With barrels, Gavilon and Schreiber were the buyers. Barrels fell 1 3/4 cents.
The pattern in cheese trading is lopsided. There is no one who represents the interest of either the public or the dairy farmer. All of the players have an interest in low farm milk price. So, no one can say in this thinly traded market, the thinness doesn't matter as there are “countervailing forces."
Part of the problem we are dealing with is ignorance of what constitutes a market. Most people think the function of the market as determining supply and demand. However, particularly in today's age computer data, without any CME, a computer program with accurate input could determine supply/demand.
Supply/demand can be perfectly balanced and that says nothing about price. The price could be either high or low.
If we look at Adam Smith’s, the so-called father of capitalism, writing, there is an often quoted phrase, "invisible hand." The implication of "invisible hand" is that through the market system determining price, there is a public benefit.
Further, there is a general understanding that the market system provides efficient allocation of resources.
F.A. Hayek, won the Nobel Prize in economics in 1974 for his explanation of how the market works. In his essay, "The Use of Knowledge in Society", Hayek says:
“The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources--if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.”
The last sentence is the key to understanding markets.
Francis Galton was an early English statistician.
According to Wikipedia:
“In 1906 Galton visited a livestock fair and stumbled upon an intriguing contest. An ox was on display, and the villagers were invited to guess the animal's weight after it was slaughtered and dressed. Nearly 800 gave it a go and, not surprisingly, not one hit the exact mark: 1,198 pounds. Astonishingly, however, the mean of those 800 guesses came close — very close indeed. It was 1,197 pounds.”
The point here is, I think, the price system, a real price system, is heavily dependent upon a large number of players to arrive at what Adam Smith called, "the invisible hand."
The few players on the CME are incapable of setting aside their own self-interest and considering the self interest of others.
A market system is a very complex system and is much, much more than simple absence of government intervention. Cheese pricing on the CME is flawed beyond recognition as anything relating to market price. What is presently called a “free market” on the CME is neither free, nor a market.