; lactose, n.a.; rennet casein, $4,644, -12.6 percent; skim milk powder, $1,701, -6.5 percent; and whole milk powder, $2,778, -2.7 percent. SOUTH AMERICA OVERVIEW: Over the past few weeks, the Mercosur bloc and the European Union (EU) have been developing rounds of negotiations for the eventual signing of a trade agreement between the two blocs. Before the signing of the agreement, the EU requests the exclusivity of some geographical indications (GIs) for cheese. As a result, yesterday, the Uruguayan government opened a 30- day public consultation in order to gather inputs from the public. The main purpose of this consultation is to avoid any possible conflicts between the European GIs and the cheese names used in Uruguay. Meanwhile, farm milk production in Argentina and Uruguay, is steady to slightly down, after reaching its seasonal peak. Milk/cream volumes are ample to cover most processing inquiries. The retail/food service demands for bottled milk, cheese, and butter are hearty. In Brazil, cows milk production continues growing as the seasonal peak approaches, which generally occurs through December and January. Milk intakes are more than sufficient to cover most manufacturing needs. Therefore, the dependence on imports of dairy products from neighboring countries continues to decline. The UHT milk market is showing signs of weakness as prices are falling while inventories continue growing. Meanwhile, the cheese and milk powder markets are steady with no major changes during the past two weeks. NATIONAL RETAIL REPORT (DMN): With Thanksgiving this week, dairy ad numbers for related dairy products remain high and prices are up from last week, for conventional 8 oz. cream cheese ($1.78, up 22 cents); 1 pound butter ($3.08, up 1 cent); and 16 oz. sour cream ($1.80, up 3 cents). With 1 pound organic butter having a price of $5.49 (up 65 cents from last week), the organic butter price premium over conventional is $2.41. Organic cream cheese, 8 oz., has a price of $2.79 (up 40 cents from last week), yielding an organic price premium over conventional of $1.01. The U.S. advertised price for 8 ounce conventional cheese blocks averaged $2.16 (down 14 cents from last week), while organic 8 ounce cheese blocks average $3.99 ( even with last week), an organic premium of $1.83. Advertised prices for 8 ounce conventional cheese shreds averaged $2.17 (down 4 cents from last week), while there are no ads for organic 8 ounce cheese shreds. The average sale price for conventional 4-6 ounce Greek yogurt is $.97 (down 1 cent from last week), while regular yogurt is $.49 (down 2 cents from last5 week). There are no ads for any pack size of organic yogurt. There are no ads for conventional half gallon milk this week. The weighted average price for organic half gallon milk is $4.39 (up 46 cents from last week). There are more ads for organic milk than conventional milk. OCTOBER MILK PRODUCTION (NASS): Milk production in the 23 major States during October totaled 16.7 billion pounds, up 1.5 percent from October 2016. September revised production, at 16.2 billion pounds, was up 1.1 percent from September 2016. The September revision represented a decrease of 9 million pounds or 0.1 percent from last month's preliminary production estimate. Production per cow in the 23 major States averaged 1,917 pounds for October, 13 pounds above October 2016. This is the highest production per cow for the month of October since the 23 State series began in 2003. The number of milk cows on farms in the 23 major States was 8.74 million head, 67,000 head more than October 2016, but 1,000 head less than September 2017. DECEMBER FEDERAL MILK ORDER ADVANCE CLASS PRICES: Under the Federal milk order pricing system, the base Class I price for December 2017 is $16.88 per cwt. This price is derived from the advanced Class III skim milk pricing factor of $8.30 and the advanced butterfat pricing factor of $2.5335. A Class I differential for each order's principle pricing point (county) is added to the base price to determine the Class I. The base Class I price increased $0.47 per cwt when compared to the previous month of November 2017. For selected consumer products, the price changes are: whole milk (3.25% milk fat), $0.51 per cwt, $0.044 per gallon; reduced fat milk (2%), $0.70 per cwt, $0.060 per gallon; fat-free (skim milk), $0.95 per cwt, $0.082 per gallon. The advanced Class IV skim milk pricing factor is $5.24. Thus, the Class II skim milk price for December 2017 is $5.94 per cwt, and the Class II nonfat solids price is $0.6600. The two-week product price averages for December 2017 are: butter $2.2636, nonfat dry milk $0.7563, cheese $1.7641 and dry whey $0.3561. OCTOBER COLD STORAGE (NASS): COLD STORAGE (NASS): On October 31, U.S. cold storage holdings of butter totaled 219.8 million pounds, down 14 percent from the previous month and down 4 percent from October 2016. Natural American cheese holdings total 739.3 million pounds, 5 percent down from the previous month but unchanged from October 2016. Total natural cheese stocks were 1.267 billion pounds, down 3 percent from last month but up 4 percent from October 2016.

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-2- VOLUME 84, REPORT 47 MONDAY, NOVEMBER 20, 2017 CHEESE -- SALES: 4 CARS BARRELS: 2 @ $1.6375, 2 @ $1.6400; 1 CAR 40# BLOCKS @ $1.6000; LAST BID UNFILLED: 5 CARS BARRELS: 1 @ $1.5900, 2 @ $1.6375, 1 @ $1.5800, 1 @ $1.6400; LAST OFFER UNCOVERED: 1 CAR 40# BLOCKS @ $1.6100 NONFAT DRY MILK -- SALES: NONE; LAST BID UNFILLED: 3 CARS GRADE A: 1 @ $0.6950, 2 @ $0.6900; LAST OFFER UNCOVERED: 4 CARS GRADE A: 1 @ $0.7300, 1 @ $0.7150, 1 @ $0.7200, 1 @ $0.7225 BUTTER -- SALES: 2 CARS GRADE AA: 1 @ $2.2125, 1 @ $2.2100; LAST BID UNFILLED: 7 CARS GRADE AA: 1 @ $2.1900, 1 @ $2.1700, 1 @ $2.1800, 1 @ $2.1900, 1 @ $2.1975, 1 @ $2.2000, 1 @ $2.2025; LAST OFFER UNCOVERED: 2 CARS GRADE AA: 1 @ $2.2275, 1 @ $2.2175 TUESDAY, NOVEMBER 21, 2017 CHEESE -- SALES: 1 CAR BARRELS @ $1.6600; 6 CARS 40# BLOCKS: 4 @ $1.5825, 1 @ $1.5900, 1 @ $1.6000; LAST BID UNFILLED: 5 CARS BARRELS: 1 @ $1.6000, 1 @ $1.6400, 1 @ $1.5900, 1 @ $1.6400, 1 @ $1.6750; 1 CAR 40# BLOCKS @ $1.6050; LAST OFFER UNCOVERED: 1 CAR BARRELS @ $1.6800; 1 CAR 40# BLOCKS @ $1.6100 NONFAT DRY MILK -- SALES: 1 CAR GRADE A @ $0.7050; LAST BID UNFILLED: 2 CARS GRADE A: 1 @ $0.6925, 1 @ $0.6900; LAST OFFER UNCOVERED: NONE BUTTER -- SALES: 18 CARS GRADE AA: 6 @ $2.2000, 2 @ $2.2025, 2 @ $2.2075, 4 @ $2.2050, 3 @ $2.2100, 1 @ $2.2125; LAST BID UNFILLED: 6 CARS GRADE AA: 1 @ $2.1900, 1 @ $2.2025, 1 @ $2.1600, 1 @ $2.2000, 1 @ $2.2075, 1 @ $2.2100; LAST OFFER UNCOVERED: 8 CARS GRADE AA: 6 @ $2.5000, 1 @ $2.2900, 1 @ $2.2475 WEDNESDAY, NOVEMBER 22, 2017 CHEESE -- SALES: 1 CAR 40# BLOCKS @ $1.6100; LAST BID UNFILLED: 1 CAR BARRELS @ $1.6750; 1 CAR 40# BLOCKS @ $1.6050; LAST OFFER UNCOVERED: 1 CAR 40# BLOCKS @ $1.6200 NONFAT DRY MILK -- SALES: 1 CAR GRADE A @ $0.7125; LAST BID UNFILLED: 5 CARS GRADE A: 1 @ $0.7025, 1 @ $0.7050, 1 @ $0.6700, 1 @ $0.6950, 1 @ $0.6800; LAST OFFER UNCOVERED: 2 CARS GRADE A: 1 @ $0.7300, 1 @ $0.7200 BUTTER -- SALES: 2 CARS GRADE AA: 1 @ $2.2150, 1 @ $2.2225; LAST BID UNFILLED: 8 CARS GRADE AA: 1 @ $2.1800, 1 @ $2.1700, 1 @ $2.1600, 1 @ $2.1900, 1 @ $2.2000, 1 @ $2.1900, 1 @ $2.2175, 1 @ $2.2200; LAST OFFER UNCOVERED: 8 CARS GRADE AA: 1 @ $2.2600, 1 @ $2.2475, 1 @ $2.2350, 5 @ $2.2800 THURSDAY, NOVEMBER 23, 2017 CME CLOSED FRIDAY NOVEMBER 24, 2017 CME CLOSED NORTHEAST Butter production is active. Cream supplies are heavy into butter plants as Class II processors halt production for a holiday vacation. With the additional churning, butter inventories are likely to expand. A few plant managers anticipate surpluses that challenge their yearend inventory liquidation goals. Domestic butter demand continues to be solid. Export sales are light to fair. Some butter makers are inclined to run 82 percent butter in lieu of 80 percent for offshore customers. The current bulk butter prices for domestic sales are reported 5-8 cents over the market of the CME Group, with various time frames and averages used. Monday s CME Group cash trading saw Grade AA butter close at $2.2100, down 4 cents from a week ago. According to the DMN National Retail Report-Dairy, November 17-23, 2017, the Northeast weighted average retail price for 1-pound butter was $3.22, 15 cents higher than the national price, but down 49 cents from last week s regional price. Retail butter markets reported prices ranging $2.29-$4.99 in the Northeast. The surveyed average price in the Southeast is $3.16, 9 cents higher CENTRAL Central region butter makers report active production schedules this week, as cream is readily accessible. Some multiples into Class IV production were reported as low as 1.13 f.o.b. Cream is finding its way into Midwestern butter plants from regions across the country. In some cases, butter producers are selling cream back onto the spot market in lieu of churning. Butter sales remain strong late into the busy season. The butter market tone is holding somewhat steady. Some contacts suggest that although the November sales season has WEEK ENDING November 18, 2017 NATIONAL DAIRY PRODUCTS SALES REPORT U.S. AVERAGES AND TOTAL POUNDS BUTTER CHEESE 40# BLOCKS CHEESE BARRELS 38% MOISTURE 2.2479 2,930,099 BUTTER MARKETS 1.7375 11,021,386 invigorated the market for the past two years, current market prices remain healthy and well over last year s averages. Bulk butter prices ranged from 3 cents under to 7 cents over the CME average. DMN National Retail Report-Dairy for November 17-23 noted the national weighted average advertised price for a 1 pound package of butter is $3.07, $0.10 below one week ago, but $0.50 higher than one year ago. The weighted average regional prices in the Midwest and South Central were $2.87 and $2.82, respectively. Monday at the CME Group, Grade AA butter closed at $2.2100, down $0.0400 from last Monday. WEST In the West, processors have enough cream for butter churning. Some manufacturers report that they are in their last weeks of strong butter fabrication for the rest of 2017, and then they will slow down production. Some others have stopped making butter until after the holidays. Another group is actively producing butter. Although the requests for the holiday are solid and drawing down butter inventories, supplies remain plentiful. Retail stores have also increased their butter promotions. In the international market, competition between the EU and the USA for market share is increasing. Back to the USA, due to some manufacturing facilities closing for the Thanksgiving holiday, cream supplies are expected to increase. This week, bulk butter is priced at 2 cents to 6 cents above the market, based on the CME Group with various periods and averages used. The DMN National Retail Report Dairy for the week of November 17-23 found that the U.S. weighted average advertised price of 1 pound butter is $3.07 down $.10 from last week. The U.S. weighted average price was $2.57 one year ago. In the Southwest, 1.7570 11,743,544 Further data and revisions may be found on the internet at: http://www.ams.usda.gov/rules-regulations/mmr/dmr CONTINUED ON PAGE 2A DRY WHEY 0.3534 5,722,891 NDM 0.7549 18,177,489

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-2A- VOLUME 84, REPORT 47 CONTINUED FROM PAGE 2 with a price range of $2.50.-$3.99. The weighted average price in the Northwest is $2.87, with a price range of $2.50.-$3.50. The Grade AA butter price at the CME Group on Monday closed at $2.2100, down $.0400 from a week ago.

