Milk Prices
Through this economic swing between bull and bear markets, risk management becomes paramount to negate volatility.
The CME spot dairy auction saw butter take the dip that most had expected for quite some time.
It certainly has not seemed like there’s been a seasonality to cheese prices this year, but price movement shows otherwise. However, milk futures have not reflected that due to an overall bearishness in the market.
Class III milk futures slid 32 cents lower for the month of December.
Milk continues to struggle to find momentum higher. Here’s where the prices landed today.
Many farmers have not developed a marketing plan to protect milk prices. This leaves the farm open to risk and the possibility of significant financial loss which could put the farming operation in jeopardy.
Class III milk futures markets regained a very small portion of what was lost from Friday.
A shortage of fresh barrel cheese has been driving the inverted price spread.
Forecasters predict milk prices to drop sharply in 2023.
More milk flowed during the summer months than expected, causing the USDA Economic Research Service to lower its all-milk price forecast for 2022 and 2023.
Slower domestic demand is being offset with higher international demand, but that is still not enough to support prices and turn the trend higher.
Milk prices have hit their highest marks since 2014. But the cost of production has eaten into profits. While higher milk prices have sparked encouragement, producers are curious as to how long these prices will last.
Dairy markets found follow through strength on Tuesday following the bounce experienced on Monday.
Milk powder imports hit particularly hard in part due to large current stockpiles
Class III milk futures were mixed on the day. October milk gained 9 cents to $21.94/cwt. November milk eased 20 cents to $20.72/cwt.
Class III milk futures hold steady in September, but October and November prices fall flat.
Global Dairy Trade event #316 took place Tuesday. The index settled 2% higher for the second auction in a row.
According to the latest All-Milk price forecast, economists expect the dairy market to strengthen in the coming year.
Food prices have risen substantially causing consumers to look for ways to stretch their dollar. Dairy products will remain an integral part of the diet, but the volume of purchases might be reduced.
The USDA released its August Milk Production report on Monday. As expected, milk production grew, but at levels that exceeded expectations.
Most dairy products climbed higher Tuesday in the CME spot dairy product auction.
With the holiday baking season knocking on consumers doors, just how long will these elevated butter prices last?
Class III milk rocketed higher though September stayed unchanged at $19.79.
Compared to a year ago, dairy product values are up considerably. Unfortunately, feed costs continue to surge upward as well.
Butter had a good day as it moves to levels we have not visited since September of 2015!
Even with strong export demand and overall domestic demand holding well, there is still too much cheese.
Class III milk futures ended the trading day mixed. October milk added 3 cents to $19.97/cwt. November milk fell 9 cents to $20.60/cwt.
Futures markets added 16 to 45 cents in the 2022 months while 2023 saw Q1 gain 23-30 cents.
A ho-hum spot trade continue to cause milk prices to erode lower.