Wednesday Midday Dairy Market Summary - Blocks Slip Further

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	1 Higher
SOYBEAN MEAL:	$0.50 Higher
LIVE CATTLE:	$0.27 Higher
DOW JONES:	169 Points Lower
NASDAQ:	58 Points Lower
CRUDE OIL:	$0.92 Lower

MIDDAY MARKET UPDATE:

Block cheese price declined with a loss of a penny and price closing at $1.42 with 14 loads traded. It is amazing that sellers continue to remain aggressive and willing to move product rather than holding back a bit to wait for price to improve. Price did bounce from the low of $1.4150, but that had little influence on the market. Barrel cheese price increased 0.25 cent with 11 loads traded. There were five unfilled bids for blocks and one unfilled bid for barrels remaining at the close. Dry whey price slipped 0.50 cent, closing at 27 cents with 11 loads traded. There were unfilled bids and one uncovered offer remaining at the close. Class III futures are 28 cents lower to 1 cent higher with September showing the greatest loss. Butter price increased 2.50 cents, closing at $2.4550 with one load traded. There was one unfilled bid remaining at the close. Grade A nonfat dry milk price declined 0.75 cents closing at $1.1550 with one load traded. Class IV futures are one cent higher to 2 cents lower. Butter futures are 0.47 cent lower to 1.72 cents higher. Dry whey futures are 0.37 to 1.52 cents lower. Wednesday is the last day to trade May futures and options. USDA will release the April Agricultural Prices report today.

Wednesday Morning Dairy Market Update - Not Much Support Expected

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	8 to 10 Lower
Soybean Futures:	15 to 19 Lower
Soybean Meal Futures:	$3 to $4 Lower
Wheat Futures:	12 to 15 Lower

MILK:

It is difficult to find anything supportive in the dairy markets within their own fundamentals. However, support could be seen over time as the government has posted a solicitation for cheese for food banks and schools that could total 47 million pounds over time. This will not take place all at once but will be solicited over time and in multiple solicitations. Parts of this are likely some of the usual purchases they make with some being an addition to the usual. This would utilize quite a bit of cheese that is available to the market over and above regular demand. This was posted last week and did not impact the market. We cannot expect this to provide support anytime soon. USDA will release the April Agricultural Prices report Wednesday, which will provide prices used in the calculation of income over feed for the Dairy Margin Coverage program.

CHEESE:

It is likely buyers will not be very aggressive Wednesday. Lower bids will likely be placed at the beginning of spot trading as buyers will see if sellers remain aggressive. Cheese is readily available to the market, leaving buyers complacent.

BUTTER:

Nothing much is expected during spot trading today as the price remains entrenched in a sideways pattern. Demand is steady. Production remains strong as cream is available. However, cream supply should be tightening as ice cream production increases and summer weather impacts butterfat production.

Tuesday Closing Dairy Market Update - Milk Futures Show Mostly Red

MILK:

New lows in Class III futures are concerning. If the June price comes to fruition, it will be the lowest Class III price since May 2020 when COVID sent the market plummeting. Now, there is no dramatic event or unexpected influence impacting the market. It is a matter of supply and demand in a market that has changed because of the current financial environment and world environment. Buyers of cheese and not interested in purchasing aggressively at this time of year and are not aggressive due to the desire to minimize inventory rather than pay for storage any earlier than necessary. Milk supply is sufficient and remains higher than last year with spot milk remaining significantly below class. Wednesday is the last trading day for May futures and options with the Federal Order prices announced Thursday. They are delayed one day due to the holiday on Monday.

AVERAGE CLASS III PRICES:

3 Month:	$16.01
6 Month:	$17.01
9 Month:	$17.51
12 Month:	$17.65

CHEESE:

Block cheese price has fallen to the lowest level it has been since May 11, 2020. At that time, price was on the rebound after reaching a low of $1.00 in mid-April due to the impact of COVID. There is no indication of a bottom for prices at the present time. Cheese used as ingredients for pizza and other foods is substantially lower in price than a year ago, but that is not being passed on to the consumer as prices for these foods continue to remain high or in some cases are increasing. End users are using this extra income to pay for higher wages and to increase profitability. Demand has not increased significantly but has been rather steady.

BUTTER:

Watching the butter market is about like watching paint dry. Price continues to remain rather stable moving within a narrow price range. Buyers have been able to purchase supply for immediate demand as well as upcoming demand without having to chase the market. Production is keeping up with demand, leaving the market well supplied.

OUTSIDE MARKETS SUMMARY:

July corn closed down 10.00 cents per bushel at $5.9400, July soybeans closed down 40.75 cents at $12.9650 and July soybean meal closed down $9.60 per ton at $392.60. July Chicago wheat closed down 25.00 cents at $5.9100. August live cattle closed up $2.00 at $167.18. July crude oil is down 3.00 per barrel at $69.67. The Dow Jones Industrial Average is down 51 points at 33,043 with the NASDAQ is up 42 points at 13,017.

Tuesday Midday Dairy Market Summary - Blocks Fall to Multi-Year Low

OUTSIDE MARKETS SUMMARY:

CORN:	11 Lower
SOYBEANS:	41 Lower
SOYBEAN MEAL:	$8.10 Lower
LIVE CATTLE:	$1.22 Higher
DOW JONES:	157 Points Lower
NASDAQ:	28 Points Higher
CRUDE OIL:	$3.43 Lower

MIDDAY MARKET UPDATE:

Spot trading began as usual with lower bids being placed when spot trading began. The buyers held these lower bids waiting for sellers to offer prices lower. They were not disappointed as sellers of blocks continue to lower offers to move product. Block cheese price declined 4.75 cents closing at $1.43 with 8 loads traded. There was an unfilled bid remaining with no uncovered offers. This moves block price back to the lowest level it has been since May 11, 2020. Barrel cheese price increased 0.50 cent closing at $1.4950 with one load traded. There was an unfilled bid and uncovered offer remaining at the close. Dry whey price remained unchanged at 27.50 with no loads traded. Class III futures are unchanged to 36 cents lower with June showing the greatest loss. Butter price remained steady at $2.43 with no loads traded. Grade A nonfat dry milk price declined 0.75 cent closing at $1.1675 with 2 loads traded. Class IV futures are mixed from 22 cents lower to 7 cents higher. Butter futures are 1.15 cents lower to 0.72 cent higher. Dry whey futures are 1.50 cents lower to 0.62 cent higher.