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-3- VOLUME 84, REPORT 47 NORTHEAST Milk production in the Northeast is steady. Bottling plants are taking in lower milk volumes this week as educational institutions are shutting down for the holiday. With milk more available, balancing operations are taking in steady to higher volumes. Cheese production is mixed this week. Some cheese plants are running full schedules. However, other plants are closing for Thanksgiving. Cheese inventories are steady to coming back into balance. The demand is stable as consumers are stocking up for holiday needs. Northeast Process cheese decreased $0.0475, but wholesale cheddar and Muenster increased $0.0175. The Grade A Swiss price is unchanged. At Monday s CME Group trading, daily cash prices saw barrels closed at $1.6400, down $0.0600 from last Monday and blocks closed at $1.6000, down $0.1125 from last Monday. This week, a cooperative export assistance program accepted 17 requests for export assistance to sell 3.479 million pounds (1,578 metric tons) of cheese. The DMN National Retail Report-Dairy, for November 17-23, 2017, noted the U.S. weighted average advertised price for 8 ounce cheese block was $2.30, 18 cents below the previous week, but 15 cents higher than last year. The U.S. weighted average advertised price of 8 ounce cheese shreds was $2.21, 18 cents less than last week and 3 cents below a year ago. Northeast region s weighted average advertised price for 8 ounce cheese blocks was $2.37, 7 cents above the U.S. average, with a regional price range of $1.77-$3.50. The Southeast region s average price for 8 oz. cheese blocks was $2.41, 11 cents above the average U.S. price, with a regional price range of $1.67-$2.99. The Northeast average price for 8 oz. cheese shreds was $2.41, 20 cents above the U.S. average price, with a regional price range of $1.99-$3.00. In the Southeast, the average price for 8 oz. shreds was $1.96, 25 cents below the U.S. average, with prices ranging $1.67-$2.50. WHOLESALE SELLING PRICES: DELIVERED, DOLLARS PER POUND (1000-5000 POUNDS MIXED LOTS) Cheddar 40# Block : 2.1450-2.4300 Process 5# Sliced : 1.8150-2.2950 Muenster : 2.1300-2.4800 Grade A Swiss Cuts 10-14# : 3.2875-3.6100 MIDWEST CHEESE CHEESE MARKETS WISCONSIN WHOLESALE SELLING PRICES: DELIVERED, DOLLARS PER POUND (1000-5000 POUNDS MIXED LOTS) Process American 5# Loaf : 1.7700-2.1300 Brick And/Or Muenster 5# : 2.0525-2.4775 Cheddar 40# Block : 1.7800-2.1750 Monterey Jack 10# : 2.0275-2.2325 Blue 5# : 2.3200-3.3075 Mozzarella 5-6# (Low Moisture, Part Skim) : 1.8525-2.7925 Grade A Swiss Cuts 6-9# : 2.8050-2.9225 WEST CHEESE Western cheese makers report steady production and plenty of milk available for processing. Demand is stable, but not as robust as previous years. Industry contacts say domestic demand for 40 pound blocks is strong, with demand for barrels and 640s being a little lighter. However, some manufacturers say a few end users have their winter holiday needs filled and are not eager to take shipments within the winter festivities, nor do they want to add to inventories at year end. As a result, some contacts expect cheese sales to slow somewhat until buyers get through the holidays and can reevaluate their stock positions. On a positive note, as prices have eased on market exchanges, interest from foreign buyers has picked up. Exports may play a critical role in maintaining comfortable cheese stocks entering into 2018. The DMN National Retail Report-Dairy for the week of November 17-23 shows the U.S. weighted average advertised retail price for an 8 ounce pack of natural shredded cheese is $2.21, down $.18 from last week. Packs average $2.67 in the Southwest and $2.83 in the Northwest. One year ago, the national price was $2.24. For 8 ounce blocks, the U.S. price is $2.30, down $.18 from last week. Blocks average $2.43 in the Southwest and $1.99 in the Northwest. One year ago, the national price was $2.15. In the West, wholesale prices were down $.0475 for process, but up $.0175 for cheddar block, cuts, and Monterey Jack. Swiss cut wholesale prices are unchanged from last week. This week, a cooperative export assistance program accepted requests for export assistance on contracts to sell 3.48 million pounds (1,578 metric tons) of cheese. So far this year, the program has assisted member cooperatives who have contracts to sell 63.97 million pounds of American-type cheeses in export markets. In CME Group trading Monday, barrels closed at $1.6400, down $.0600 from a week ago and blocks closed at $1.6000, down $.1125. Cheesemakers in the Midwest are receiving spot milk offers early in the holiday week and expect them to continue apace through Wednesday. Spot milk prices range from flat market to $5 under Class. Cheese plant managers are facing the challenge of taking on discounted holiday milk loads, while attempting to schedule skeleton crews to work over the holiday. Cheese inventories vary, but generally cheese stocks are fairly long. Overall, cheese orders have been steady to slow. Some contacts suggest buyers are waiting for steadying market prices, which have slipped of late. Currently, blocks are below barrels, which strays from what many contacts consider to be a stable market. The DMN National Retail Report-Dairy shows that November 17-23 Midwest ads for 8 ounce shred cheese have a weighted average advertised price of $1.96, 25 cents below the national average. Midwest prices range from $1.49-$2.50. One year ago, the national price was $2.24. For 8 ounce blocks, the Midwest average price is $1.95, 35 cents below the national average price. Midwest ads are priced from $1.49-$2.50. Last year, the national price was $2.15. In CME Group trading Monday, barrels closed at $1.6400, down $.0600 from last Monday and blocks closed at $1.6000, down $.1125 from last Monday. Midwestern wholesale prices are unchanged for Swiss cuts, down $.0475 for process, but up $.0175 for all other types. WHOLESALE SELLING PRICES: DELIVERED, DOLLARS PER POUND (1000-5000 POUNDS MIXED LOTS) Process 5# Loaf : 1.7575-2.0150 Cheddar 40# Block : 1.8125-2.2575 Cheddar 10# Cuts : 1.9925-2.2125 Monterey Jack 10# : 2.0025-2.1625 Grade A Swiss Cuts 6-9# : 2.8650-3.2950 FOREIGN TYPE CHEESE In September, milk production has grown by an average of 3.7% in the European Union (EU). During the same time, cheese production increased. In September, cheese exports in the EU were up by 5 percent compared to last year at the same period; however, imports decreased by 21 percent. In Germany, cheese demand is steady at seasonal levels. Supplies are sufficient to meet end users/buyers' needs. s in the spot market are uneven, and the price trend remains weaker. In the U.S., the prices for wholesale blue, gorgonzola, parmesan Italy, and Romano increased by $0.0175; all other prices are steady compared to last week. CONTINUED ON PAGE 3A

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-3A- VOLUME 84, REPORT 47 CONTINUED FROM PAGE 3 CHEESE MARKETS WHOLESALE SELLING PRICES: FOB DISTRIBUTORS DOCK DOLLARS PER POUND (1000-5000 POUNDS, MIXED LOTS) : NEW YORK VARIETY : IMPORTED : DOMESTIC : : Blue : 2.6400-5.2300 : 2.1975-3.6850* Gorgonzola : 3.6900-5.7400 : 2.7050-3.4225* Parmesan (Italy) : -0- : 3.5875-5.6775* Romano (Cows Milk) : -0- : 3.3875-5.5375* Sardo Romano (Argentine) : 2.8500-4.7800 : -0- Reggianito (Argentine) : 3.2900-4.7800 : -0- Jarlsberg-(Brand) : 2.9500-6.4500 : -0- Swiss Cuts Switzerland : -0- : 3.3250-3.6475 Swiss Cuts Finnish : 2.6700-2.9300 : -0- = change. COLD STORAGE WEEKLY COLD STORAGE HOLDINGS - SELECTED STORAGE CENTERS IN THOUSAND POUNDS - INCLUDING GOVERNMENT STOCKS BUTTER : CHEESE : 11/20/17 13,827 : 94,993 11/01/17 19,182 : 94,908 CHANGE -5,355 : 85 % CHANGE -28 : 0

