Tuesday Closing Dairy Market Update - GDT Declined 1.3%

MILK:

Milk futures took a hit Tuesday due to the weakness of spot dairy prices. Both Class III and Class IV futures suffered double-digit losses in numerous contracts. This was a bit of a surprise to many as the strength in early May was expected to carry through due to the potential for reduced milk production because of high feed prices. That concern ran its course with the market settling down to focus on supply and demand. The Global Dairy Trade Action took place Tuesday with the trade weighted average decreasing 1.3%. This is the fifth consecutive event showing a decline. Anhydrous milk fat price increased 0.6% to $5,687 per metric ton (mt) or $2.58 per pound. Butter declined 1.7% to $4,612 mt or $2.09 per pound. Cheddar cheese price increased 0.2% to $4,328 mt or $1.96 per pound. Lactose increased 0.4% to $1,240 mt or $0.56 per pound. Skim milk powder declined 1.7% to $3,356 mt or $1.52 per pound. Whole milk powder declined 1.8% to $3,997 mt or $1.18 per pound. Buttermilk powder was not offered at this event.

AVERAGE CLASS III PRICES:

3 Month:	$17.45
6 Month:	$18.03
9 Month:	$18.07
12 Month:	$18.03

CHEESE:

The decline in barrel cheese price was not very much, but the weakness the past two days has had a substantial impact as it indicated the market is not ready to move higher on a consistent basis. Barrels seem to be in greater demand, but the fact that Tuesday no buyers showed up may indicate some of the immediate demand may be satisfied. More milk moving to cheese production is keeping sufficient supply available to the market.

BUTTER:

Butter remains competitive on the world market with exports in April up 257.0% compared to April 2020. That is not just because of the disruption of movement from COVID, but just good solid demand. The reason I say this is because April exports were far above the level in April 2019 which were actually lower than they were in 2020. Year-to-date exports are running 146.1% above the same period last year.

OUTSIDE MARKETS SUMMARY:

July corn gained 8.25 cents, closing at $6.6750. July soybeans declined 6.50 cents, ending at $14.6575 with July soybean meal down $1.50 per ton, closing at $372.40. July wheat fell 13 cents, ending at $6.6150. June live cattle jumped $1.85, closing at $121.22. July crude oil jumped $1.24, ending at $72.12 per barrel. The DOW declined 94 points, closing at 34,299 while the NASDAQ declined 101 points, ending at 14,073.