Tuesday Morning Dairy Market Update - Mixed Price Activity Expected

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 3 Lower
Soybean Futures:	10 to 14 Lower
Soybean Meal Futures:	$4 to $5 Lower
Wheat Futures:	6 to 8 Lower

MILK:

Class III futures were surprisingly active with June showing the most activity and the greatest price swing. June futures ranged from $15.74 to $16.06. There has been no change in fundamentals over the weekend that would indicate any price direction. It is possible block cheese falling back and eliminating the gains of early last week might uncover some buying interest again like last time. However, the milk supply is strong with plenty available for processing. Schools are closed and will be closing soon, leaving more available for manufacturing, which could put pressure on prices.

CHEESE:

Cheese price had weakened in the last half of last week, putting them back to where the price rally began. It is possible the pattern could be repeated, and buyers may take advantage of the lower prices. With sufficient supply available to the market, upside potential will be limited.

BUTTER:

There is not much to say about butter as it is likely to continue the pattern so far this year. Buyers and sellers are comfortable doing business in the current price range. Supply is readily available. Current inventory is running above a year ago.

Culling rate 4.5% above last year

CME cheese prices continued to fall the third week of May as traders anticipated the April milk production report Friday afternoon. Cheddar block fell to $1.47 per pound Monday, lowest price since June 9, 2021, climbed back to $1.54 on Wednesday but closed Friday at $1.5350, up a half-cent on the week, ending seven weeks of decline, but is 84.50 cents below a year ago.

The barrels fell to $1.4425 Thursday, lowest since Sept. 7, 2021, but rallied to a Friday finish at $1.47, 2 cents lower on the week, 87.75 cents below a year ago and 6.50 cents below the blocks. Sales totaled 35 cars of block and 54 of barrel.

Cheese demand varies and the type of customer is part in the equation, said Dairy Market News. Cheesemakers who supply regional chain and individually owned restauranteurs say inflation has put pressure on those businesses. Retail cheesemakers are reporting generally steady demand, in some cases year-over-year improvements. Milk availability is a growing concern, particularly for handlers. Spot milk prices remain at previous levels, as low as $11 under Class at mid-week, compared to $2.50 under Class to 75 cents over a year ago.

Retail and food service cheese demand remains strong to steady in the west. Export demand is mixed. Some contacts indicate good demand from Asia, Mexico and South America, while others indicate lighter demand. Plentiful milk is keeping cheese production strong to steady, said DMN.

Cash butter closed Friday at $2.46 per pound, up 6 cents on the week but 39 cents below a year ago, with nine sales put on the board this week.

Butter plants report atypical demand upticks as year-over-year reports are showing improvements in retail. Food service orders are seasonally in line to quieter. Cream is available for churning and multiples are at similar levels to previous weeks. Some are turning cream away, as they are at or near capacity.

Western cream is plentiful but cream multiples moved higher this week. Planned equipment maintenance in June caused a few butter plants to reduce their cream intake. Some report output is limited due to personnel shortages. Retail and food service butter demand is strong to steady and export demand is steady.

Grade A nonfat dry milk fell to $1.1525 per pound Thursday and stayed there Friday, lowest since April 18, 1.75 cents lower on the week, and 64.75 cents below a year ago, with nine sales reported.

Dry whey closed 3.75 cents lower on the week, at 26.50 cents per pound, lowest price since March 13, 2018, the second day that whey started trading at the CME, and is 24.25 cents below a year ago. Seventy-five loads were sold on the week, highest weekly total since the week of Sept. 30, 2019.

The U.S. Department of Agriculture lowered its 2023 milk production estimate in its latest World Agricultural Supply and Demand Estimates report, citing a larger expected cow inventory but slower output per cow. The report also gave a look at 2034.

2023 production and marketings were estimated at 228.6 and 227.6 billion pounds, respectively, down 100 million pounds on production from a month ago, but unchanged on marketings. If realized, 2023 production would be up 2.1 billion pounds, or 0.93%, from 2022.
2024 production and marketings were estimated at 230.8 and 229.8 billion pounds, respectively, up 2.2 billion pounds on both from 2023. If realized, 2024 production would be up 0.96% from 2023 and marketings would be up 0.97%.

Based on expected changes in component prices, 2023 Class III milk prices were lowered while Class IV prices were raised. The Class III average was projected at $17.75 per hundredweight, down 50 cents from last month’s estimate, and compares to $21.96 in 2022 and $17.08 in 2021. The 2024 average was projected at $17.50.

The 2023 Class IV average was estimated at $18.30, up 20 cents from a month ago, and compares to $24.47 in 2022 and $16.09 in 2021. The 2024 average is projected at $17.35.
The 2024 milk estimate was driven by gains in milk per cow and an additional milking day, according to the WASDE. The Class III price was forecast lower on weaker whey prices. The Class IV was forecast lower as well, with prices for butter and nonfat dry milk projected lower.    