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-4- VOLUME 84, REPORT 47 EAST FLUID MILK AND CREAM MIDWEST SPOT SHIPMENTS OF GRADE A MILK INTO OR OUT OF FLORIDA & SOUTHEASTERN STATES Milk production in the Northeast is steady. Bottling facilities are taking in steady to lower milk volumes this week, as schools are closed for Thanksgiving. Milk availability has increased for manufacturing needs. Mid-Atlantic milk production is steady to increasing in some areas. Manufacturers who are operating through the holiday are clearing steady to higher milk volumes. Milk production in the Southeast is slightly increasing. Milk is clearing into a few balancing operations. Some market participants report not taking in any extra milk from other regions. Class I sales are up throughout the East. Florida s milk shipments are importing around 20 loads this week. Cream multiples this week range 1.18-1.35. Cream availability is currently steady to more available as a number of operations are shut down for the holiday. Condensed skim is available for Class II and Class IV drying requests as some balancing operations are closed, and Class I facilities are clearing decreased milk volumes. According to the DMN National Retail Report-Dairy, for the period of November 17-23, 2017, the U.S. weighted average advertised price for half gallon pack size milk was $2.46, up 85 cents compared to last week and up 13 cents from last year. In the Northeast, the weighted average price for the gallon pack size was $2.99, no change in price from the previous week. MILK PRODUCTION: According to NASS, milk production in the 23 major states during October 2017 totaled 16.7 billion pounds, up 1.5% from one year ago. Eastern states milk production are as follows: October 2017 Milk Production, (USDA-NASS) (Million Lb.) % Change From 1 Year Ago Florida 178 + 0.6 New York 1,239-0.1 Pennsylvania 898 + 0.7 Vermont 226 - Virginia 144 + 3.6 THIS WEEK LAST WEEK LAST YEAR IN OUT IN OUT IN OUT FLORIDA 20 0 40 0 30 0 SOUTHEAST STATES 0 0 0 0 0 0 SPOT PRICES OF CLASS II CREAM, DOLLARS PER LB. BUTTERFAT: F.O.B. producing plants: Northeast - 2.6538-3.0362 F.O.B. producing plants: Upper Midwest - 2.7213-2.9687 PRICES OF CONDENSED SKIM, DOLLARS PER LB. SOLIDS, F.O.B. PRODUCING PLANTS: Northeast - Class II - includes monthly formula prices -.65-.85 Northeast - Class III - spot prices -.55-1.00 NOTE: Due to evolving market conditions, collection and publication of the table entitled Spot Shipments of Grade A Milk Into or Out of Florida & Southeastern States will be terminated. The last Dairy Market News report to carry the table will be Report 52 of 2017, to be released on December 29, 2017. Questions and comments can be directed to: Janet.Linder@ams.usda.gov, (608)422-8588. Fluid milk output continues to grow. Upper Midwest contacts suggest that cow comfort levels are at their zenith, with relatively moderate temperatures through this point of the fall season. Along with increasing volumes, contacts continue to relay that milk is component rich. Bottling orders are steady. Contacts suggest the days immediately following Thanksgiving will bring extra workloads in Class I plants, as they backfill retail outlets and prepare for school orders. Reported Thanksgiving week cream prices declined, although not to the extent that some contacts were expecting. Cream multiples ranged from 1.21 to 1.32. The DMN National Retail Report-Dairy for November 17-23 noted the national weighted average advertised price for one gallon of milk was $3.06, up 12 cents from last week and 45 cents higher than a year ago. The weighted average regional prices in the Midwest and South Central were $2.98 and $3.24, respectively. The NASS Milk Production report noted October 2017 milk production in the 23 selected states was 16.74 billion pounds, 1.5 percent above a year ago. Milk cows in the 23 selected states totaled 8.7 million head, 67,000 head more than a year ago. The following table shows Central states included in the report and the monthly milk production and changes compared to a year ago: October 2017 Milk Production, (USDA-NASS) (Million Lb.) % Change From 1 Year Ago Illinois 156 + 3.3 Indiana 357 + 3.2 Iowa 437 + 4.0 Kansas 296 + 4.6 Michigan 933 + 3.3 Minnesota 816 + 2.9 Ohio 470 + 2.2 South Dakota 223 + 3.7 Texas 973 + 5.3 Wisconsin 2,548 + 2.3 WEST In California, due to the holiday, farm milk intakes into manufacturing plants are increasing. Most schools are closing from Thanksgiving day up to the end of the week, as so, their intakes are lower. The retail sector intakes are up as they fill out their last minute orders before the holiday. This week, farm milk production is steady to up. Processing plants are working at or near full processing capacities. According to California Department of Food and Agriculture, October 2017 pool receipts of milk in the state total 3.07 billion pounds. This is 2.5 percent lower compared to the same month a year ago. From January through October 2017, receipts are 2.8 percent lower from the comparable period in 2016. The Value at Test price is $17.22, $0.70 higher than the previous month, and $1.90 above a year ago. The percentage of receipts used in Class 1 products is 14.84 percent. The October quota price is $17.20 and the over quota price is $15.50. These prices are $0.25 above last month, and $1.46 higher from a year ago. Arizona farm milk yield is steady to increasing compared to last week. Manufacturing facilities are working at full capabilities due to lower Class I sales. With Thanksgiving around the corner, schools have reduced their milk intakes. Although bottled milk requests from the retail sector are flat -CONTINUED ON PAGE 4A-

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-4A- VOLUME 84, REPORT 47 -CONTINUED FROM PAGE 4- to growing, they are not enough to compensate for the reduction in schools' intakes. Consequently, milk supplies are abundant and more is clearing to the dryers. New Mexico milk production is up this week. Some contacts report that due to repair and maintenance issues at some cheese plants, milk holdovers continue to be high. Handlers are doing their best to find other processing venues for their milk. As the holiday approaches, Class I orders are decreasing by many loads due to the shutting down of educational institutions. Class II sales have significantly declined as well. Class III demand is steady. Overall, milk supplies are abundant in New Mexico. Pacific Northwest milk production is flat this week. Milk intakes are well balanced as many seasonal consumer products continue to pull a lot of milk. However, milk handlers are anticipating a surge of available milk as some processors slow their production for the Thanksgiving holiday. In the mountain states of Idaho, Utah and Colorado, milk production is steady to growing. Processors are not having any trouble finding milk. Some excess milk is moving within the region from the north to the south in an effort to find available processing capacity. Industry contacts report a few loads of cream moving in the region at flat market prices. Western condensed skim processing to dryers is trending up because of reduced demand by Class II processors in this short operational working week. More cream is going to the churns, as cream is plentiful in the western dairy market. According to some contacts, surplus loads of cream are moving to other regions and into Mexico. Cream multiples for all Classes are lower this week at 1.00-1.27 as handlers find ways to manage holiday excess supplies. According to the DMN National Retail Report-Dairy for the week of November 17-23, the national weighted average advertised price for one gallon of milk is $3.06, up $0.12 from last week, and $0.45 higher from a year ago. No advertised prices were reported in the Southwest and Northwest this week. The NASS Milk Production report noted October 2017 milk production in the 23 selected states was 16.7 billion pounds, 1.5 percent above a year ago. Milk cows in the 23 selected states totaled 8.74 million head, 67,000 head more than a year ago. The following table shows the monthly milk production for the western states included in the report and the changes in production compared to a year ago: October 2017 Milk Production, (USDA-NASS) FLUID MILK AND CREAM (Million Lb.) % Change From 1 Year Ago Arizona 405 + 6.6 California 3254-1.5 Colorado 352 + 5.7 Idaho 1239 + 0.2 New Mexico 658 + 1.2 Oregon 205-2.4 Utah 189 + 6.2 Washington 548-0.5

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-5- VOLUME 84, REPORT 47 NONFAT DRY MILK, BUTTERMILK & WHOLE MILK s represent carlot/trucklot quantities for domestic and export sales packaged in 25 kg. or 50 lb. bags, or totes, spray process, dollars per pound. NONFAT DRY MILK - CENTRAL AND EAST CENTRAL: Low/medium heat nonfat dry milk (NDM) prices in the Central region slid on the top of the range, while also declining on both the top and bottom of the mostly price series. Low/medium heat NDM offers were rampant and transactions were steady. Low/medium heat NDM production continues steadily, as other seasonal powders continue to take on some dryer time. Low/medium heat NDM inventories are readily available. The NDM market tone is weak. After a gradual increase last week, market prices have declined on the short CME trading week. High heat NDM prices decreased on the bottom of the range. Spot activity of high heat NDM picked up as the holidays have arrived. High heat NDM producers report that inventories are available, and production will begin to wane in the near term. EAST: Low/medium heat nonfat dry milk (NDM) prices, in the East, are steady to lower in the mostly price series as the market continues to show signs of weakness. A few large volume transactions were made as buyers secured loads along the top of the mostly. Some market participants note that at no time in the industry have they seen a market like current NDM prices. Production of NDM is steady to higher as some plants process additional condensed skim supplies. Because of the premium price, offerings of new production are more demanding to clear. Compared to the previous week, within this holiday-shortened period, spot transactions dropped a notch, as NDM buyers look to cover only urgent needs. Inventories are growing on active drying and limited sale transactions. The high heat nonfat dry milk market price moved lower on the bottom of the range. Producers spot offerings are limited. However, stocks are sufficient for near term customer needs. The undertone parallels a weak low/medium NDM market. CALIFORNIA MANUFACTURING PLANTS - NONFAT DRY MILK WEEK ENDING PRICE TOTAL SALES November 17 $.7656 12,107,680 November 10 $.7673 11,732,086 s are weighted averages for Extra Grade and Grade A Nonfat Dry Milk, f.o.b. California manufacturing plants. s for both periods were influenced by effects of long-term contract sales. Compiled by Dairy Marketing Branch, California Department of Food and Agriculture. DRY BUTTERMILK - CENTRAL AND EAST CENTRAL: s for Central dry buttermilk decreased on both the top and bottom of the range. Dry buttermilk spot offers were steady leading up to Thanksgiving. However, interest is limited. Some end users took on some last-minute spot loads to fulfill timely customer needs. Dry buttermilk production has begun to edge back, along with available inventories. The dry buttermilk market tone is somewhat resilient. Central region contacts remain flabbergasted that buttermilk powder has maintained a somewhat steady to slowly declining price point, while nonfat dry milk continues its descent. EAST: Dry buttermilk prices are lower on limited offerings and exchanges in the spot market. Ahead of the holiday break, production rose for some manufacturers as supplies of condensed buttermilk increased with active churning and declines in ice cream production. A few plants with limited stocks added to holdings this holiday week. Less than truckloads of dry buttermilk are clearing slightly above the range. F.O.B. CENTRAL/EAST: Includes EXTRA GRADE and GRADE A LOW/MEDIUM HEAT:.6800 -.8000 MOSTLY:.7100 -.7600 HIGH HEAT:.8550 -.9800 NONFAT DRY MILK - WEST Western f.o.b. prices for low/medium heat nonfat dry milk (NDM) are lower on both ends of the range and at the bottom of the mostly price series. As shown in the futures values settlements, many sellers are expecting NDM market prices to remain stagnant for the remainder of this year. Some industry contacts report that processors are open to having more flexibility in the terms of 2018 contracts. The market tone seems mixed as some processors report balanced market conditions while others suggest that it is unsettled. NDM production is steady. However, the processing rates are expected to increase as milk production continues to increase and other dairy processing plants close for the holiday. Inventories are adequate to substantial. High heat nonfat dry milk prices are lower at the top of the range. Production is increasing. Therefore, inventories are becoming more available. High heat nonfat dry milk sales to the bakery sector and dry mix manufacturers are firm. Most sales are based on contractual obligations. The market undertone is balanced. At the GDT Event 200 on November 21, 2017 skim milk powder (SMP) prices across all contract periods F.O.B. WEST: Includes EXTRA GRADE and GRADE A LOW/MEDIUM HEAT:.6500 -.8175 MOSTLY:.7100 -.7900 HIGH HEAT:.9000 -.9700 F.O.B. CENTRAL/EAST:.8000 -.8925 DRY BUTTERMILK - WEST F.O.B. spot prices for western dry buttermilk are steady on the range and mostly price series. The market undertone is steady. Demand from the bakery sector is active as processors make more of the holiday foods. Dry buttermilk production is steady to trending up due to most processing plants operating at full capacity during the holiday weekend. Current dry buttermilk inventories are flat to increasing. F.O.B. WEST:.7400 -.8500 MOSTLY:.7900 -.8200 DRY WHOLE MILK - NATIONAL The national f.o.b. prices for dry whole milk are mixed during this shortened holiday-week. Although the market still feels weak, according to some contacts, a few transactions pulled up the top of the range. In general, spot sales activity is very light as most sales are based on contractual needs. Demands from the bakery and confectionary sectors are active. WMP production is steady, but is expected to increase through the end of the week as most dryers will be running at full capacity during the holidays. Thus, inventories vary from plant to plant, but are expected to increase by the upcoming week. F.O.B. PRODUCING PLANT: 1.2900-1.4500

