MILK
Milk production in the Midwest is holding well as weather has been good for production. This leaves sufficient milk for both bottling and manufacturing. In fact, lower milk production than a year ago is fitting well for processors that have had difficulty finding or keeping a full workforce. Having said that, many plants would like to have more milk to process to meet demand and build inventory. Spot milk continues to be available with reports prices as much as $3.00 below class. Milk output in the West is holding well but there is growing concern over difficulties in receiving sufficient corn and getting it on time. Some indicate having to adjust feed in order to keep cattle fed. Switching feeds more often is impacting milk production. It is difficult to say how long this will continue but costs continue to escalate as fuel prices rise. Cash corn prices increase nearly every day as elevators and buyers want corn to fill demand.
AVERAGE CLASS III PRICES
| 3 Month: | $24.78 |
| 6 Month: | $24.65 |
| 9 Month: | $24.04 |
| 12 Month: | $23.41 |
CHEESE
There are continued reports of slowing demand for cheese from the food service industry. Continued escalating fuel prices are cutting into more of the budget resulting in the reduction of the amount of time spent eating away from home. However, some of this may be made up with higher consumption of cheese in the home. Spot cheese prices have not been able to trend higher but continue to move in a sideways range.
BUTTER
Buyers are thinking twice about being aggressive buyers at the current price level. Price is not expected to fall anytime soon with some stability possibly moving into the market. Higher price may impact demand at the retail level and potentially in the export market. Cream supply has tightened somewhat leaving production steady. .
OUTSIDE MARKETS SUMMARY
July corn closed 8.50 cents higher closing at $7.73. July soybeans jumped 29 cents closing at $17.69 with July soybean meal up $11.90 per ton closing at $427.50. July wheat declined 3.50 cents ending at $10.7125. June live cattle gained $0.22 closing at $137.05. July crude oil declined $0.60 closing at $121.51 per barrel. The DOW fell 638 points while the NASDAQ lost 332 points.