This month’s corn outlook is for larger production, greater domestic use and exports, and higher ending stocks. The corn crop was projected at a record 15.3 billion bushels, up more than 10% from last year on increases to both area and yield. The yield projection is 181.5 bushels per acre. With beginning stocks up slightly, total corn supplies were forecast at 16.7 billion bushels, the highest since 2017-18, according to the WASDE. Total U.S. corn use was forecast to rise about 5% relative to a year ago on higher domestic use and exports.

Corn exports were forecast to rise 325 million bushels to 2.1 billion, as lower prices support a sharp increase in global trade following the decline seen during 2022-23. The season-average farm price was projected at $4.80 per bushel, down $1.80 from 2022-23.

The soybean outlook is for higher supplies, crush, ending stocks and lower exports. The soybean crop was projected at 4.51 billion bushels, up 5% from last year mainly on higher yields. With lower beginning stocks partly offsetting increased production, soybean supplies were forecast at 4.75 billion bushels, up 4%. The season-average soybean price was forecast at $12.10 per bushel compared with $14.20 in 2022-23. Soybean meal was forecast at $365 per short ton, down $90.  

Meanwhile, U.S. corn planting was at 65%, as of the week ending May 14, according to the USDA’s latest Crop Progress report. That’s up from 49% the previous week, 20% ahead of a year ago and 6% ahead of the five-year average. 30% was emerged, up from 12% the previous week, 17% ahead of the previous year and 5% ahead of the five-year average.

Soybeans were at 49% planted, up from 35% the week before, 22% ahead of a year ago and 13% ahead of the five-year average. 20% are emerged, 12% ahead of a year ago and 9% ahead of the five-year average.

The week ending May 6 saw 57,100 dairy cows head to slaughter, down 1,700 from the previous week but 800 head, or 1.4%, more than a year ago. Year-to-date, 1.17 million head have been culled, up 51,300, or 4.5%, above a year ago.

Checking demand, March butter disappearance totaled 219.5 million pounds, up 19.4% from February and 15.2% above March 2022. HighGround Dairy credits “substantial domestic demand, possibly due to an earlier Easter in 2023.” The butter was a “beacon of hope,” said HGD contributing dairy economist Betty Berning in the May 22 Dairy Radio Now broadcast.
Cheese totaled 1.23 billion pounds, down 1.7% from February and down 2.2% from a year ago. Both domestic use and exports were lower, falling 2.4% domestically and 0.4% on exports. American cheese exports plummeted 12% annually, and year-to-date were at a deficit of 4.3% to the same period in 2022.

Nonfat dry milk-skim milk powder utilization totaled 238.5 million pounds, up 25.1% from February and 1.4% ahead of a year ago. HGD credited an uptick in domestic usage, which was up 13.7%, while exports declined 2.7% from 2022.

Dry whey totaled 79.7 million pounds, up 8.1% from February and 11.8% ahead of a year ago. Domestic usage, at 32.8 million pounds, was up 17.1% from a year ago, and exports, at 46.9 million, were up 8.3%.

Fluid milk sales looked a little better in March but were still down from a year ago. The latest data shows packaged fluid sales totaled 3.8 billion pounds, down just 0.7% from March 2022, following a 3.2% drop in February.

Conventional product sales totaled 3.5 billion pounds, down 0.9% from a year ago. Organic products, at 256 million pounds, were up 1.3%, and represented 6.8% of total sales for the month.

Whole milk sales totaled 1.3 billion pounds, up 2.1% from a year ago, up 1.1% year-to-date and represented 34.3% of total milk sales for the three months.

Skim milk sales, at 192 million pounds, were down 6.2% from a year ago and down 6.8% year-to-date.

Total packaged fluid sales for the three months amounted to 10.9 billion pounds, down 1.4% from 2022. Conventional product sales totaled 10.2 billion pounds, down 1.6%. Organic products, at 732 million pounds, were up 1.1%, and represented 6.7% of total milk sales for the period.

The USDA announced the June federal order Class I base milk price at $18.01 per hundredweight, down $1.56 from May, $7.86 below June 2022 and the lowest Class I since November 2021. It equates to $1.55 per gallon, down from $2.22 a year ago. The six-month average stands at $19.77, down from $23.32 a year ago and compares to $16.13 in 2021.
 Global Dairy Trade reversed two events of gain this week, as the GDT’s weighted average slipped 0.9%, following gains of 2.5% May 2 and 3.2% April 18. Traders brought 47.5 million pounds of product to market, down from 51.3 million May 2 and the lowest since June 21, 2022. The average metric ton price slipped to $3,488, down from $3,506 May 2.

Anhydrous milk fat led the declines, down 4.5%, after losing 2.4% May 2. Butter, on the other hand, was up 2.2%, following a 2.4% advance. Cheddar showed the second biggest decline, down 3.4%, after rising 4.5% last time. Skim milk powder was down 1.6%, after rising 1.5%, and whole milk powder was up 0.3% following a 5% gain May 2.

StoneX said the GDT 80% butterfat butter price equates to $2.2430 per pound, up 5.4 cents after gaining 5.6 cents May 2, and compares to Friday’s CME butter at $2.46. GDT cheddar, at $1.9991, was down 7 cents, and compares to Friday’s CME block cheddar at $1.5350. GDT skim milk powder averaged $1.2547 per pound, down from $1.2641, and whole milk powder averaged $1.4715 per pound, up from $1.4650. CME powder closed at $1.1525.

Dairy margins deteriorated over the first half of May, particularly in nearby periods, as a sharp decline in milk prices more than offset steady to weaker projected feed costs, according to the latest Margin Watch from Chicago-based Commodity and Ingredient Hedging LLC.

“Spot trade in cheese and whey has been at a deep discount to indicative Class III milk futures which have adjusted lower as the cash market has failed to recover,” the MW reported. “Whey prices have dropped from almost 87 cents per pound early last year as increased production is forcing more trade to clear at the CME. Since the beginning of April, 229 loads have traded in the spot market. While exports have held up, weaker hog margins in China are causing a recent slowdown in demand which will force more product to clear domestically.