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-6- VOLUME 84, REPORT 47 WHEY, WPC 34%, LACTOSE & CASEIN s represent carlot/trucklot quantities for domestic and export sales packaged in 25 kg. or 50 lb. bags, or totes, spray process, dollars per pound. DRY WHEY - CENTRAL Central whey spot prices declined on the top of the range and slightly decreased on both the top and bottom of the mostly price series. Spot market activity was relatively active for a shortened trading week. Production of dry whey continues apace, as heavily discounted milk loads are making their way into cheese plants across the region. Inventories of dry whey are readily available. The dry whey market tone is uncertain. Feed whey spot market prices declined on the top of the range. Feed whey inventories are readily available. Some contacts suggest that with feed grade nonfat dry milk and higher protein concentrations at current price points, sweet whey must be at a marked discount to garner interest. Adding to that, some end users are planning to wait until end of year clearances before entering the spot market. WHEY PROTEIN CONCENTRATE - CENTRAL AND WEST Whey protein concentrate 34% prices decreased at the bottom of the range. Industry contacts report a few blocks moving at lower prices as manufacturers work to keep inventories in check. However, some processors say they have been able to maintain comfortable stocks through contract and regular spot sales. Demand is a little bit of a mixed bag. While WPC34% that meets tight end user specifications has solid demand, WPC34% that is interchangeable with other protein sources is tough to sell. Manufacturers are hopeful that as the new year begins, health conscious consumers will seek out the salubrious properties of proteins and help generate demand and support prices for whey proteins. F.O.B. EXTRA GRADE 34% PROTEIN:.6750 -.9400 MOSTLY:.7100 -.8400 F.O.B. CENTRAL:.2500 -.3600 MOSTLY:.2700 -.3300 F.O.B. CENTRAL: ANIMAL FEED MILK REPLACER:.1800 -.2500 LACTOSE - CENTRAL AND WEST DRY WHEY - NORTHEAST Current prices for Northeast dry whey are unchanged. This week, spot trading activity is steady to decreased, as some market participants have adequate supplies to cover the upcoming holiday shortened work week. Production is generally steady to lower as cheese manufacturing is mixed. Dry whey inventories are generally steady. The market tone is steady to weak as prices have declined recently. Supplies are moderately available, although demand is lackluster. s for lactose are unchanged this week. Several blocks of lactose continue to move at the lower end of the price range as manufacturers seek to reduce inventories. A number of industry contacts believe lactose stocks to be heavy. However, a few manufacturers say they have been able to aggressively sell lactose, making their holdings more comfortable. Production is steady and demand is lackluster. Some buyers are content to wait, anticipating lower prices to come. In some cases, manufacturers are not willing to capitulate to the low-ball offers. Either way, buyers and sellers seem willing to engage in the stalemate until something breaks the market loose. Including spot sales and up to 3 month contracts. F.O.B. EDIBLE, NON PHARMACEUTICAL.1800 -.3500 MOSTLY:.1900 -.2900 F.O.B. NORTHEAST: EXTRA GRADE AND GRADE A:.2900 -.3925 CASEIN - NATIONAL DRY WHEY - WEST Western whey prices moved lower at the top of both the range and mostly prices series. Industry contacts report market activity is quiet. While a few manufacturers have been able to maintain their premium pricing, the general trend is toward lower prices. Many end users expected this trend and are holding off on making their purchases. Whey inventories are heavy. Production is steady to higher as the manufacturers seek out their best strategy for capturing the value of the whey. NONHYGROSCOPIC:.2700 -.3800 MOSTLY:.2900 -.3400 Rennet casein prices declined, as did acid casein. The magnitude of decline was greater for rennet casein, which is sold in GDT events. At GDT event 200 on November 21, the rennet casein all contracts price, $2.1065, declined 12.6 percent. The December contract, $2.0548, declined 14.4 percent. Rennet casein had a greater percentage decline than other commodities during GDT trading. The casein market reflects worry about whether there will be adequate demand for supplies, at least without price concessions. Recently reported New Zealand milk production through October, typically the peak month of the season, was higher than last season through October. The added milk is also a concern in terms of how it may reflect in casein production. SPOT SALES AND UP TO 3 MONTH CONTRACTS. PRICES ARE F.O.B., U.S. WAREHOUSE FOR EDIBLE NONRESTRICTED AND VARY ACCORDING TO MESH SIZE AND QUALITY. RENNET: 2.0475-2.3500 ACID: 3.2100-3.3200

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-7- VOLUME 84, REPORT 47 U.S. Dairy Cow Slaughter (1000 head) under Federal Inspection 2017 WEEKLY 2017 2016 WEEKLY 2016 WEEK ENDING DAIRY COWS CUMULATIVE DAIRY COWS DAIRY COWS CUMULATIVE DAIRY COWS 11/4/2017 58.4 2,536.3 58.5 2,479.4 WEBSITE: http://www.ams.usda.gov/mnreports/sj_ls714.txt SOURCE: The slaughter data are gathered and tabulated in a cooperative effort by the Agricultural Marketing Service, The Food Safety and Inspection Service, and the National Agricultural Statistics Service, all of USDA. CLASS III MILK PRICES (3.5% Butterfat) YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2012 17.05 16.06 15.72 15.72 15.23 15.63 16.68 17.73 19.00 21.02 20.83 18.66 2013 18.14 17.25 16.93 17.59 18.52 18.02 17.38 17.91 18.14 18.22 18.83 18.95 2014 21.15 23.35 23.33 24.31 22.57 21.36 21.60 22.25 24.60 23.82 21.94 17.82 2015 16.18 15.46 15.56 15.81 16.19 16.72 16.33 16.27 15.82 15.46 15.30 14.44 2016 13.72 13.80 13.74 13.63 12.76 13.22 15.24 16.91 16.39 14.82 16.76 17.40 CLASS IV MILK PRCES (3.5% Butterfat) YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2012 16.56 15.92 15.35 14.80 13.55 13.24 14.45 15.76 17.41 18.54 18.66 17.83 2013 17.63 17.75 17.75 18.10 18.89 18.88 18.90 19.07 19.43 20.17 20.52 21.54 2014 22.29 23.46 23.66 23.34 22.65 23.13 23.78 23.89 22.58 21.35 18.21 16.70 2015 13.23 13.82 13.80 13.51 13.91 13.90 13.15 12.90 15.08 16.43 16.89 15.52 2016 13.31 13.49 12.74 12.68 13.09 13.77 14.84 14.65 14.25 13.66 13.76 14.97 FEDERAL MILK ORDER CLASS PRICES FOR 2017 (3.5% Butterfat) CLASS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC I 1/ 17.45 16.73 16.90 16.05 15.20 15.31 16.59 16.72 16.71 16.44 16.41 16.88 II 16.36 16.52 16.21 14.81 14.84 16.15 17.48 17.56 16.80 15.95 III 16.77 16.88 15.81 15.22 15.57 16.44 15.45 16.57 16.36 16.69 IV 16.19 15.59 14.32 14.01 14.49 15.89 16.60 16.61 15.86 14.85 1/ Specific order differentials to be added to this base price can be found by going to: www.ams.usda.gov/dairymarketingstatistics; then select s ; and then select Principal Pricing Points. $20.00 $19.00 Class I 2015 2016 2017 $19.00 $18.00 Class II 2015 2016 2017 $18.00 $17.00 $16.00 $15.00 $14.00 $17.00 $16.00 $15.00 $14.00 $13.00 $13.00 $12.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $12.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $19.00 Class III 2015 2016 2017 $18.00 Class IV 2015 2016 2017 $18.00 $17.00 $17.00 $16.00 $16.00 $15.00 $14.00 $13.00 $12.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $15.00 $14.00 $13.00 $12.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-8- VOLUME 84, REPORT 47 INTERNATIONAL DAIRY MARKET NEWS - EUROPE Information gathered November 13-24, 2017 s are U.S. $/MT, F.O.B. port. Information gathered for this report is from trades, offers to sell, and secondary data. This bi-weekly report may not always contain the same products and/or regions. Future reports may be included or withdrawn depending on availability of information. MT = metric ton = 2,204.6 pounds. WESTERN OVERVIEW: No new European Commission dairy policies have recently finalized. However, ongoing background discussions between the European Commission and various EU dairy involved parties continue to circle past the notion that some supply side action may be needed to address weaker dairy product prices, because they are expected to result in lower farm milk pay prices. The EU continues efforts to maintain and expand dairy trade agreements with many other countries. This week talks between the EU and Chile began, focusing on updating 2003 dairy trade provisions. The process will be similar to trade talks with Mexico, which began in June 2016 and are now in an advanced stage moving closer to finalization. January-September 2017 European Union cheese production, 7.06 million MT, increased 1.0 percent from the same period last year, according to CLAL. With cheese exports being aggressively pursued in the EU, January -September EU cheese imports, 41,785 MT, decreased 21.2 percent from the same period one year earlier, according to Eucolait. The range of monthly percentage changes in cumulative import volumes varies from -29.5 percent in June, to -12.6 percent in January. Import volumes and primary origins are shown in the following table: EU Cheese Imports Main Three Origins January-September 2017 Origin Quantity(MT) Percent of Total Switzerland 36,833 88.2 Norway 1,469 3.5 New Zealand 1,226 2.9 BUTTER/BUTTEROIL: Butter prices in Western Europe very slightly firmed, more due to currency valuation than European pricing. The European view is that butter pricing seems generally stable. The butteroil price range is wider, slightly lower at the bottom and slightly higher at the top. Internal demand for packaged butter in Northern European countries is stronger, some call it buoyant. Block butter demand is stronger. Retailers will be seeking more deliveries from manufacturers through the year. Few contracts for 2018 have finalized due to price uncertainty. While butter export activity has picked up since summer, it is still quiet. January-September 2017 European Union butter production, 1.60 million MT, decreased 3.7 percent from the same period last year, according to CLAL. January-September EU butter imports, 7,177 MT, increased 59.6 percent from the same period one year earlier, according to Eucolait. The range of monthly percentage changes in cumulative import volumes varies from +59.6 percent in September, to +15.7 percent in May. Import volumes and primary origins are shown in the following table: EU Butter Imports Main Three Origins January-September 2017 Origin Quantity(MT) Percent of Total New Zealand 4,813 67.1 Ukraine 2,015 28.1 Norway 171 2.4 82% BUTTERFAT: 5,825-6,200 99% BUTTERFAT: 6,975-8,200 SKIM MILK POWDER (SMP): Western Europe skim milk powder prices are steady. January-September 2017 European Union SMP production, 1.22 million MT, decreased 1.3 percent from the same period last year, according to CLAL. Nevertheless, the overhang of SMP held in the intervention program overrides any small decline in production. Recent SMP export activity has increased. Buying interest has led to more deals, but pricing continues to be weaker than desirable for manufacturers. Sales within the EU remain tepid following most food manufacturers reporting that they have covered needs for the holiday season. Most current SMP production is still seeking buyers. 1.25% BUTTERFAT: 1,700-1,825 SWEET WHEY POWDER: European sweet whey pricing is lower at the bottom of the price range, but steady at the top. Few transactions occur at top range pricing. Demand within the EU for food quality whey has weakened. While this continues to keep pricing weaker, many sellers and buyers believe prices are stable near the expected bottom for this price cycle. January-September EU whey imports, 67,692 MT, decreased 0.3 percent from the same period one year earlier, according to Eucolait. The range of monthly percentage changes in cumulative import volumes varies from -18.5 percent in January, to -0.3 percent in September. Import volumes and primary origins are shown in the following table: EU Whey Imports Main Three Origins January-September 2017 Origin Quantity(MT) Percent of Total Switzerland 56,133 82.9 Norway 5,946 8.8 Belarus 2,980 4.4 January-September China whey imports, 395,458 MT, increased 6 percent from the same period one year earlier, according to Eucolait. The range of monthly percentage changes in cumulative import volumes varies from -21.6 percent in January, to +13.7 percent in April. Import volumes and primary origins are shown in the following table: China Whey Imports Main Three Origins January-September 2017 Origin Quantity(MT) Percent of Total USA 216,251 54.7 France 46,907 11.9 Netherlands 30,357 7.7 NONHYGROSCOPIC: 750-875 WHOLE MILK POWDER (WMP): European whole milk powder prices slightly weakened. January-September 2017 European Union WMP production, 0.62 million MT, increased 2.6 percent from the same period last year, according to CLAL. WMP for internal EU use has experienced some recent increased completion of sales, often with price concessions by sellers. s throughout the EU are somewhat uneven. Exports are very slow due to ample global supplies and competitive pricing. 26% BUTTERFAT: 2,950-3,400 -CONTINUED ON PAGE 8 A

