From Dairy Market News for the week ending Jan. 9. Read the full report here.

Throughout the country more milk is flowing toward cheese plants than most people would have expected for the first full week of January, based on looking at this period in recent prior years. Many plants are producing cheese well ahead of orders.

There is uncertainty about cheese prices in coming weeks and months, due to the new reality of milk supplies and production levels as well as the difficulty of exporting cheese considering global pricing and currency factors. In fact, increased cheese imports are challenging domestic cheese production. According to GTIS, European cheese exports for October to the U.S. were 25% higher than year ago levels.

Discounted milk continues to be available this week. In some parts of the Midwest, spot milk has moved to cheese plants at $6.00 to $6.50 below Class, depending on location and timing. Sales are mixed, with some plants moving increased product along but others report some diminished buyer interest attributed to adopting more hand to mouth patterns hoping for further price weakness. This leads some plants to sustain building inventory levels beyond preferences.

Dairy Products (NASS) reports total 2014 U.S. cumulative cheese production through November, 10.4 billion pounds, leads last year through November by 2.8%. Friday in CME Group trading, barrels closed at $1.5450, up 1/2 cent from last Friday and 40# blocks closed at $1.5900, up 2 cents from last Friday.