Class III and Cheese futures can be summed up with one word – pressure. The latest GDT auction came in 2.2% lower overall, with a sharp 7.1% downdraft for the price of cheddar. The April Milk Production report registered a 1.7% uptick. Neither one of yesterday’s events could be construed as bullish.
USDA’s monthly Milk Production report will be released today at 3 p.m. (Eastern). We are looking for a 0.6% increase year over year. If the other producing states can continue to absorb California’s production losses, we should see prices again press lower; the world market offers no bullish news.
Dairy margins were relatively flat over the first half of May, with little change in either milk prices or feed costs since the end of April, according to the latest CIH Margin Watch report from Commodity & Ingredient Hedging, LLC.
The Avian Influenza outbreak continues to grow and leads to more questions about the impact on livestock and meat markets. USDA-APHIS (Animal and Plant Health Inspection Service) reports that the current toll is nearly 34 million birds depopulated.
The United States has lost a battle with Canada and Mexico over its meat labeling rules, the World Trade Organization said on Monday in a ruling that backed calls to scrap the laws or risk costly trade retaliation.