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-8A- VOLUME 84, REPORT 47 INTERNATIONAL DAIRY MARKET NEWS - EUROPE Information gathered November 13-24, 2017 s are U.S. $/MT, F.O.B. port. Information gathered for this report is from trades, offers to sell, and secondary data. This bi-weekly report may not always contain the same products and/or regions. Future reports may be included or withdrawn depending on availability of information. MT = metric ton = 2,204.6 pounds. -CONTINUED FROM PAGE 8 EASTERN OVERVIEW: January-September 2017 milk production in Poland increased 4.6 percent from the same period last year, according to CLAL. Farmgate milk prices in Poland January-September increased 26.6 percent to 31.35 euros/100 kg compared with year ago.

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-8B- VOLUME 84, REPORT 47 INTERNATIONAL DAIRY MARKET NEWS - OCEANIA Information gathered November 13-24, 2017 s are U.S. $/MT, F.O.B. port. Information gathered for this report is from trades, offers to sell, and secondary data. This bi-weekly report may not always contain the same products and/or regions. Future reports may be included or withdrawn depending on availability of information. MT = metric ton = 2,204.6 pounds. AUSTRALIA: Resolution of the uncertainty as to the fate of dairy processing plants throughout Australia, now for sale following the well -known fate of a large dairy cooperative, moves closer to completion. The sale is now awaiting regulatory review. The bidder from North America has stated having no intention of splitting the plants for resale if it acquires the assets. In fact, the bidder states that it intends to increase production at a number of the plants and pay industry leading farmgate prices to acquire milk to do that. Meanwhile a portfolio of four large dairy farms in Tasmania, which supplies milk to the cooperative selling off its plants, is now up for sale. The four farms represent about 3,500 cows. NEW ZEALAND: October 2017 New Zealand milk production was 3.1 million MT, up from 2.5 million MT in September, according to DCANZ. During October 2016, milk production was 3.0 million MT. October milk solids, 254.6 million kg, are up from 207.4 million kg in September. During October 2016, milk solids were 247.4 million kg. Improved New Zealand weather conditions during the second half of October are credited with the uptick in milk production. With October typically the peak month for milk production, the production increase is viewed as potentially making an overall seasonal increase over the last season far more likely to occur. At the November 21 GDT event #200, all contracts prices ranged from unchanged to 12.6 percent lower from the prior event across categories. The all contracts price averages (US$ per MT) and percent changes from the previous averages are: anhydrous milk fat, $6,887, 0.0 percent; butter, $5,144, -5.9 percent; buttermilk powder, n.a.; cheddar cheese, $3,831, -4.2 percent; lactose, n.a.; rennet casein, $4,644, -12.6 percent; skim milk powder, $1,701, -6.5 percent; and whole milk powder, $2,778, -2.7 percent. BUTTER: Butter prices in Oceania weakened and they remain below EU pricing. A disappointing GDT outcome this week contributed to pulling butter prices lower. Increased New Zealand milk production during October is cited as contributing to less concern about butter availability and hence, the weaker prices. At GDT Event 200 on November 21, the butter all contracts price, $5,144, decreased 5.9 percent. The January contract, $5,108, decreased 7.1 percent. January-September China butter imports, 55,392 MT, increased 7.8 percent from the same period one year earlier, according to Eucolait. The range of monthly percentage changes in cumulative import volumes varies from -29.9 percent in January, to +13.9 percent in August. Import volumes and primary origins are shown in the following table: China Butter Imports Main Three Origins January-September 2017 Origin Quantity(MT) Percent of Total New Zealand 46,611 84.2 France 4,694 8.5 Australia 1,658 3.0 82% BUTTERFAT: 5,100-5,750 SKIM MILK POWDER (SMP): Oceania skim milk powder prices slightly weakened. This weakness is global for SMP. Current prices slightly notching down, while disappointing, is not particularly surprising. Until there is a resolution of SMP stocks held in the EU, it is unlikely there will be much price strength returning to SMP. Even stronger exports of SMP can do little considering the volumes of stocks being held. At GDT Event 200 on November 21, the SMP all contracts price, $1,701, decreased 6.5 percent. The December contract, $1,760, decreased 4.9 percent. January-September China SMP imports, 201,043 MT, increased 32.2 percent from the same period one year earlier, according to Eucolait. The range of monthly percentage changes in cumulative import volumes varies from -2 percent in January, to +32.2 percent in September. Import volumes and primary origins are shown in the following table: China SMP Imports Main Three Origins January-September 2017 Origin Quantity(MT) Percent of Total New Zealand 95,080 47.3 Australia 25,832 12.9 USA 20,799 10.4 January-September Japan SMP imports, 40,119 MT, increased 57.3 percent from the same period one year earlier, according to Eucolait. The range of monthly percentage changes in cumulative import volumes varies from -23.9 percent in January, to +57.3 percent in September. Import volumes and primary origins are shown in the following table: Japan SMP Imports Main Three Origins January-September 2017 Origin Quantity(MT) Percent of Total New Zealand 16,810 41.9 USA 7,049 17.6 Australia 5,426 13.5 1.25% BUTTERFAT: 1,650-1,800 CHEDDAR CHEESE: Oceania cheddar cheese prices weakened, following the current general trend for Oceania dairy products. This price dip is not considered more than a trading range variation. Confidence remains in the general staying power of cheese markets in Oceania. At GDT Event 200 on November 21, the cheddar all contracts price, $3,831, decreased 4.2 percent. The December contract, $4,198, decreased 1.6 percent. January-September Japan cheese imports, 200,284 MT, increased 5.1 percent from the same period one year earlier, according to Eucolait. The range of monthly percentage changes in cumulative import volumes varies from -3.0 percent in March, to +6.4 percent in June. Import volumes and primary origins are shown in the following table: CONTINUED ON PAGE 8C

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-8C- VOLUME 84, REPORT 47 INTERNATIONAL DAIRY MARKET NEWS - OCEANIA Information gathered November 13-24, 2017 s are U.S. $/MT, F.O.B. port. Information gathered for this report is from trades, offers to sell, and secondary data. This bi-weekly report may not always contain the same products and/or regions. Future reports may be included or withdrawn depending on availability of information. MT = metric ton = 2,204.6 pounds. CONTINUED FROM PAGE 8B Japan Cheese Imports Main Three Origins January-September 2017 Origin Quantity(MT) Percent of Total Australia 62,027 31.0 New Zealand 46,589 23.3 USA 22,635 11.3 39% MAXIMUM MOISTURE: 3,725-4,200 WHOLE MILK POWDER (WMP): Oceania whole milk powder prices are slightly lower. This is, in part, a response to the most recent GDT event, which disappointed many in the industry with lower prices. Oceania WMP prices have been lower for each of the last four Dairy Market News price reports. Early thoughts are that reported gains in New Zealand milk production for October weighed on the market. At GDT Event 200 on November 21, the WMP all contracts price, $2,778, decreased 2.7 percent. The December contract, $2,853, decreased 4.5 percent. January-September China WMP imports, 392,970 MT, increased 15 percent from the same period one year earlier, according to Eucolait. The range of monthly percentage changes in cumulative import volumes varies from -10 percent in January, to +15 percent in September. Import volumes and primary origins are shown in the following table: China WMP Imports Main Three Origins January-September 2017 Origin Quantity(MT) Percent of Total New Zealand 369,345 94.0 Australia 7,225 1.8 France 6,868 1.8 26% BUTTERFAT: 2,750-2,900

