Tuesday Closing Dairy Market Update - July Exports Up 7.2%

MILK:

October Class III futures posted the largest gain with price closing at the highest level since Aug. 16. Class IV futures extended their gains with prices reaching the highest level since mid-June. Class IV futures have been increasing without much fanfare as most of the focus has been on cheese prices rather than butter and nonfat dry milk prices. Moving both Class III and Class IV prices closer together should eliminate the negative Producer Price Differentials that has plagued the market since early last year. All schools are back in session for the year which increases the demand for fluid milk. Whether schools will continue as they are or if the surge in COVID-19 cased with provide further disruptions remains to be seen. Dairy exports continue to do well. Total exports for July increased 7.2% from the previous year totaling 195,029 metric tons. This is nearly 50 metric tons more than July 2019. The total value of those exports reached $667.9 million, nearly $200 million more than July 2019. This is even with exports being hindered to some extent by labor and logistical problems as a result of COVID-19.

AVERAGE CLASS III PRICES:

3 Month:	$17.22
6 Month:	$17.35
9 Month:	$17.41
12 Month:	$17.48

CHEESE:

Barrel cheese narrowed the gap and may continue to narrow the gap now that there may be more focus on fall and holiday demand. Export demand in July was strong with cheese exports up 26.8% totaling 36,804 metric tons. Dry whey exports increased 17.8% over the previous year at 53,384 metric tons. The positive aspect of these exports is that they are above a year ago and quite a bit above July 2019. Exports have been increasing nicely throughout the whole COVID period.

BUTTER:

Price has been in a nice overall uptrend which has been supported by continued strong exports. Butterfat exports in July totaled 4,764 metric tons, up 86.1%. This is nearly four times greater than exports in July of 2019. Whole milk powder exports increased 29.8% totaling 4,052 metric tons. Skim milk powder/nonfat dry milk exports slipped 3.1% totaling 72,990 metric tons.

OUTSIDE MARKETS SUMMARY:

September corn fell 12.25 cents, closing at $4.9575. September soybeans fell 14.25 cents, ending at $12.6875, with September soybean meal down $3.60, closing at $337.30 per ton. September wheat declined 5.75 cents, ending at $7.0875. October live cattle fell $1.47, closing at $88.10. October crude oil lost $0.94, closing at $68.35 per barrel. The Dow fell 269 points, closing at 35,100, while the NASDAQ gained 11 points, closing at 15,374.