Class III milk futures were on a wild ride this week with strong movement higher during the first half of the week and falling futures during the second half. Class IV futures moved steadily higher throughout the week as strength from butter continued. Support for higher milk prices due to strong gains in corn futures kind of fell apart after the World Agricultural Supply and Demand Estimates report on Wednesday. Corn prices have fallen ever since with July corn falling nearly 80 cents a bushel. This is the kind of volatility we will see much of the growing season for grain, so fasten your seatbelts. Dairy will be just as volatile as perceptions and reality will continue to change. There is no sign of any reduction of milk production planned by farms and, in fact, the opposite seems to be true. Milk production is expected to remain strong with large cow numbers and strong output per cow. USDA raised the production estimate on the report Wednesday supporting that idea. It will be an interesting year.