DAIRY MARKET NEWS, NOVEMBER 20 24, 2017-8D- VOLUME 84, REPORT 47 INTERNATIONAL DAIRY MARKET NEWS - SOUTH AMERICA Information gathered November 13-24, 2017 s are U.S. $/MT, F.O.B. port. Information gathered for this report is from trades, offers to sell, and secondary data. This bi-weekly report may not always contain the same products and/or regions. Future reports may be included or withdrawn depending on availability of information. MT = metric ton = 2,204.6 pounds. SOUTH AMERICA OVERVIEW: Over the past few weeks, the Mercosur bloc and the European Union (EU) have been developing rounds of negotiations for the eventual signing of a trade agreement between the two blocs. Before the signing of the agreement, the EU requests the exclusivity of some geographical indications (GIs) for cheese. As a result, yesterday, the Uruguayan government opened a 30- day public consultation in order to gather inputs from the public. The main purpose of this consultation is to avoid any possible conflicts between the European GIs and the cheese names used in Uruguay. Meanwhile, farm milk production in Argentina and Uruguay, is steady to slightly down, after reaching its seasonal peak. Milk/cream volumes are ample to cover most processing inquiries. The retail/food service demands for bottled milk, cheese, and butter are hearty. In Brazil, cows milk production continues growing as the seasonal peak approaches, which generally occurs through December and January. Milk intakes are more than sufficient to cover most manufacturing needs. Therefore, the dependence on imports of dairy products from neighboring countries continues to decline. The UHT milk market is showing signs of weakness as prices are falling while inventories continue growing. Meanwhile, the cheese and milk powder markets are steady with no major changes during the past two weeks. SKIM MILK POWDER (SMP): Skim milk powder (SMP) f.o.b. export values are mixed this week in the Southern Cone region as some transactions pushed up the bottom of the pricing range. SMP output is lower as most processors are focusing on converting heavy condensed volumes into WMP, which is limiting SMP production. Inventories for SMP are mostly in balance with buyers/end users needs. The October 2017 Dairy Market News monthly average price per metric ton for SMP in the Southern Cone of South America is $2,655. At the GDT Event 200 on November 21, skim milk powder (SMP) prices across all contract periods averaged $1,701 per metric ton, down 6.5% from the last event. 1.25% BUTTERFAT: 2,600 2,850 WHOLE MILK POWDER (WMP): In the Southern Cone, whole milk powder (WMP) f.o.b. export prices are mixed as the bottom of the range dropped in line with the most recent downward WMP values trends at the GDT. The lower price of the range is mirroring export trades outside the Mercosur bloc, while the top is reflecting light transactions within the bloc, essentially exports to Brazil. Unlike one year ago, the Brazilian demand for WMP is sluggish as supplies are readily available in this country. Regional WMP drying schedules are very active, prompted by large farm milk intakes throughout the region. The October 2017 Dairy Market News monthly average price per metric ton for WMP in the Southern Cone of South America is $3,234, compared to $2,917 a year ago. At the GDT Event 200 on November 21, whole milk powder (WMP) prices across all contract periods averaged $2,778 per metric ton, down 2.7 percent from the last event. 26% BUTTERFAT: 2,900-3,400

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-8E- VOLUME 84, REPORT 47 INTERNATIONAL DAIRY MARKET NEWS Global/Dairy Trading (gdt) Event 200 Recap - November 21, 2017 US$/MT Contract 1 Contract 2 Contract 3 Contract 4 Contract 5 Contract 6 All Contracts Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Anhydrous Milk Fat $6,963-7.4% $6,909 n.a $6,867 0.2% $6,870 1.7% $6,846 2.6% n.a. $6,887 0.0% Butter n.a. $5,108-7.1% $5,147-6.4% $5,215-3.5% $5,190-3.5% n.a. $5,144-5.9% Buttermilk Powder n.a. n.a n.a n.a. n.a. n.a. n.a Cheddar $4,198-1.6% $3,787-4.4% $3,725-7.0% $3,851-1.9% $3,955-4.1% n.a. $3,831-4.2% Lactose n.a. n.a n.a n.a. n.a. n.a. n.a Rennet Casein $4,530-14.4% $4,747-13.9% $4,515-11.5% $4,639-11.4% $4,580-9.7% n.a. $4,644-12.6% Skim Milk Powder $1,760-4.9% $1,655-7.5% $1,726-6.8% $1,798-3.7% $1,827-2.3% n.a. $1,701-6.5% Whole Milk Powder $2,853-4.5% $2,772-1.4% $2,756-3.0% $2,761-3.5% $2,790-2.9% n.a. $2,778-2.7% Average price US$/MT and % change in indices from previous event. Global/Dairy Trading (gdt) Event 200 Recap - November 21, 2017 US$/Pound Contract 1 Contract 2 Contract 3 Contract 4 Contract 5 Contract 6 All Contracts Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Anhydrous Milk Fat $3.1584-7.4% $3.1339 n.a $3.1149 0.2% $3.1162 1.7% $3.1053 2.6% n.a. $3.1239 0.0% Butter n.a. $2.3170-7.1% $2.3347-6.4% $2.3655-3.5% $2.3542-3.5% n.a. $2.3333-5.9% Buttermilk Powder n.a. n.a n.a n.a. n.a. n.a. n.a Cheddar $1.9042-1.6% $1.7178-4.4% $1.6896-7.0% $1.7468-1.9% $1.7940-4.1% n.a. $1.7377-4.2% Lactose n.a. n.a n.a n.a. n.a. n.a. n.a Rennet Casein $2.0548-14.4% $2.1532-13.9% $2.0480-11.5% $2.1042-11.4% $2.0775-9.7% n.a. $2.1065-12.6% Skim Milk Powder $0.7983-4.9% $0.7507-7.5% $0.7829-6.8% $0.8156-3.7% $0.8287-2.3% n.a. $0.7716-6.5% Whole Milk Powder $1.2941-4.5% $1.2574-1.4% $1.2501-3.0% $1.2524-3.5% $1.2655-2.9% n.a. $1.2601-2.7% Average price US$/pound and % change from previous event.

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-9- VOLUME 84, REPORT 47 CME GROUP, INC FUTURES Selected settling prices Month 11/10 11/13 11/14 11/15 11/16 11/17 11/20 11/21 III MILK FUTURES (Pit-Traded) ($/cwt) NOV 17 16.77 16.80 16.82 16.84 16.80 16.79 16.83 16.82 DEC 17 15.59 15.69 15.76 15.73 15.46 15.27 15.40 15.37 JAN 18 14.87 14.96 15.03 14.96 14.75 14.54 14.64 14.60 FEB 18 14.87 14.93 15.01 14.96 14.75 14.48 14.59 14.56 MAR 18 14.85 14.88 14.93 14.86 14.67 14.41 14.54 14.49 APR 18 14.99 14.98 15.03 14.94 14.85 14.57 14.65 14.68 MAY 18 15.10 15.10 15.17 15.09 15.01 14.85 14.87 14.88 JUN 18 15.35 15.35 15.39 15.37 15.30 15.22 15.18 15.19 JUL 18 15.73 15.69 15.73 15.67 15.60 15.53 15.49 15.47 AUG 18 15.85 15.79 15.86 15.82 15.76 15.65 15.65 15.55 CLASS IV MILK FUTURES (Pit-Traded) ($/cwt) NOV 17 13.83 13.90 13.93 13.98 13.98 14.01 14.01 14.01 DEC 17 13.67 13.80 13.96 13.96 13.96 13.86 13.86 13.74 JAN 18 13.71 13.90 14.04 14.04 14.04 13.86 13.86 13.62 FEB 18 13.73 14.00 14.10 14.10 14.10 13.97 13.97 13.86 CASH SETTLED BUTTER FUTURES (Electronic-Traded) ( /lb) NOV 17 227.00 227.23 228.70 228.00 228.38 228.40 228.40 228.40 DEC 17 225.08 226.03 229.85 228.75 226.15 225.00 225.00 224.18 JAN 18 228.00 228.60 232.10 230.98 227.95 226.23 226.03 224.88 FEB 18 229.50 229.95 233.55 229.78 229.30 228.60 228.35 227.00 NONFAT DRY MILK FUTURES (Pit-Traded) ( /lb) NOV 17 74.60 74.80 75.00 75.78 75.58 75.25 75.25 75.25 DEC 17 73.50 74.50 74.85 75.75 75.75 74.50 75.05 74.25 JAN 18 73.10 74.50 75.43 75.45 75.25 73.45 73.30 73.35 FEB 18 73.90 75.08 76.18 76.25 75.85 73.50 73.25 73.00 WHEY (Electronic-Traded) ( /lb) NOV 17 35.35 35.35 35.35 35.35 35.35 35.10 35.10 35.10 DEC 17 32.98 33.00 33.00 33.00 33.00 31.50 31.43 31.43 JAN 18 28.75 29.00 29.00 28.85 28.50 28.25 27.75 27.60 FEB 18 27.35 28.00 28.00 27.75 27.25 26.50 26.00 26.00 CHEESE CSC (Electronic-Traded) ($/lb) NOV 17 1.76 1.76 1.76 1.76 1.76 1.76 1.76 1.76 DEC 17 1.65 1.65 1.66 1.66 1.64 1.63 1.64 1.64 JAN 18 1.60 1.60 1.61 1.61 1.58 1.57 1.58 1.58 FEB 18 1.60 1.61 1.61 1.61 1.59 1.57 1.58 1.58 MAR 18 1.61 1.60 1.61 1.61 1.59 1.57 1.58 1.58 Source: http://www.cmegroup.com/market-data/daily-bulletin.html

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-10- VOLUME 84, REPORT 47 October Milk Production Milk production in the 23 major States during October totaled 16.7 billion pounds, up 1.5 percent from October 2016. September revised production, at 16.2 billion pounds, was up 1.1 percent from September 2016. The September revision represented a decrease of 9 million pounds or 0.1 percent from last month's preliminary production estimate. Production per cow in the 23 major States averaged 1,917 pounds for October, 13 pounds above October 2016. This is the highest production per cow for the month of October since the 23 State series began in 2003. The number of milk cows on farms in the 23 major States was 8.74 million head, 67,000 head more than October 2016, but 1,000 head less than September 2017. October 2017 Milk Cows and Milk Production, by States Milk Cows 1 Milk per Cow 2 Milk Production 2 State Change from 2016 2017 2016 2017 2016 2017 2016 (thousands) (pounds) (million pounds) (percent) AZ 197 206 1,930 1,965 380 405 6.6 CA 1,758 1,745 1,880 1,865 3,305 3,254-1.5 CO 153 162 2,175 2,175 333 352 5.7 FL 120 123 1,475 1,445 177 178 0.6 ID 599 603 2,065 2,055 1,237 1,239 0.2 IL 93 93 1,620 1,680 151 156 3.3 IN 184 187 1,880 1,910 346 357 3.2 IA 215 219 1,955 1,995 420 437 4.0 KS 147 152 1,925 1,945 283 296 4.6 MI 422 428 2,140 2,180 903 933 3.3 MN 461 457 1,720 1,785 793 816 2.9 NM 321 329 2,025 2,000 650 658 1.2 NY 620 624 2,000 1,985 1,240 1,239-0.1 OH 263 264 1,750 1,780 460 470 2.2 OR 124 122 1,695 1,680 210 205-2.4 PA 526 525 1,695 1,710 892 898 0.7 SD 115 118 1,870 1,890 215 223 3.7 TX 490 515 1,885 1,890 924 973 5.3 UT 91 97 1,955 1,950 178 189 6.2 VT 129 128 1,750 1,765 226 226 --- VA 88 87 1,585 1,650 139 144 3.6 WA 275 274 2,005 2,000 551 548-0.5 WI 1,277 1,277 1,950 1,995 2,490 2,548 2.3 23 State Total 8,668 8,735 1,904 1,917 16,503 16,744 1.5 1 Includes dry cows. Excludes heifers not yet fresh. 2 Excludes milk sucked by calves. Source: U.S. Department of Agriculture. National Agricultural Statistics Service. Agricultural Statistics Board. Milk Production, (November 2017).

