Milk Prices
Looking back on the past year, we see price improvements in all categories.
Class III milk, which was 20 cents higher in the early trade, extended its gains for February through April.
The Class III market ended the week on a positive note, settling higher through most of the first half.
Class III futures started off the new year with a pop this morning.
On the heels of the CME cheese jump, the January Class III contract climbed to $20.43 per hundredweight, tacking on 31 cents.
Continued lower milk production could significantly change the fundamental outlook of the market. However, the current milk supply is sufficient, leaving buyers comfortable with the current supplies. Dairy cattle slaughter continues to decline.
Following a slow performance in the spot market yesterday, today’s trading saw a bit more activity ahead of the early market close.
In less than two years, dry whey prices have rallied from their all-time low.
Class III futures turned red today on the heels of a quiet spot cheese session.
Today’s spot market witnessed another solid performance on the cheese front, with prices rising to the highest levels in more than a month.
Class III futures continued to climb, taking the lead from the spot cheese markets.
After spending the week gradually easing lower, the CME butter market tumbled six cents to close at $2.4650 per pound.
Supported by upward momentum in spot cheese and whey, Class III and cheese futures jumped.
Some recovery in Class III futures has come just in time for the Q1 2025 DRP deadline on Friday.
Dry whey prices remain buoyant, rising to 73 cent per pound.
Whey led the rally in Class III last week and came out of the gate strong with bids this morning, giving Q1 Class III futures contracts an early pop back over $19.50.
What a week in the Class III market, driven by a nice run higher in both CME cheese and whey futures.
It’s not very often that whey takes the lead story, but it’s had main character energy this week.
CME cheddar markets continued yesterday’s climb. Blocks advanced to $1.7000 per pound, adding three cents, while barrels rose to $1.6675, $0.0175 higher.
Today’s spot market showed mostly positive activity, with cheese prices making notable gains.
CME cheese markets continued to lose ground, with both blocks and barrels reaching the lowest levels since April.
Output remains variable across Europe’s largest milk-producing regions. Germany’s production dipped 1.8% year-over-year in September, while output in the Netherlands dropped 2.6%. Production in France, on the other hand, rose 3.2% on the year.
After being on the decline, CME cheese prices ended the week on a rise.
International Dairy Foods Association analysis suggests that the average gallon of milk will only increase by 11 cents.
USDA reported more milk is coming online ahead of new plant openings, leaving some milk without a home in some regions and leading to a wide price spread of -$3.00 to +$3.00.
The food index increased 0.2% month-over-month with grocery store prices ticking up 0.1% and food away from home prices gaining 0.2%.
USDA AMS announced its Final Decision on changes to the Federal Milk Marketing Orders, making only minor adjustments from the Recommended Decision in July.
Butter sales jumped 23% year-over-year.
High cheese prices and declining feed costs have finally dealt dairies a winning hand.
Butter production in September totaled 159.2 million pounds, up 11.3%