Milk Prices
This week, USDA released the Dairy Products report for November.
Cheese values continued their ascent higher on Thursday following Monday’s announcement of the extension to a fifth round of the food box program.
$1.5 billion is earmarked for another round that will provide nonprofits with food boxes that will contain 5-6 pounds of Cheese, yogurt, butter, cream cheese, or sour cream.
Class III milk futures traded higher only to change directions as we moved through the spot cheese trade.
COVID-19 and government programs have been two main catalysts for volatility in 2020. However, 2021 is expected to have many challenges that may keep volatility high.
The Grinch returned to the cheese markets Thursday as Markets closed early for the Christmas Holiday.
Class III milk turned in another interesting trade on Wednesday as futures markets traded as high as the limit of $1.50/cwt before decreasing and settling near 75-80 cents stronger in January and February.
Government intervention creates a level of uncertainty that makes a 2021 milk price forecast nearly impossible.
Historically large butter inventories would be even larger without consumers’ embrace of high-fat dairy products.
Today’s green on the CME started with stimulus talk and was fed by another positive move in the Global Dairy Trade Event.
Futures once again sold off late in the session after showing initial strength. December gained 1 penny to $15.80.
A stronger open across the forward curve was seen early and peaked after the CME spot dairy auction at limit up in Q1 2021.
First half 2021 ended the session with an average north of $17 while second half prices are now pushing $17.40/cwt.
Green lit up the commodity markets on Wednesday.
Products across the board were neutral to modestly higher Tuesday in the CME Cash Dairy Product Trade.
Policy analysts agree direct payments at 2020 levels are unlikely to continue under the Biden Administration.
Class III milk futures soared to follow up Friday’s USDA solicitation announcement purchases on both butter and fluid milk.
Class III milk started the day higher, buy lost steam into the end of trading.
Whey and Butter find a spark to support Class III milk and drive Class IV higher following a positive Global Dairy Trade.
A stronger CME spot dairy product trade was met with a lower Class III trade on Wednesday but slightly higher Class IV trade.
Dairy markets quietly slid lower after a mixed CME spot trade.
Enrollment for the Dairy Margin Coverage (DMC) program closes Friday, December 11, 2020.
Class III milk prices traded 40 cents stronger on Friday in December and reached back up to $16.00/cwt.
With this holiday season looking to be a little different than normal, fewer holiday get-togethers are expected to bring down the demand for one of dairy’s most popular products.
The USDA October milk production report released this week shows U.S. milk production reached nearly 18.6 billion pounds, up 2.3% from 2019.
Over the last several months there has been a large uptick in home baking and cooking, which has caused butter consumption to rise tremendously.
After three years of discussions, the largest producer of milk in the country is finally joining the Federal Milk Order.
Wild price swings and new record highs have been dominated market activity during the first half of the year.