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017-11- VOLUME 84, REPORT 47 Federal Milk Order Advance Class s, December 2017 Base Class I : Under the Federal milk order pricing system, the base Class I price for December 2017 is $16.88 per cwt. This price is derived from the advanced Class III skim milk pricing factor of $8.30 and the advanced butterfat pricing factor of $2.5335. A Class I differential for each order's principle pricing point (county) is added to the base price to determine the Class I. Comparison to Previous Month: The base Class I price increased $0.47 per cwt when compared to the previous month of November 2017. For selected consumer products, the price changes are: whole milk (3.25% milk fat), $0.51 per cwt, $0.044 per gallon; reduced fat milk (2%), $0.70 per cwt, $0.060 per gallon; fat-free (skim milk), $0.95 per cwt, $0.082 per gallon. Class II Information: The advanced Class IV skim milk pricing factor is $5.24. Thus, the Class II skim milk price for December 2017 is $5.94 per cwt, and the Class II nonfat solids price is $0.6600. Product Averages: whey $0.3561. The two-week product price averages for December 2017 are: butter $2.2636, nonfat dry milk $0.7563, cheese $1.7641 and dry Federal Milk Order Class I Information 1 2 Dec 2017 Federal Milk Order Marketing Area 3 Order Number Class I Class I Class I Skim Milk Butterfat (3.5%) (dollars per cwt) (dollars per cwt) (dollars per pound) Northeast (Boston) 4 001 20.13 11.55 2.5660 Appalachian (Charlotte) 5 005 20.28 11.70 2.5675 Florida (Tampa) 6 006 22.28 13.70 2.5875 Southeast (Atlanta) 7 007 20.68 12.10 2.5715 Upper Midwest (Chicago) 8 030 18.68 10.10 2.5515 Central (Kansas City) 9 032 18.88 10.30 2.5535 Mideast (Cleveland) 10 033 18.88 10.30 2.5535 Pacific Northwest (Seattle) 11 124 18.78 10.20 2.5525 Southwest (Dallas) 12 126 19.88 11.30 2.5635 Arizona (Phoenix) 131 19.23 10.65 2.5570 All-Market Average 19.77 11.19 2.5624 1 To convert the Class I price per 100 pounds to the Class I price per gallon, divide by 11.63 - the approximate number of gallons in 100 pounds of milk. 2 Note: The mandatory $0.20 per cwt processor assessment under the Fluid Milk Promotion Order is not included in the Class I prices shown on this table. 3 Names in parentheses are the major city in the principal pricing point of the markets. 4 Class I prices at other cities are: New York City, minus $0.10; Philadelphia, minus $0.20; Baltimore, minus $0.25, and Washington, DC, minus $0.25. 5 Class I prices at other cities are: Knoxville, minus $0.20 and Louisville, minus $1.10. 6 Class I prices at other cities are: Orlando, same; Miami, plus $0.60; and Jacksonville, minus $0.40. 7 Class I prices at other cities are: New Orleans, same; Memphis, minus $0.90; Nashville, minus $0.90; and Springfield, MO, minus $1.40. 8 Class I prices at other cities are: Milwaukee, minus $0.05; and Minneapolis, minus $0.10. 9 Class I prices at other cities are: Des Moines, minus $0.20; Omaha, minus $0.15; Oklahoma City, plus $0.60; St. Louis, same; and Denver, plus $0.55. 10 Class I prices at other cities are: Indianapolis, same; Cincinnati, plus $0.20; Pittsburgh, plus $0.10; and Detroit, minus $0.20. 11 Class I prices at other cities are: Portland, same; and Spokane, same. 12 Class I prices at other cities are: Houston, plus $0.60; San Antonio, plus $0.45; Albuquerque, minus $0.65; and El Paso, minus $0.75. Report Contact: Randal Stoker, randal.stoker@usda.gov or 202-690-1932.

DAIRY MARKET NEWS, NOVEMBER 20 24, 2017-12 - VOLUME 84, REPORT 48 MONTHLY COLD STORAGE REPORT TOTAL U.S. STOCKS NOTE: Data for this report is collected from public, private and semiprivate warehouses, apple houses, and meat packing plants where food products are generally stored for 30 days or more. Commodities in space owned or leased and operated by the armed services are not reported. Food stocks held under bond are included in the storage data. All stocks in thousand pounds except where otherwise indicated U.S. H O L D I N G S O F D A I R Y P R O D U C T S COMMODITY SEP 30, 2015 SEP 30, 2016 REVISED SEP 30, 2017 OCT 31, 2015 OCT 31, 2016 OCT 31, 2017 Butter 187,528 269,125 255,839 178,834 228,158 219,753 Cheese, Natural American 698,875 742,804 780,466 696,781 736,017 739,330 Cheese, Swiss 22,037 26,055 25,408 21,404 24,428 24,275 Cheese, Other Natural 431,534 466,593 502,198 428,006 461,870 504,227 Total Cheese 1,152,446 1,235,452 1,308,072 1,146,191 1,222,315 1,267,832 New England Middle Atlantic East North Central West North Central South Atlantic East South Central West South Central Mountain Pacific O C T O B E R S T O R A G E H O L D I N G S B Y R E G I O N REGION Natural American Cheese Butter * Other Natural Cheese 2015 2016 2017 2015 2016 2017 2015 2016 2017 64,321 64,708 64,274 2,422 950 722 70,886 87,153 58,162 28,301 16,122 14,723 276,783 292,508 322,631 264,169 289,126 328,743 111,325 117,989 113,097 47,461 51,252 43,618 961 1,479 673 26,292 25,427 31,644 5,739 6,390 11,402 13,456 22,939 18,660 11,250 21,145 11,111 971 1,274 1,257 57,070 47,621 46,878 3,721 3,029 8,184 98,446 97,024 111,102 41,213 51,751 56,676 TOTAL 696,781 736,017 739,330 178,834 228,158 219,753 428,006 461,870 504,227 *Regional breakdowns are not reported to avoid possible disclosure of individual operations. MILLION POUNDS 340 320 300 280 260 240 220 200 180 160 140 120 100 80 60 Butter Cold Storage Holdings JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC DATA SOURCE, USDA, NASS; GRAPH, USDA, AMS, DMN 2013 2014 2015 2016 2017

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017 -G1- VOLUME 84, REPORT 47 MILLION HEAD 8.75 Milk Cow Numbers - 23 Selected States 8.70 8.65 8.60 8.55 8.50 8.45 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec DATA SOURCE, USDA, NASS; GRAPH, USDA, AMS, DMN 2013 2014 2015 2016 2017 BILLION POUNDS 18.0 Milk Production - 23 Selected States 17.5 17.0 16.5 16.0 15.5 15.0 14.5 14.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec DATA SOURCE, USDA, NASS; GRAPH, USDA, AMS, DMN NOTE FEB DATA FOR 2016 ADJUSTED TO 28 DAY EQUIVALENT 2013 2014 2015 2016 2017

DAIRY MARKET NEWS, NOVEMBER 20-24, 2017 -G2- VOLUME 84, REPORT 47 U.S. Natural American Cheese Cold Storage Holdings MILLION POUNDS 850 840 830 820 810 800 790 780 770 760 750 740 730 720 710 700 690 680 670 660 650 640 630 620 610 600 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec DATA SOURCE, USDA, NASS; GRAPH, USDA, AMS, DMN 2013 2014 2015 2016 2017 MILLION POUNDS 35 U.S. Swiss Cheese Storge Holdings 33 31 29 27 25 23 21 19 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec DATA SOURCE, USDA, NASS; GRAPH, USDA, AMS, DMN 2013 2014 2015 2016 2017 MILLION POUNDS 520 510 500 490 480 470 460 450 440 430 420 410 400 390 380 370 360 350 340 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec DATA SOURCE, USDA, NASS; GRAPH, USDA, AMS, DMN U.S. Other Natural Cheese Cold Storage Holdings 2013 2014 2015 2016 2017

Dairy Market News Branch Agricultural Marketing Service National Retail Report-Dairy Websites: http://www.marketnews.usda.gov/mnp/da-home and http://www.ams.usda.gov/mnreports/dybretail.pdf Volume 84- Number 47 Issued Weekly Wednesday, November 22, 2017 Advertised s for Dairy Products at Major Retail Supermarket Outlets ending during the period of 11/24/2017 to 11/30/2017 With Thanksgiving this week, dairy ad numbers for related dairy products remain high and prices are up from last week, for conventional 8 oz. cream cheese ($1.78, up 22 cents); 1 pound butter ($3.08, up 1 cent); and 16 oz. sour cream ($1.80, up 3 cents). With 1 pound organic butter having a price of $5.49 (up 65 cents from last week), the organic butter price premium over conventional is $2.41. Organic cream cheese, 8 oz., has a price of $2.79 (up 40 cents from last week), yielding an organic price premium over conventional of $1.01. The U.S. advertised price for 8 ounce conventional cheese blocks averaged $2.16 (down 14 cents from last week), while organic 8 ounce cheese blocks average $3.99 ( even with last week), an organic premium of $1.83. Advertised prices for 8 ounce conventional cheese shreds averaged $2.17 (down 4 cents from last week), while there are no ads for organic 8 ounce cheese shreds. The average sale price for conventional 4-6 ounce Greek yogurt is $.97 (down 1 cent from last week), while regular yogurt is $.49 (down 2 cents from last5 week). There are no ads for any pack size of organic yogurt. There are no ads for conventional half gallon milk this week. The weighted average price for organic half gallon milk is $4.39 (up 46 cents from last week). There are more ads for organic milk than conventional milk. Top 5 Commodities Featured This Week 30K 11/24/2017 11/17/2017 11/10/2017 25K with Ads 20K 15K 10K 5K 0K Cheese Cream cheese Ice cream Butter Yogurt 1 -- Dairy Market News surveys nearly 150 retailers, comprising over 23,000 individual stores, with online weekly advertised features.

