Inflation in the U.S. exceeded expectations in September, rising by 0.3% from August, with food and dairy prices notably shifting. Cheese and butter prices fluctuated, while Midwest cream and milk markets remained stable. Ever.Ag highlighted risks for commodity investors amid these developments.
Inflation in the U.S. rose more than anticipated in September 2024, increasing by 0.3% from August, bringing the annual rate to 2.4%. These figures outpaced economists’ predictions, which had projected a 0.2% monthly rise and 2.3% annual increase. The higher-than-expected inflation is driven in part by stubborn food costs, as prices at restaurants and other food-away-from-home venues rose 3.9% year-over-year, slightly down from August’s 4.0%. Grocery store price inflation, however, surged by 1.3% compared to last year, marking the steepest rise since November 2023. This spike is putting extra pressure on consumers as they brace for upcoming holiday season spending.
The dairy market also experienced notable movements, as reported by the Chicago Mercantile Exchange (CME). Barrel cheese prices continued to soften, dropping by 1.5 cents to $1.8650 per pound, with limited activity and just one lot traded. Conversely, block cheese prices inched up to $1.9300 per pound, with ten lots exchanged. Meanwhile, butter prices declined slightly, closing at $2.6400 per pound, with a total of 30 lots sold.
Cream supplies in the Midwest are reported to be adequate as manufacturers prepare for the holiday production rush. Midwest cream multiples, which represent the relationship between cream prices and the value of milk, edged up to 1.32, an increase from last week’s 1.31 but still below the five-year average of 1.34. This adjustment reflects stable production in the region. Milk production across the U.S. is holding steady despite reports of plant maintenance and downtime. Demand, however, remains robust, with Midwest spot milk prices climbing to $2.00 over class, well above the previous week’s $1.50 and significantly higher than the five-year average of $0.43.
Ever.Ag, a key player in commodity futures trading and risk management services, provided insights into these developments. The company, based in the U.S., emphasizes the importance of cautious investment in the volatile commodity futures market, reminding investors of the substantial risks involved. Ever.Ag specializes in offering market intelligence and risk management solutions for agricultural markets. While their data is widely regarded as reliable, the company notes that past performance does not guarantee future results.
