MILK
Now that the market seems to be settling out with cheese prices chopping in a range and butter price holding at a higher level, milk futures may hold in a range. Class III milk futures show prices above $20.00 through April 2023 before dipping below that level. Class IV futures show prices above $20.00 through September 2023. Those are good prices historically, but not good prices under current market conditions. It is difficult to say what direction milk prices will move in the near term. One would like to believe buyers would take advantage of lower prices to increase ownership but with more than enough already on hand, it reduces the need to be aggressive. The New Borden company that purchased the Dean facilities in Chemung, Illinois. and De Pere, Wisconsin, when Deans went bankrupt is now going through another change. New Borden shut down the plant in Chemung and reduced the De Pere plant to sour cream production only as of July 9. This not only reduces manufacturing capacity but also reduces some of the competition for bottling in the Midwest. This is not a positive event as it moves more bottling into the hands of a few. USDA will release the World Agricultural Supply and Demand report tomorrow which will show estimated milk production, milk prices and dairy product prices for this year and next year as part of the report. The main focus of the report will be on grain production and expected ending stocks.
AVERAGE CLASS III PRICES
| 3 Month: | $22.17 |
| 6 Month: | $22.17 |
| 9 Month: | $21.68 |
| 12 Month: | $21.23 |
CHEESE
Cheese prices may carve out a range at the current level. Buyers do not see the need to become aggressive as there is sufficient supply for demand. Sellers want to continue to move production rather than let it build up. No one wants to hold back supply with the expectation that prices will firm anytime soon. Milk production is lower than a year ago but with reduced fluid milk consumption, cheese production continues to remain in line with a year ago.
BUTTER
Supply and demand seem to be balanced with price fluctuating around the $3.00 level. Higher prices at the retail level may limit further price gains. Lower inventory may provide solid support for the foreseeable future. Class IV futures will remain strong with the support of butter.
OUTSIDE MARKETS SUMMARY
July corn closed 3 cents higher at $7.8125. July soybeans gained 10.75 cents ending at $16.41 with July soybean meal up $4.50 per ton closing at $482.90. July wheat fell 35.50 cents closing at $8.43.75. August live cattle gained $2.20 closing at $136.15. August crude oil declined $0.70 closing at $104.09 per barrel. The DOW declined 164 points ending at 31,174 while the NASDAQ fell 263 points closing at 11,373.
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