National Retail Report - Dairy Vol 84 - No. 47 Wednesday, November 22, 2017 - Page 2 Percentage of Total Conventional Ads by Commodity Yogurt, 9% Butter, 9% Sour cream, 7% Ice cream, 10% Cheese, 21% Egg nog, 3% Cream cheese, 12% Cottage cheese, 3% Percentage of Total Organic Ads by Commodity Butter, 4% Cheese, 4% Cream cheese, 19% Milk, 73% - Simple weighted average

National Retail Report - Dairy Vol 84 - No. 47 Wednesday, November 22, 2017 - Page 3 NATIONAL -- CONVENTIONAL DAIRY PRODUCTS THIS PERIOD LAST WEEK LAST YEAR Commodity Type Pack Size With Ads With Ads With Ads Butter 1 # 5017 3.08 12349 3.07 8316 2.60 Cheese Natural Varieties 8 oz block 5218 2.16 10296 2.30 10766 2.23 Cheese Natural Varieties 1 # block 1037 4.18 1072 3.88 769 4.32 Cheese Natural Varieties 2 # block 21 5.88 972 5.57 798 6.25 Cheese Natural Varieties 8 oz shred 5080 2.17 9537 2.21 10560 2.18 Cheese Natural Varieties 1 # shred 213 3.99 1304 2.98 197 3.68 Cottage cheese 16 oz 1840 2.28 3431 2.01 5436 1.89 Cream cheese 8 oz 6426 1.78 13334 1.56 10925 1.52 Egg nog quart 748 2.03 1008 3.02 1491 2.79 Egg nog half gallon 813 3.50 1473 3.78 4138 3.48 Flavored milk All fat tests half gallon 246 3.99 264 3.28 6 4.19 Flavored milk All fat tests gallon 419 3.47 227 3.22 Ice cream 48-64oz 5685 3.08 11735 3.17 14639 3.19 Milk All fat tests half gallon 258 2.46 264 2.99 Milk All fat tests gallon 190 3.29 725 3.06 1579 2.77 Sour cream 16 oz 3956 1.80 10406 1.77 10719 1.67 Yogurt Greek 4-6 oz 3017.97 8324.98 4999.99 Yogurt Greek 32 oz 209 4.82 1343 4.42 640 4.50 Yogurt Yogurt 4-6 oz 1148.49 4455.51 1913.51 Yogurt Yogurt 32 oz 424 2.52 579 2.86 1039 2.36 REGIONAL -- CONVENTIONAL DAIRY PRODUCTS NORTHEAST U.S. SOUTHEAST U.S. MIDWEST U.S. Commodity Type Pack Size with Ads Wtd Avg with Ads Wtd Avg with Ads Butter 1 # 2.50-3.99 1495 3.34 2.99-3.50 692 3.18 2.29-3.50 1918 2.79 Cheese Natural Varieties 8 oz block 1.99-2.50 2133 2.25 1.67-2.69 1031 2.08 1.77-2.00 1064 1.92 Cheese Natural Varieties 1 # block 2.99-3.99 551 3.80 3.99 213 3.99 Cheese Natural Varieties 8 oz shred 1.89-3.00 2096 2.29 1.67-2.50 947 2.02 1.77-2.00 1064 1.92 Cheese Natural Varieties 1 # shred 3.99 213 3.99 Cottage cheese 16 oz 1.67-2.50 1136 2.31 1.99-2.00 259 2.00 2.00 53 2.00 Cream cheese 8 oz 0.95-3.00 2022 1.96 1.50-2.99 1835 1.92 0.79-1.99 1304 1.23 Egg nog quart 1.78 195 1.78 Egg nog half gallon 3.79-3.99 233 3.85 2.99 64 2.99 2.99 180 2.99 Ice cream 48-64oz 1.99-4.99 2575 2.89 3.00-3.50 412 3.42 1.99-3.99 1215 3.05 Milk All fat tests gallon 3.49 137 3.49 2.77 53 2.77 Sour cream 16 oz 1.29-2.25 1457 1.76 1.67-2.00 598 1.86 1.49-2.00 1200 1.67 Yogurt Greek 4-6 oz 0.83-1.00 1161.96 1.00 1083 1.00 1.00 348 1.00 Yogurt Greek 32 oz 4.49-4.99 209 4.82 Yogurt Yogurt 4-6 oz 0.39-0.60 466.52 - Simple weighted average

National Retail Report - Dairy Vol 84 - No. 47 Wednesday, November 22, 2017 - Page 4 NORTHEAST U.S. SOUTHEAST U.S. MIDWEST U.S. Commodity Type Pack Size with Ads Wtd Avg with Ads Wtd Avg with Ads Yogurt Yogurt 32 oz 2.49-2.69 178 2.56 SOUTH CENTRAL U.S. SOUTHWEST U.S. NORTHWEST U.S. Commodity Type Pack Size with Ads with Ads Wtd Avg with Ads Butter 1 # 2.99-3.00 301 3.00 3.00-3.99 311 3.44 1.99-3.00 165 2.36 Cheese Natural Varieties 8 oz block 2.00 301 2.00 2.00-3.00 557 2.47 2.00 60 2.00 Cheese Natural Varieties 1 # block 4.99 246 4.99 Cheese Natural Varieties 8 oz shred 2.00 301 2.00 2.00-3.00 557 2.47 2.00 60 2.00 Cottage cheese 16 oz 2.49 246 2.49 2.00 105 2.00 Cream cheese 8 oz 1.50 301 1.50 1.50-1.88 629 1.80 1.99 105 1.99 Egg nog quart 1.67-2.50 492 2.09 Egg nog half gallon 2.99 246 2.99 Flavored milk All fat tests half gallon 3.99 246 3.99 Ice cream 48-64oz 3.50-4.99 301 3.81 2.97-3.50 764 3.10 2.97-3.99 295 3.44 Sour cream 16 oz 2.00 62 2.00 1.99 383 1.99 1.50 105 1.50 Yogurt Greek 4-6 oz 0.79-1.00 383.87 Yogurt Yogurt 4-6 oz 0.39-0.50 492.45 0.50 105.50 Yogurt Yogurt 32 oz 2.49 246 2.49 ALASKA U.S. HAWAII U.S. Commodity Type Pack Size with Ads with Ads Wtd Avg Butter 1 # 2.29-4.79 74 3.92 3.99 61 3.99 Cheese Natural Varieties 8 oz block 1.49 11 1.49 3.00-3.50 61 3.22 Cheese Natural Varieties 1 # block 5.99 27 5.99 Cheese Natural Varieties 2 # block 5.88 21 5.88 Cheese Natural Varieties 8 oz shred 2.49 21 2.49 3.00 34 3.00 Cottage cheese 16 oz 1.50-2.48 14 1.71 3.99 27 3.99 Cream cheese 8 oz 1.29-4.00 108 2.73 1.50-2.59 122 2.13 Egg nog quart 2.29-2.50 61 2.38 Egg nog half gallon 3.49-7.99 63 5.89 3.99 27 3.99 Ice cream 48-64oz 2.79-3.98 35 3.02 2.50-3.99 88 3.26 Sour cream 16 oz 1.50-3.50 63 2.60 2.50-2.99 88 2.65 Yogurt Greek 4-6 oz 1.00-1.25 42 1.13 Yogurt Yogurt 4-6 oz 0.68-0.75 24.74 0.59-0.60 61.60 NATIONAL -- ORGANIC DAIRY PRODUCTS - Simple weighted average

National Retail Report - Dairy Vol 84 - No. 47 Wednesday, November 22, 2017 - Page 5 THIS PERIOD LAST WEEK LAST YEAR Commodity Type Pack Size With Ads With Ads With Ads Butter 1 # 21 5.49 1209 4.84 1348 4.95 Cheese Natural Varieties 8 oz block 21 3.99 256 3.99 Cheese Natural Varieties 1 # block 189 5.99 Cheese Natural Varieties 1 # shred 84 6.99 Cottage cheese 16 oz 62 3.99 Cream cheese 8 oz 105 2.79 751 2.39 330 2.78 Egg nog quart 1279 4.22 Ice cream 48-64oz 189 5.99 1272 4.15 Milk All fat tests half gallon 147 4.39 1645 3.93 1569 4.12 Milk All fat tests gallon 194 6.49 381 5.65 Milk All fat tests 8 oz UHT 246.83 174 1.20 Sour cream 16 oz 277 2.57 105 1.50 Yogurt Greek 4-6 oz 1142 1.00 Yogurt Yogurt 4-6 oz 80 1.00 385 1.30 Yogurt Yogurt 32 oz 348 2.50 REGIONAL -- ORGANIC DAIRY PRODUCTS NORTHEAST U.S. SOUTHEAST U.S. MIDWEST U.S. Commodity Type Pack Size with Ads Wtd Avg with Ads Wtd Avg with Ads SOUTH CENTRAL U.S. SOUTHWEST U.S. NORTHWEST U.S. Commodity Type Pack Size with Ads with Ads Wtd Avg with Ads Cream cheese 8 oz 2.79 105 2.79 Milk All fat tests half gallon 4.49 105 4.49 Milk All fat tests 8 oz UHT 0.83 246.83 ALASKA U.S. HAWAII U.S. Commodity Type Pack Size with Ads with Ads Wtd Avg Butter 1 # 5.49 21 5.49 - Simple weighted average

National Retail Report - Dairy Vol 84 - No. 47 Wednesday, November 22, 2017 - Page 6 ALASKA U.S. HAWAII U.S. Commodity Type Pack Size with Ads with Ads Wtd Avg Cheese Natural Varieties 8 oz block 3.99 21 3.99 Milk All fat tests half gallon 3.79-4.49 42 4.14 As used in this report, regions include the following states: REGIONAL DEFINITIONS NORTHEAST U.S. SOUTHEAST U.S. MIDWEST U.S. SOUTH CENTRAL U.S. SOUTHWEST U.S. NORTHWEST U.S. ALASKA HAWAII NATIONAL Connecticut, Delaware, Massachusetts, Maryland, Maine, New Hampshire, New jersey, New York, Pennsylvania, Rhode Island and Vermont Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia Iowa, Illinois, Indiana, Kentucky, Michigan, Minnesota, North Dakota, Nebraska, Ohio, South Dakota and Wisconsin Arkansas, Colorado, Kansas, Louisiana, Missouri, New Mexico, Oklahoma, and Texas Arizona, California, Nevada and Utah Idaho, Montana, Oregon, Washington, and Wyoming Alaska Hawaii Continental United States - Simple weighted average

Dairy Market News United States Department of Agriculture Agricultural Marketing Service Dairy Programs Market Information Branch Volume 84, Report 47 November 24, 2017 GENERAL NUMBER (608) 422-8587 Elizabeth Frederick (608) 422-8587 Elizabeth.Frederick@AMS.USDA.GOV INTERNS Al Yang (608) 422-8598 Al.Yang@AMS.USDA.GOV Jennifer Hernandez (608) 422-8597 JenniferA.Hernandez@AMS.USDA.GOV EAST/ ORGANIC Daniel Johnson (608) 422-8605 Daniel.Johnson@AMS.USDA.GOV EAST Jessica Mueller (608) 422-8589 Jessica.Mueller@AMS.USDA.GOV CENTRAL Israel Weber (608) 422-8601 Israel.Weber@AMS.USDA.GOV SOUTHWEST/SOUTH AMERICA AJ (Angel José) Terán (608) 422-8593 Angel.Terán@AMS.USDA.GOV SOUTHWEST Florence Kone-Gonzalez (608) 422-8594 Florence.KoneGonzalez@AMS.USDA.GOV NORTHWEST/MOUNTAIN Mike Bandli (608) 422-8592 Mike.Bandli@AMS.USDA.GOV ORGANIC/EUROPE & OCEANIA Eric Graf (608) 422-8590 Eric.Graf@AMS.USDA.GOV NATIONAL SUPERVISOR Janet Linder (608) 422-8588 Janet.Linder@AMS.USDA.GOV BRANCH CHIEF Butch Speth (608) 422-8586 Butch.Speth@AMS.USDA.GOV INTERNET ADDRESS www.ams.usda.gov/market-news/dairy MARKET NEWS PORTAL www.marketnews.usda.gov/mnp/da-home RECORDED INFORMATION SYSTEM (608) 422-8602 FAX (608) 240-6689 USDA, Dairy Market News 4600 American Parkway, STE 106 Madison, WI 53718-8334 www.usda.gov/oce/forum USDA is an equal opportunity provider and employer