“Exports of other dairy products during March were impressive as well, with 91.6 million pounds of cheese and curd exports which represented the second-highest March total on record, although total first-quarter cheese exports were record high and first quarter NDM exports were the second highest on record.

“Unfortunately, lower prices may need to be maintained to move additional product through export channels as competition increases, particularly to Asia. Another problem for dairy producers is that ongoing issues with labor, freight and maintenance are reducing the capacity of dairy processors. Cooperatives and milk handlers have been forced to either dump or sell spot milk at deep discounts, with producers receiving pricing of $4 to $12 per cwt below class for milk exceeding contracted volumes.”

Cooperatives Working Together members accepted 11 offers of export assistance this week on sales of 1.3 million pounds of American-type cheese, 44,000 pounds of butter and 154,000 pounds of cream cheese. The product is going to customers in Asia, Central America, the Caribbean, Middle East-North Africa, Oceania and South America through November.

In politics, the International Dairy Foods Association reports that the Wall Street Journal says,  “Top officials with the USDA remain fixated on banning chocolate milk from elementary and middle school cafeterias despite widespread opposition from parents, school meal professionals and the federal government’s own Dietary Guidelines for Americans report.”
In April, 37 school milk processors representing more than 90% of the school milk volume in the U.S. jumped ahead of USDA’s proposed guidelines with the Healthy School Milk Commitment, a pledge to offer nutritious school milk options with no more than 10 grams of added sugar per 8-fluid-ounce serving by the 2025-26 school year.

The Journal reports that “the issue has divided parents.” However, neither the Journal article nor USDA’s comments in the Journal feature thoughts from parents of school-aged children. In a Morning Consult poll of more than 500 parents with children in public schools conducted March 17-19, 90% of parents expressed agreement that non-fat or low-fat flavored milk should remain an option in public school meals. In October 2022, a similar poll found support among parents for low-fat flavored milk to be 84%, meaning support among voting parents with children in public schools continues to increase, said IDFA.

Friday Closing Dairy Market Update - Not a Good End to the Week

MILK:

June Class III futures closed at a new contract low at $15.86. The May contract is basically priced with Tuesday being the last day to trade the contract. The May Federal Order prices will be announced on Wednesday. There is no concern over the milk supply which leaves buyers unconcerned over the availability of dairy products as the weeks progress. It is spring flush and milk production is only up 0.3% from a year ago, but supply is more than the current market can handle. Demand is good but not as good as it should be. Manufacturing has not been able to increase inventory due to plants not being able to run at capacity of the facility but at the capacity of what the workforces allows. Milk output in some areas will begin to decline as temperatures increase. More milk will be available to manufacturers as schools close for the summer. Current low milk prices may result in more farms throwing in the towel and discontinue dairying. That may mean heavier culling, or it could just shift cows to another operation. Markets will be closed on Monday in observance of Memorial Day and will reopen Monday night at 5 p.m. Central time.

AVERAGE CLASS III PRICES:

3 Month:	$16.21
6 Month:	$17.23
9 Month:	$17.71
12 Month:	$17.81

CHEESE:

For the week, blocks declined 5.75 cents with 22 loads traded. Barrels gained 2 cents with 29 loads traded. Dry whey gained a penny withy 36 loads traded. Blocks were strong for the first half of the week before falling over the past three days. It may take an extended period of time before supplies will tighten sufficiently and buyers will become more aggressive.

BUTTER:

Butter has been noneventful so far, this entire year. I have never seen a cash market remain entrenched in a sideways pattern for this length of time. There is no indication this will change anytime soon. For the week, butter declined 3 cents with three loads traded. Grade A nonfat dry milk increased 1.75 cents with 13 loads traded.

OUTSIDE MARKETS SUMMARY:

July corn closed up 13.25 cents per bushel at $6.0400, July soybeans closed up 13.25 cents at $13.3725 and July soybean meal closed up $5.00 per ton at $402.20. July Chicago wheat closed up 11.75 cents at $6.1600. August live cattle closed up $0.40 at $165.18. July crude oil is up $0.96 per barrel at $72.79. The Dow Jones Industrial Average is up 329 points at 33,093 while the NASDAQ is up 278 points at 12,976.

Friday Midday Dairy Market Summary - Cheese Pulls Back Further

OUTSIDE MARKETS SUMMARY:

CORN:	14 Higher
SOYBEANS:	13 Higher
SOYBEAN MEAL:	$5.40 Higher
LIVE CATTLE:	$0.02 Lower
DOW JONES:	282 Points Higher
NASDAQ:	255 Points Higher
CRUDE OIL:	$0.65 Higher

MIDDAY MARKET UPDATE:

Block cheese price declined 4.25 cents, closing at $1.4775 with nine loads traded. The three-day price increase has been eliminated as buyers see plenty of supply available for purchase. Buyers continue to purchase supply without having to be aggressive. This may be detrimental later in the year as buyers may not need to be as aggressive when demand seasonally increases. Barrel cheese price declined a penny, closing at $1.49 with seven loads traded. Dry whey price remained unchanged at 27.50 cents with five loads traded. Class III futures are taking a beating again with contracts from 26 cents lower to 3 cents higher. Butter price gained 1.25 cents, closing at $2.453 with one load traded. Grade A nonfat dry milk price remained unchanged at $1.17 with no loads traded. Class IV futures are 6 cents lower to 3 cents higher. Butter futures are 0.45 cent lower to 1.15 cents higher. Dry whey futures are unchanged to 0.52 cent lower.

