Markets
As the snow blows into the Midwest, dairy has another quiet day but shows some green.
Barrels were the lone product to claw higher in the CME Cash Dairy Product Trade
Major dairy exporting regions show positive milk production growth in 2020.
Dairy markets ended in the green on Tuesday after a positive Global Dairy Trade (GDT) event as well as a stronger CME spot dairy auction.
Butter continues its struggle, hits a new low.
Farmers across the country are being asked to dump their milk, as food service demand crumbled rapidly due to COVID-19. Still, farmers are frustrated that consumers can’t buy as much milk as they want right now.
Class III futures traded quietly for the second day in a row.
Class IV traded 30-35 cents lower in the second quarter of 2021.
Both cold storage and milk production were released Monday.
Class III milk futures were finally able to see green ink to end the week.
February Class III milk prices suffered another 70-cent fall with settlement coming in around $16.45/cwt.
The dairy market failed to get cheese to follow through on last week’s gains and gave back some of the late-week rally.
Last year was the most volatile year on record when it comes to milk prices.
A move lower in cheese on Friday was ignored by the Class III milk markets.
Volatility continues to dominate the markets in both the dairy and grain complex.
Tuesday’s trading session proved to be a tough day for unhedged dairy producers.
Class III futures ended the day mixed after showing initial strength mid-morning.
Despite the sharp drop in foodservice demand, demand for high-fat dairy products has held up.
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.
With milk prices predicted to remain extremely volatile during the first few months of 2021, producers are anxious to know what to expect when the feed bill hits the mailbox.
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.