MILK:
August Class III futures slipped below $17.00 Monday as pressure mounted due to the decline of cheese prices. It is becoming more evident that milk production is not going to decline anytime soon. The May Milk Production report showed milk production in the top 24 states up 4.6% compared to May 2020 totaling 18.9 billion pounds. Milk production for April was revised higher increasing production by 0.2%. Production per cow averaged 2,107 pounds or 63 pounds per cow above May 2020. Cow numbers totaled 8.99 million head, 152,000 head more than a year ago and 5,000 head more than April. Milk production in the U.S. was 4.6% higher than a year ago. Milk production per cow averaged 2,088 pounds, up 61 pounds over a year ago. Cow numbers totaled 9.505 million head. This was 145,000 head more than a year ago and an increase of 5,000 head more than the previous month. A completely accurate comparison cannot be done due to the factors of last year and far as milk production per cow as farms were ordered to cut back on production quickly or be paid much less for the extra milk. Cows were dried off early and in some cases production per cow was impacted as some farms opted to reduce output per cow which in turn reduced milk production. However, cow numbers can be compared as they are what they are. These cows are all producing milk and producing it at an incredible level. Cow numbers dipped last year by 17,000 head from April to May but have since come back with a vengeance. There were only three states of the top 24 states which showed declines. Virginia declined 2.3%, Washington declined 0.9% and Arizona was down 0.5%. The rest of the top 24 states showed significant increases in production.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.92 |
| 6 Month: | $17.60 |
| 9 Month: | $17.74 |
| 12 Month: | $17.77 |
CHEESE:
Cheese prices do not seem to have found a bottom. Sellers continue to offer it to the spot market. There was a report that a cheese facility is running at capacity and has a lot of cheese they need to move to the market as quickly as they can. There is continued concern over some of the low bids that show up during spot barrel trading. This could indicate where price will find support. Buyers are just letting it come to them.
BUTTER:
Butter turned a blind eye to what took place in the spot market for cheese and nonfat dry milk. Demand is strong enough both from domestic and international buyers, keeping price within a range. This is expected to continue as supply and demand remains balanced.
OUTSIDE MARKETS SUMMARY:
July corn gained 4 cents, closing at $6.5925. July soybeans gained 19 cents, ending at $14.15 with July soybean meal down $0.30 per ton, closing at $372.10. July wheat declined 1.25 cents, closing at $6.6150. June live cattle slipped $0.07, ending at $120.97. July crude oil jumped $2.02, closing at $73.66 per barrel. The DOW jumped $587 points, closing at 33,877 while the NASDAQ gained 111 points, closing at 14,141.