Friday Morning Dairy Market Update - Limited Trading Activity Expected

OPENING CALLS:

Class III Milk Futures:	4 to 8 Lower
Class IV Milk Futures:	Steady to 5 Lower
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	4 to 8 Higher
Soybean Futures:	8 to 14 Higher
Soybean Meal Futures:	$1 to $3 Higher
Wheat Futures:	6 to 9 Higher

MILK:

Milk futures were under pressure the past two days following cheese and butter prices lower. June milk is on the verge of dropping below $16.00 again, where it had been last week. Milk production remains strong, dairy product production remains strong, and schools closing for the summer keeps pressure on the market with limited upside potential when there is strength. Dairy cattle slaughter has not yet increased despite high cull-cow prices and low milk prices. Demand will need to increase and/or production will need to decrease for the market to find support and trend higher. The markets will not be open Monday due to Memorial Day but will resume trading at the usual time Monday night.

CHEESE:

It has been disappointing that cheese prices were not able to extend the price rally for more than three days. The gain has nearly been eliminated as buyers have stepped back, waiting for sellers to offer cheese lower. Low bids are placed early during spot trading, indicating buyers are not aggressive. Sellers then need to lower offers if they want to move any product or they will go home without any sales.

BUTTER:

Price has remained in a sideways pattern for five months, setting a record. There is no indication price will break out of the range any time soon. Churning remains active, keeping supply plentiful. Cream is expected to tighten next month as weather will impact butterfat and ice cream production will increase utilizing more cream. However, that still may not impact price as supply and demand are balanced.

Thursday Closing Dairy Market Update - Heavier Culling is Not Taking Place

MILK:

There has been no change in the market even though it seemed a bit more promising a few days ago. Milk supply is plentiful, leaving buyers of dairy products unconcerned over supply. Buyers are unwilling to buy product much ahead of time due to increased storage costs. They would rather purchase on an as-needed basis for as long as possible. Milk production remains strong as spring flush continues to unfold. Spring flush should be nearing its peak soon, but milk production may hold strong as long as the weather remains good. Dairy cattle slaughter in April totaled 243,600 head. This was a decline of 62,600 head from slaughter in March, but an increase of 5,800 head from April 2022. Slaughter generally decreases significantly from March to April, making this not unusual. However, the report showed that dairy cattle slaughter has not increased due to low milk prices. This may be delayed more than it was during the low prices of 2021, even though cull cow prices are higher than they were back then. Many farmers are in a better financial position due to the higher milk prices last year.

AVERAGE CLASS III PRICES:

3 Month:	$16.31
6 Month:	$17.31
9 Month:	$17.76
12 Month:	$17.85

CHEESE:

Cheese prices have limited upside potential. Any gains are short-lived. It was hoped buyers would begin to be more aggressive purchasing cheese at current low prices, but such is not the case, at least not yet. Buyers are not interested in building inventory at this time of year. Sellers would like to keep inventory from building and continue to offer supply to the spot market.

BUTTER:

Price retreated from the top end of the range, remaining fully entrenched in a sideways pattern with no end in sight. Churns are active with cream supply sufficient for demand. Ice cream production is increasing, but at a slower pace than usual for this time of year due to cooler weather and a slower increase in demand. Current demand for butter is meeting seasonal expectations.

OUTSIDE MARKETS SUMMARY:

July corn closed up 3.50 cents per bushel at $5.9075, July soybeans closed down 0.50 cent at $13.24 and July soybean meal closed down $5.00 per ton at $397.20. July Chicago wheat closed down 2.00 cents at $6.0425. August live cattle closed up $0.65 at $164.78. July crude oil is down $2.51 per barrel at $71.83. The Dow Jones Industrial Average is down 35 points at 32,765 with the NASDAQ is up 214 points at 12,698.

Thursday Midday Dairy Market Summary - Blocks Show Further Weakness

OUTSIDE MARKETS SUMMARY:

CORN:	2 Higher
SOYBEANS:	1 Lower
SOYBEAN MEAL:	$2.40 Lower
LIVE CATTLE:	$0.70 Higher
DOW JONES:	130 Points Lower
NASDAQ:	204 Points Higher
CRUDE OIL:	$2.65 Lower

MIDDAY MARKET UPDATE:

Low bids were placed at the beginning of spot cheese trading and remained there through the session. Sellers started higher and continued to offer lower until trades were made. Block price declined 5.75 cents, closing at $1.52 with six loads traded. Barrel cheese price declined 1.50 cents, closing at $1.50 with two loads traded. Dry whey price slipped 0.25 cent, closing at 27.50 cents with 15 loads traded. There were 12 unfilled bids with 10 uncovered offers remaining at the close. Class III futures are 11 cents higher to 33 cents lower with June showing the greatest loss. The gains are seen in December and later contracts. Butter price declined 2 cents, closing at $2.4175 with one load traded. Grade A nonfat dry milk price increased 1.25 cents, closing at $1.17 with seven loads traded. Class IV futures are steady to one cent lower. Butter futures are steady to 3.25 cents lower. Dry whey futures are 0.50 cent lower to 0.27 cent higher.

Fluid Milk and Cream - Western U.S. Report 21

Overall, milk production is steady in California, despite notable week to week fluctuations     for the state thus far this year. Contacts note preliminary records indicate milk output is     slightly above anticipated levels for the month and compared to May of 2022. Additionally,     preliminary records are noted to indicate May production holding up closely to April     production by contacts. Unplanned downtime at some handling and manufacturing facilities has     caused balancing difficulties for the Central Valley area. Stakeholders relayed some field     areas have not been able to be planted and express concern that feed cost may go up. Demand     for all Classes is steady. 

Farm level milk output is steady in Arizona. However, contacts relay lower than anticipated production for the year thus far. Additionally, recent slight downticks have been noted by contacts as temperatures have gone into the 100s. Available open processing capacity has been filled with out of state volumes. Contacts relayed that some spot sales and purchases for Class IV milk are at below Class prices. Current demand for all Classes is unchanged, although some local decreases are anticipated with the upcoming holiday. 

