MILK:
Generally, it has been reported that the peak of milk flush is behind us. However, some reports indicate milk production in the Central Region has still not peaked. In fact, there are reports milk production is holding stronger than expected. Weather has been good for cow comfort and the current cooler weather will delay any impact from heat. This higher level of milk production in the region has resulted in some large discounts for spot milk recently and is running $4.50 to $6.00 below class. The next event on the calendar that could impact milk output is hot summer weather. Until that happens, milk production will continue at a higher level than last year and previous years. Class IV futures are lower due to another decline of nonfat dry milk. Price is back to the lowest level it has been in a little over a month. USDA will release the April Agricultural Prices report on Friday, which is expected to show a substantially lower income over feed price. This will mean a larger payment under the Dairy Margin Coverage program.
Average Class III Prices:
| 3 Month: | $18.32 |
| 6 Month: | $18.65 |
| 9 Month: | $18.66 |
| 12 Month: | $18.48 |
CHEESE:
This week it was reported demand for cheese in the Western Region of the U.S. has slowed across both retail and the food service industry. It is not that demand in general has slowed, but the fact that the food service pipeline had been depleted and has been filled with buying is settling down to maintenance requirements. Cheese production remains strong as milk available for manufacturing is plentiful. More milk will be available on the spot market over the Memorial Day holiday weekend.
BUTTER:
Ice cream production has been absorbing quite a bit of cream, but that has not slowed butter production much, if any. There remains sufficient supply for all manufactured products. Some plants and buyers would like to increase inventory to be prepared for the increase of demand in the fall. This should keep butter price within a range for a period of time with the potential of price to reach $2.00 before the year is finished.
OUTSIDE MARKETS SUMMARY:
July corn jumped limit up, closing at $6.6450. July soybeans jumped 33.50 cents, closing at $15.37 with July soybean meal up $6.50 per ton, closing at $390.30. July wheat jumped 27.75 cents, ending at $6.7625. June live cattle slipped $0.10, closing at $116.30. July crude oil gained $0.64, closing at $66.85 per barrel. The DOW gained 142 points, closing at 34,465 while the NASDAQ slipped 2 points, closing at 13,736.
