MILK
Milk production is decreasing off farms, but there continues to remain sufficient supply to meet bottling and manufacturing demand. In the Northeast region, balancing plants are full, with cheese plants receiving heavy milk supplies. Without a significant impact on milk production because of the hot weather, drought and high feed prices, there seems to be nothing that will adversely affect milk production in the foreseeable future. Class III futures were hit again Wednesday with selling pressure extending through much of the 2022 contracts. One year ago, cheese prices were crashing after first reaching record highs. Those highs were the result of the Farm to Families Food Box program. There is no such program now, and there is no provision or discussion of any such program. Support for milk prices can only come from the supply and demand of the market, and right now, there is plenty of supply. Demand is strong, but not strong enough to tighten supply.
AVERAGE CLASS III PRICES
| 3 Month: | $16.46 |
| 6 Month: | $16.94 |
| 9 Month: | $17.08 |
| 12 Month: | $17.18 |
CHEESE
Barrels are the weaker category of the cheese complex. It is interesting to note that, last week, there were some reports that indicated barrel cheese supply was tighter than the current market indicated. That certainly has not been the case this week as barrels have been unable to find a bottom. Buyers have no interest or need to become aggressive in the spot market. Spot milk in the Midwest is available at prices around $5 under class. This does not make for a market that will tighten anytime soon.
BUTTER
Butter price continues to slide lower as churning seems to be keeping up with demand. Some plants are selling cream rather than churning to limit inventory growth. This adds to the cream supply, keeping buyers and manufacturers sufficiently supplied. Both retail and food service demand are steady with sales near expectations for this time of year. Weekly cold storage in selected surveyed warehouses show inventory remaining virtually unchanged for the month of July.
OUTSIDE MARKETS SUMMARY
September corn closed 0.50 cent higher at $5.4925. August soybeans jumped 13.75 cents, ending at $14.32, with August soybean meal down $2.70 per ton, closing at $356.10 per ton. September wheat jumped 14.25 cents, closing at $6.8875. August live cattle gained $0.15, closing at $123.07. September crude oil gained $0.74, closing at $72.39 per barrel. The Dow declined 128 points, closing at 34,931, while the NASDAQ gained 102 point, ending at 14,763.