Milk production is steady in New Mexico. Milk supplies are ample compared to production needs and available throughout the state. Demand for all Classes is steady. 

In the Pacific Northwest, farm level milk output is strong to steady. Cow comfort has improved, and contacts note milk production is back at anticipated levels. Milk supplies are ample to accommodate production needs and available throughout the state. Some spot sales and     purchases are at below Class prices. All Classes have steady demand. 

In the mountain states of Idaho, Utah, and Colorado milk production is strong. Flood warnings and snowpack melt in Idaho had minimal effects to cow comfort and milk output. Heavy to balanced volumes compared to processing capacities are reported by contacts. Some handlers relay Class II demand from ice cream manufacturers has increased. Demand for all Classes is steady overall. 

Plentiful amounts of condensed skim milk are widely available for contract and spot sales. Contracted sales are steadily drawing on inventories, while spot market activity is moderate. Cream is widely available and plentiful with milk production strong to steady overall. Production schedules are strong. Cream multiples remained largely unchanged this week.

     Western U.S., F.O.B. Cream
     Price Range - All Classes; $/LB Butterfat:   2.4510 - 3.0147
     Multiples Range - All Classes:               1.0000 - 1.2300
     Price Range - Class II; $/LB Butterfat:      2.5736 - 3.0147
     Multiples Range - Class II:                  1.0500 - 1.2300

Thursday Morning Dairy Market Update - Trader Attitudes May Be Changing

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	Steady to 3 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	Mixed

MILK:

Milk futures set back Wednesday on the weakness of block cheese. Milk futures held well despite the decline as maybe traders are a little more reluctant to sell the market as maybe a little change in attitude is surfacing. However, it is too early to tell. Milk production is currently strong with spring flush expected to peak soon. However, with current milk production running above a year ago, plenty of milk is available for demand. More will be available for manufacturing after the next two weeks as schools close for the summer. Milk prices may have limited-upside potential in the near term.

CHEESE:

American cheese inventory increased from the previous month but showed little change from the previous year. This has been the pattern so far this year. Even though milk production has been higher, cheese inventories have not grown with total cheese below a year ago. However, demand has not been good enough to tighten supply due to low price not being reflected in the retail market.

BUTTER:

Butter remains sideways with buyers and sellers comfortable in the current price range. Business is being done without the need for either buyers or sellers to be aggressive. Churning is active, keeping supply readily available for demand. The inventory is higher than a year ago, but at a comfortable level.

Wednesday Closing Dairy Market Update - American Cheese and Butter Stocks Increase

MILK:

Milk futures set back today due to the weakness of blocks. Buyers just would not bid higher for cheese and decided to pull back and let sellers come to their price. Milk production is termed as steady to stronger leaving sufficient milk for all areas of the industry. Weather so far has been mild and conducive for strong milk output. Spring flush should be near its peak, but with current weather, it could remain at that level for an extended period of time. Some schools have closed for the summer while most of them will be closing over the next two weeks. This could have a negative impact on spot milk prices that have been unusually low for this time of year. It is uncertain whether culling has increased this month. We did not really see it in April, but another month of low milk prices may increase the need for farms to raise the bar on milk production resulting in an increased culling rate.

AVERAGE CLASS III PRICES:

3 Month:	$16.46
6 Month:	$18.35
9 Month:	$18.65
12 Month:	$18.05

CHEESE:

American cheese stocks increased 11.5 million pounds totaling 838.4 million pounds according to the April Cold Storage report released today. This is right in line with a year ago. Swiss cheese stocks decreased 21,000 pounds totaling 21.6 million pounds in April. This is 10% below a year ago. Other cheese stocks decreased 8.3 million pounds to a total of 603.7 million pounds which is 3% below a year ago. Total cheese inventory totaled 1.463 billion pounds, up 3.1 million pounds from March but down 17.4 million pounds from April 2022. This should be neutral to supportive for the market.

BUTTER:

Butter stocks in April totaled 327.7 million pounds, up 18.2 million pounds from March and up 10% from April 2022. Current butter supply is sufficient for demand with production ongoing leaving market participants unconcerned over supply. This leaves spot price entrenched in a sideways trading range.

OUTSIDE MARKETS SUMMARY:

July corn gained 10.25 cents closing at $5.8775. July soybeans gained 1.75 cents closing at $13.2425 with July soybean meal down $4.30 per ton closing at $402.10. July wheat fell 16.75 cents. June cattle gained $1.92 closing at $166.20. July crude oil declined $0.12 ending at $74.22 per barrel. The Dow declined 266 points ending at 32,790 while the Nasdaq lost 105 points closing at 12,455.

Wednesday Midday Dairy Market Summary - Blocks Run Out of Steam

OUTSIDE MARKETS SUMMARY:

CORN:	8 Higher
SOYBEANS:	3 Lower
SOYBEAN MEAL:	$4.10 Lower
LIVE CATTLE:	$1.77 Higher
DOW JONES:	255 Points Lower
NASDAQ:	116 Points Lower
CRUDE OIL:	$0.51 Higher

MIDDAY MARKET UPDATE:

Traders had some anticipation cheese prices could extend the gains of the past three days, but that was too tall an order to fill under current market circumstances. Block cheese price fell back 7.50 cents, closing at $1.5775 with two loads traded. There were two uncovered offers remaining at the close. Barrel price remained steady at $1.5150 with one load traded. There was one unfilled bid and three uncovered offers remaining at the close. Dry whey price found some support with price increasing 1.75 cents, closing at 27.75 cents with nine loads traded. There were 13 unfilled bids and one uncovered offer remaining at the close. There are a lot of willing buyers, but they are not being very aggressive. Class III futures are 14 cents lower to 6 cents higher. Futures fell back significantly after block cheese began weakening. Butter price remained unchanged at $2.4375 with no loads traded. Grade A nonfat dry milk price increased 0.50 cent, closing at $1.1575 with four loads traded. Class IV futures have only traded the August contract with the price unchanged. Butter futures are steady to 1.00 cent lower. Dry whey futures are steady to 2.00 cents higher. USDA will release the April Cold Storage report Wednesday afternoon.

