Milk Prices
The latest USDA Milk Production Report reveals the true impact HPAI has had on dairies.
CME cheese markets tumbled well off recent highs ahead of USDA’s July Cold Storage report.
Class III futures closed in the red, with Q4 settling at $21.23 per hundredweight, down 46 cents.
Butter and cheese prices break out of the trading ranges to reach prices not seen in a while. Fall and holiday demand has kicked into gear as buyers look to Fall and holiday demand.
After last week’s fireworks, CME markets got off to a relatively quiet start this week.
Butter had the third-heaviest trade week in history, with 103 loads exchanged.
Lower milk solids could mute the impact of faltering sales.
Spot butter trades reached a new record, with 51 loads changing hands – the heaviest single day since daily trading began in 2006.
After spending the last two days jumping to new year-to-date highs, CME cheese markets slowed their climb today.
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.
The U.S. dairy industry is poised on the brink of significant growth, as illustrated by Farm Journal’s State of the Dairy Industry report.
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.
Fewer cows went to their local sale barns in the month of June compared to months prior.
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.
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.