Dairy Market Weaker, Steadily Grinding Lower (Audio)

The milk market enjoyed some increased prices over the holidays but now it’s back to trading as usual, according to dairy market analyst Robin Schmahl. He says once the holidays were over the market took a hit and even reached contract lows.

Notable market movement last week includes blocks, butter and non-fat dry milk powder down week over week, while barrels were up a penny.

Schmahl says many factors are affecting the current market including the strong dollar and weak exports.

Listen to Schmahl on last week's Dairy Weekly Market Wrap Up below:

The Global Dairy Trade Auction was down 1.6% earlier this month. “That gives the indication that world prices are not getting any better at this time,” he says. “The bigger thing is that exports continue to struggle and that’s likely to continue for the foreseeable future considering where the dollar is at.”

The value of dairy exports decreased 24% year over year in November and exports are down in each category. Notably in whole milk powder exports fell 72.8% year over year, all hinting at continued weakness, according to Schmahl.

“That is putting everything back into perspective,” he says. “I think we’re going to struggle with prices over the next week, next couple of weeks and maybe even longer based on market fundamentals.”