 

Wednesday Morning Dairy Market Update - Milk Futures Show Overnight Strength

OPENING CALLS:

Class III Milk Futures:	5 to 20 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 3 Lower
Soybean Futures:	5 to 8 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	5 to 7 Lower

MILK:

There seems to be a little change in attitude as Class III futures pushed higher overnight on follow-through buying. Contracts have traded through December with all contracts currently at their highs for the night. Fundamentally, there has been no change in the market as milk production continues above a year ago with spot milk still being offered at a substantial discount to class. Schools have closed or will be closing for the summer across the country, leaving more milk available for manufacturing. This does not provide the groundwork for milk prices to trend higher anytime soon. However, if buyers want to take advantage of lower prices to increase ownership of supply for later demand, now is the time they may step up more aggressively.

CHEESE:

USDA will release the April Cold Storage report Wednesday, which I estimate will show cheese stocks nearly in line with a year ago. Demand has been steady with production limited by the workforce and not plant capacity. Traders remain cautious over how much strength cheese prices will have as supply remains plentiful.

BUTTER:

Butter gave the impression last week it was going to move to a higher level or even begin to trend higher, but that was not the case as supply and demand remain balanced with buyers and sellers comfortably doing business at the current level. Butter inventory may be at a similar level to a year ago on the storage report.

Tuesday Closing Dairy Market Update - High Trading Volume in Milk Futures

MILK:

Class III milk futures showed some strong gains earlier in the day but settled off the highs. However, most contracts closed higher making one feel that maybe there is some life in milk prices. Trading volume in June and July contracts was heavy. June showed a volume of 1,832 contracts with July showing 1,590 contracts traded. It has been a long time since this volume has been seen in any contracts. Spot trading tomorrow will be key to market strength. South Dairy Trade numbers were released today with dairy products moving through ports in Argentina during April 1-15 totaling 4,832.50 tons. This was light movement over a two-week period. The average price was $4,257.67 per ton with product moving to 17 destinations. Whole milk powder was 0.5% higher than the previous period at $3,949.44 per ton or $1.79 per pound. Skim milk powder declined 0.3% to $3,675.49 per ton or $1.67 per pound. Semi-hard cheese declined 0.8% to $4,505.91 per ton or $2.05 per pound. Butter gained 0.4% to $4,516.02 per ton or $2.05 per pound. There were 6,995.45 tons shipped through ports in Uruguay from May 1-15 to 21 destinations at an average price of $3,826.99 per ton. Whole milk powder declined 5.3% to $3,709.29 per ton or $1.68 per pound Skim milk powder declined 12.5% to $3,253.56 per ton or $1.48 per pound. Semi-hard cheese gained 2.6% to $5,073.93 per ton or $2.30 per pound. Hard cheese increased 2.0% to $6,512.33 per ton or $2.96 per pound. Butter increased 1.0% to $5,217.61 per ton or $2.37 per pound.

AVERAGE CLASS III PRICES:

3 Month:	$16.57
6 Month:	$17.49
9 Month:	$17.86
12 Month:	$17.91

CHEESE:

I would not say there has been a change in trend, but it seems like buyers have been a bit more aggressive in procuring cheese the past 3 days. Upside price potential may be limited due to the amount of cheese available and the willingness of sellers to move product rather than build inventory. Milk receipts remain higher than a year ago with spot milk continuing to sell at $4.00 to $11.00 under class. This gives plants access to extra milk at an attractive price.

BUTTER:

Price slipped back further in the range with no trading activity. Buyers continue to purchase without having to chase the market. USDA will release the April Cold Storage report tomorrow which could show inventory only slightly above a year ago.

OUTSIDE MARKETS SUMMARY:

July corn closed up 6.50 cents per bushel at $5.7750, July soybeans closed down 18.75 cents at $13.2250 and July soybean meal closed down $5.80 per ton at $406.40. July Chicago wheat closed up 16.00 cents at $6.2225. August live cattle closed down $1.03 at $162.58. July crude oil is up $0.86 per barrel at $72.91. The Dow Jones Industrial Average is down 231 points at 33,056 with the NASDAQ is down 161 points at 12,560.

Tuesday Midday Dairy Market Summary - Blocks Gain for Third Consecutive Day

OUTSIDE MARKETS SUMMARY:

CORN:	8 Higher
SOYBEANS:	17 Lower
SOYBEAN MEAL:	$3.50 Lower
LIVE CATTLE:	$0.50 Lower
DOW JONES:	141 Points Lower
NASDAQ:	106 Points Lower
CRUDE OIL:	$1.30 Higher

MIDDAY MARKET UPDATE:

Block cheese continued to push higher Tuesday, gaining 5.25 cents and closing at $1.6525 with three loads traded and no unfilled bids or uncovered offers remaining at the close. Barrel cheese price closed unchanged at $1.5150 with eight loads traded. Price first increased 3.50 cents before buyers pulled back and sellers became more aggressive, pushing price back down. There was an unfilled bid and an uncovered offer remaining at the close. The inability of barrels to hold gains resulted in Class III futures slipping back. Futures are mixed, ranging from 11 cents lower to 23 cents higher. Dry whey price increased 0.50 cent, closing at 26 cents with no loads traded. There was a lot of business that wanted to be done if the price was right. There were 31 unfilled bids and five uncovered offers remaining at the close. Butter price declined 1.25 cents, closing at $2.4375 with no loads traded and two uncovered offers remaining at the close. Grade A nonfat dry milk slipped 0.75 cent, ending at $1.1525 with no loads traded. Class IV futures are steady to a penny higher. Butter futures are 0.50 cent lower to 0.05 cent higher. Dry whey futures have only traded in the September contract with the price 0.37 cent higher.

