MILK
Milk futures were finally able to post a nice bounce, which was able to move the November contract back above $19.00. Futures are making a retracement following underlying cash. There is concern cheese prices will have limited upside, but any upside will be welcomed. Milk production has reached its peak in mostly all areas with some dropping back a bit. Other areas may hold production near those peaks for a while as long as weather is mild for cow comfort. Class I fluid milk sales are lower due to schools and colleges closing for the summer. The positive aspect for fluid milk will be the continuation of school food programs during the summer. Each meal available for students will contain a serving of milk. Pressure will be put on Canada in reference to their Tariff Rate Quotas that have been hindering access of U.S. milk and dairy products being imported into the country. U.S. trade officials and dairy industry advocates say a large share of those quotas have been allocated to processors rather than producers. That is not allowable under the agreement of the USMCA, however, Canada holds to the belief that it is. This is why a dispute settlement panel is being formed with the purpose of listening to both sides in order to put this situation to rest. There is no way of knowing how long that will take or how much it will impact our market.
AVERAGE CLASS III PRICES
| 3 Month: | $18.49 |
| 6 Month: | $18.77 |
| 9 Month: | $18.73 |
| 12 Month: | $18.53 |
CHEESE
Many cheese plants report that spot loads of milk are increasing which is requiring them to run through much of this upcoming Memorial Day weekend. Some loads are being offered at a substantial discount in the effort of finding manufacturing capacity. Cheese demand is term as mixed. This likely depends on the variety and the venue being supplied. With heavier cheese production and schools closing soon for the summer, it is doubtful cheese prices will find much upside in the near term.
BUTTER
There is a sufficient supply of milk and cream available for butter production. Some plants are not purchasing extra cream in their attempt to balance their current production and supply with demand. Demand from restaurants is strong and slowly improving. Retail demand has slowed to some extent. Price is expected to move within a range for a period of time.
OUTSIDE MARKETS SUMMARY
July corn gained 4.25 cents, closing at $6.2450. July soybeans declined 8.25 cents, ending at $15.0350, with July soybean meal down $2.50 per ton, closing at $383.80. July wheat declined 8 cents, ending at $6.48.50. June live cattle declined $0.27, ending at $116.45. July crude oil increased $0.17, settling at $65.96 per barrel. The Dow gained 11 points, ending at 34,323 ,while the NASDAQ gained 81 points, closing at 13,738.
