MILK
Milk supply is decreasing seasonally, and due to hot weather. However, there is sufficient supply for demand. Even with more milk moving to the Southeast in a few weeks reducing the amount available for manufacturing, buyers of dairy products are not concerned over milk availability. Reduced milk available for manufacturing may be positive this year and could at least support milk prices. That certainly had not happened yet even though milk prices are substantially lower than they were not too long ago. Milk prices through the rest of the year will be determined by demand. Buyers had purchased ahead with no reason to be aggressive now unless they see demand reducing inventory more than expected. Spot milk is tighter with prices not as discounted as they had been but remains available. That is likely to change over the next few weeks as more milk will move to the Southeast as bottlers prepare for schools to reopen. September Class III milk fell below $20.00 today and the lowest level it has been since December 23, 2021. The rest of the contracts this year remain above $20.00. USDA will release the Agricultural Prices report tomorrow providing average prices used to calculate income over feed.
AVERAGE CLASS III PRICES
| 3 Month: | $20.85 |
| 6 Month: | $20.57 |
| 9 Month: | $20.15 |
| 12 Month: | $19.90 |
CHEESE
There are some reports that domestic cheese sales are below previous forecasts. Some places indicate a little slowing, but overall demand is holding well. This may depend on variety and location. The higher price of food is having an impact on demand for certain food categories. Even though cheese prices have fallen, retail prices remain high as all food prices have increased for various reasons. Thus, there is no immediate impact from lower prices at the farm or manufacturing level delaying the increase of demand which is the reason for lower prices.
BUTTER
Hot weather is reducing component values of milk thereby reducing cream supply. This is also impacting cheese yields. Cream is available with churning receiving as much as they need. Labor and trucking issues continue to plague the industry. This has kept most plants from running at full capacity. This is not likely to change anytime soon. Spot butter price fell back after nearly reaching the $3.00 level keeping price within a range.
OUTSIDE MARKETS SUMMARY
September corn jumped 14.75 cents closing at $6.15. August soybeans jumped 30.50 cents ending at $16.0925 with August soybean meal up $0.80 closing at $489.70 per ton. September wheat gained 26.75 cents closing at $8.17. August live cattle declined $0.62 closing at $136.17. September crude oil declined $0.84 closing at $96.42 per barrel. The DOW gained 332 points closing at 32,530 while the NASDAQ gained 130 points closing at 12,163.