USDA Offers Assistance to Help Organic Dairy Producers

The Department of Agriculture recently announced assistance for dairy producers with the new Organic Dairy Marketing Assistance Program/ The program helps dairy producers mitigate market volatility, higher input and transportation costs, and unstable feed supply and prices that have created unique hardships in the organic dairy industry. USDA’s Farm Service Agency is offering $104 million in grants to dairy operations to assist with projected marketing costs in 2023, calculated using their marketing costs in 2022. Organic dairy producers have faced significant and unique increases in their marketing costs, compounded by increases in feed and transportation costs and the limited availability of organic grain and forage commodities. FSA Administrator Zach Ducheneaux says, “Without assistance, many organic dairies, particularly small organic dairies, will cease production.” FSA will begin accepting applications for the program on May 24, 2023. Eligible producers include certified organic dairy operations that produce milk from cows, goats and sheep.

Tuesday Morning Dairy Market Update - Cash Trade to Set Direction

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	4 to 8 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	4 to 6 Lower

MILK:

It may be difficult for milk futures to see further gains ahead of spot trading as traders will be cautious over a third day of gains for cheese. That would defy the recent pattern and possibly trigger further buying interest in milk futures. The current milk supply is plentiful, which keeps bottling and manufacturing satisfied. Schools have already closed or will be closing for the summer over the next two weeks. This will move more milk to manufacturing, keeping supply of dairy products readily available.

CHEESE:

Cheese buyers have been more aggressive over the past two days, but will they remain aggressive for a third day? Sellers continue to bring loads to the spot market and higher prices might increase the desire to sell more supply. Dry whey continues to show weakness, moving price below the level it was when dry whey began trading on the daily CME spot market in March of 2018. Prior to that, prices were recorded in the week NASS price reports.

BUTTER:

Price still holds at the top end of the trading range but unable to find continued support to allow the market to trend higher. Supply and demand are balanced with buyers and sellers comfortable. Churning remains active with some plants running on full seven-day weeks.

Monday Closing Dairy Market Update - Milk Futures Hold Gains

MILK:

Class III milk futures posted a nice close after the second day of stronger cheese prices. The gain of futures was not in correlation to the gain of underlying cash due to traders remaining cautious over the extent of the price strength. Recently, there has only been a maximum of 2 days of underlying strength before sellers stepped back into the market more aggressively. Traders will watch the cash market closely for any change from the recent pattern. The current milk supply remains plentiful for both bottling and manufacturing. Spot milk still remains from $4.00 to $11.00 below class. Milk production is slowing relative to the first 3 months of this year but remains above a year ago. Manufacturers and end users are not concerned over supply at the present time. Class IV futures closed mostly steady on Friday with a few contracts closing mixed. The weakness of butter was offset by the increase of nonfat dry milk price. There is 81% of the nation's corn planted and 66% of the soybean planted running well ahead of last year's pace.

AVERAGE CLASS III PRICES:

3 Month:	$16.29
6 Month:	$17.40
9 Month:	$17.77
12 Month:	$17.84

CHEESE:

It would be nice to see cheese buyers remain aggressive for a time but current supply most likely will keep upside potential limited. Buyers are not concerned about supply tightness and will purchase as product is needed. The goal seems to be to limit the amount of cheese in inventory to limit the cost of storing extra cheese until later in the year. The desire is to move it as quickly as possible once it is produced.

BUTTER:

Butter made an attempt to move above and remain above the sideways trading range it has been in so far this year, but it could not find enough buying interest to push it higher. Supply is plentiful with cream supply sufficient for ongoing production. Some plants are selling extra cream rather than churn it due to the available quantity of supply.

OUTSIDE MARKETS SUMMARY:

July corn closed up 16.50 cents per bushel at $5.7100, July soybeans closed up 34.00 cents at $13.4125 and July soybean meal closed up $3.10 per ton at $412.20. July Chicago wheat closed up 1.25 cents at $6.0625. August live cattle closed down $0.70 at $163.60. July crude oil is up $0.36 per barrel at $72.05. The Dow Jones Industrial Average is down 140 points at 33,287 with the NASDAQ is up 63 points at 12,721.

Monday Midday Dairy Market Summary - Cheese Gains Again

OUTSIDE MARKETS SUMMARY:

CORN:	15 Higher
SOYBEANS:	34 Higher
SOYBEAN MEAL:	$2.90 Higher
LIVE CATTLE:	$0.52 Lower
DOW JONES:	100 Points Lower
NASDAQ:	70 Points Higher
CRUDE OIL:	$0.65 Higher

MIDDAY MARKET UPDATE:

Spot trading did not begin on a positive note as dry whey price declined a penny. Price closed at 25.50 cents with seven loads traded. Sellers continue to bring supply to the market even though price is at multiple-year lows. However, cheese showed greater buyer interest with blocks increasing 6.50 cents closing at $1.60 with two loads traded. Barrels increased 4.50 cents closing at $1.5150 with 11 loads traded. This put further support under the market with futures moving higher. The gain of futures was not as much as would be expected as traders remain cautious over price potential. The pattern has been that cheese prices have seen two days of strength before sellers again become more aggressive. Butter price declined a penny closing at $2.40 with one load traded. Grade A nonfat dry mild gained 0.75 cent with two loads traded. Class IV futures have shown little price movement.