The retail price for a pound of butter is $2.53, a drop of 51 cents from two weeks ago. Shredded cheese, ice cream, regular and Greek yogurt prices rise.

Nonfat dry milk production remains heavy with producers holding inventories more confidently, according to the latest Dairy Market News by the USDA. Higher than anticipated volumes of milk are being directed to cheese plants across the nation. Despite increased inventories of cheese, manufacturers are reporting good sales and are mostly comfortable with the added production.
 

Cheese markets across the U.S. continue to look for a clear price direction. Milk production in the East and Midwest is increasing, and Western milk supplies are building as Arizona and New Mexico near peak production.

The USDA's AMS service reported this week that total organic milk products sales for November 2012 were 191 million pounds, an increase of 9% from November 2011.

Milk production is steady despite colder and wetter conditions in the Southwest. Arizona milk supplies are heavy. In the Northwest, milk supplies are slowly increasing. Output trends in Utah and Idaho are about steady. Farm milk pickups are on the rise in the Midwest at higher than expected levels.