And we’re off… U.S. tariffs are in full effect with Canada, Mexico and China, contributing to the already heavy atmosphere. This morning’s dairy spot action confirmed the futures, with sellers willing to offer spot loads of cheese and butter at considerably lower prices. We are still waiting for a response from Mexico, the largest U.S. dairy importer. Mexico is expected to release that information this Sunday, but should they decide to be aggressive with the counter, U.S. prices might need to fall even more to find international demand. Growth in U.S. milk production and cheese processing with a strained export market has Class III vulnerable.
Today’s Highlights from Ever.Ag’s Know Your Markets
- New tariff news added to the overall bearish tone in CME cheese. The block market plunged to $1.6050 per pound, an 11.5-cent loss, while barrels dropped to $1.7300 per pound, $0.0525 lower. Eleven lots of blocks and one of barrels changed hands. Meanwhile, ample cream continues to put pressure on spot butter, which fell 9.5 cents to $2.2500 per pound, the lowest price since December 2021. Three lots traded. Spot NDM also declined, easing by $0.0125 to close at $1.1800 per pound, with two lots exchanged.
- Milk powders slipped, while butter and cheese climbed at this week’s GlobalDairyTrade auction. SMP eased 0.4% to $1.24 per pound and WMP declined 2.2% to $1.84. Butter advanced 2.7% to $3.44 per pound (adjusted to 82% butterfat). On the cheese side, cheddar rose 1.1% to $2.23 per pound and mozzarella jumped 7.9% to $2.03.
- According to USDA’s latest Dairy Products report, US NDM stocks jumped to 299.3 million pounds in January, up 16.9% (+43.2 million pounds) on the month and +41.0% (+87.0 million pounds) year-over-year. Combined NDM+SMP production totaled 189.1 million pounds, up 4.1% (+7.5 million pounds) versus December, but down 3.2% (-6.2 million pounds) on the year. Cheese output rose slightly on a yearly and monthly basis and butter production also remained above prior-year and prior-month levels.
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