Milk Prices
Spot cheese prices gave Class III futures a slight boost with Q4 rising to $20.93 per hundredweight
It was green across the board today in Chicago, with the exception of whey.
Class III contracts continued to rebound along with spot cheese.
U.S. cheese exports slid off record highs in June to 86 million pounds.
Milk prices have been increasing, but there is concern stronger prices may not hold through the end of the year.
As the milk supply tightens, milk prices rise, and cheese manufacturing capacity expands, more milk dryers could run light.
Higher unemployment and slower hiring triggered fears of a U.S. recession and sent global markets sharply downward.
Unemployment rose to 4.3% in July, the highest since October 2021.
Tight supplies continue to drive the dry whey market upward.
Crop conditions across the country remain exemplary with 68% of the current corn crop rated good-to-excellent, a slight improvement from last week’s 67%.
The grain market took a tumble with September corn falling back below $4.
USDA’s June Cold Storage report was neutral for butter but bullish for cheese.
It was whey’s turn to shine in Chicago today, as prices elevated to $0.5400 per pound, up a penny to the highest level since June 2022.
USDA pegged U.S. milk production at 18.8 billion pounds in June. That was down 1.0% versus 2023, a bigger drop than anticipated.
Milk production continues to decline as summer weather takes its toll on cow comfort and feed intakes.
Spot cheese prices started the week off with an increase. Crop conditions are holding relatively steady through the dog days of summer.
U.S. exports of nonfat dry milk have been falling since 2020.
Grain futures continue to drop with nearby contracts breaking through key levels.
Milk prices have been better than expected and could remain that way for a while. Lower American cheese production and strong exports should provide further support.
Challenges remain, though, for producers who want to expand.
Dairy cattle slaughter in May totaled 216,100 head, down 22,100 head from April and 33,000 lower than May 2023.
July Class III futures rose today to $19.87 per hundredweight, gaining 12 cents.
U.S. milk production dropped 0.9% year-over-year in May.
Processors directing much of the whey stream to WPC and WPI.
Both international demand for cheese and butter improved in April, moving exports significantly above a year ago. However, there may be no further DMC payments for the rest of the year. Here’s why.
It was another day of green in the cheese market. CME spot prices pushed higher, with block values reaching the highest level since August 2023.
Class III milk finished the day mostly unchanged with June down a penny at $19.77 and July up 7 cents to $20.60.
After years of negative margins, it might just be profitable to raise and sell excess dairy replacement heifers again.
Today’s stout April cheese export data offered a good reminder that competitive U.S. prices can help move the needle on exports.