MILK:
Class III futures closed either near or slightly higher than a week ago. That has not been seen very often recently. We should not read too much into that, as underlying cheese prices did not move very much. There is more concern being voiced over low milk prices and high feed prices. If it continues along this trajectory, it will become very difficult for many to cash flow. Feed prices may not move too much lower than they already have as a result of damage to shipping in the Gulf. This will be repaired and shipping will again resume, requiring more grain to fill demand. Those who benefit from the Dairy Margin Coverage program will not feel quite the sting as others who cannot. But it still will be difficult. The fact that milk prices have not been able to increase seasonally raises concern over how much upside will be possible for prices. There is not much on the horizon to suggest a tight market or a substantial increase in demand. Overall milk production is projected to remain strong.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.86 |
| 6 Month: | $17.07 |
| 9 Month: | $17.19 |
| 12 Month: | $17.29 |
CHEESE:
For the week, blocks declined 1.50 cents with four loads traded. Barrels declined a penny with 16 loads traded. Dry why declined 1.50 cents with two loads traded. Maybe the price weakness is slowing. USDA released the July Dairy Products report which showed cheese production above year earlier levels. American cheese production totaled 464 million pounds which was 2.3% above a year ago. Italian type cheese production totaled 484 million pounds or 6.5% above a year ago. Total cheese output reached 1.5 billion pounds, which was 3.5% above July 2020. Dry whey production totaled 80.8 million pounds, down 2.3% from a year ago. The positive aspect seen here is that higher cheese production was absorbed with inventory also decreasing during the month.
BUTTER:
Butter production during July totaled 152 million pounds, down 0.8% from a year ago. Nonfat dry milk production totaled 157 million pounds, down 5.3% for July 2020. Skim milk powder totaled 51.1 million pounds, down 16.8% from a year ago. For the week, butter increased 9 cents with 28 loads traded. Grade A nonfat dry milk increased 4.75 cents with 16 loads traded.
OUTSIDE MARKETS SUMMARY:
September corn declined 8.25 cents, closing at $5.08. September soybeans gained 3.75 cents, closing at $12.83 with September soybean meal gained $3.00 per ton, ending at $340.90. September wheat gained 10.50 cents, closing at $7.1450. October live cattle fell $1.25, ending at $124.80. October crude oil declined $0.70, ending at $69.29 per barrel. The DOW declined 75 points, closing at 35,369 while the NASDAQ gained 32 points, closing at 15,364.
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