MILK:
Class III milk futures did not fare well this week as continued pressure came from the weakness of cheese prices. Milk futures show a difficult year if current fundamentals continue to remain as they are. However, once spring flush runs its course, it is possible milk supply may tighten somewhat to at least be in balance with demand. Continued low prices may also increase culling which could reduce milk supply as the year progresses. USDA is not very optimistic about milk prices this year or for the following year. They estimate the average Class III price at $17.75, a decline of $0.50 from their April estimate according to the World Agricultural Supply and Demand report released today. The first estimate of the average Class III price for 2024 is $17.50. The Class IV estimate was increased $0.20 to $18.30 this year with the initial estimate for next year at $17.35. The All-milk price estimate was reduced $0.15 to an average of $20.50 with an initial estimate for 2024 of $19.90. Estimated milk production this year was reduced 100 million pounds to $228.6 billion pounds. This would be 2.1 billion pounds above the production level of 2022. The initial production estimate for 2023 was released at 430.8 billion pounds.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.76 |
| 6 Month: | $17.78 |
| 9 Month: | $18.16 |
| 12 Month: | $18.23 |
CHEESE:
The price increase during the week of cheese was short-lived with prices closing lower for the week. Blocks declined 8.25 cents with 20 loads traded. Barrels declined 4 cents with 58 loads traded. Dry whey declined 2.50 cents with 42 loads traded. it is a buyer's market as they are increasing ownership without having to chase the market. Sellers are willing to sell product even at lower prices. Strong milk production keeps sufficient milk available to the market. USDA reduced their estimate for cheese price this year to $1.8250, down 3 cents from the April estimate. The estimate for 2024 is nearly the same at $1.82. Dry whey price was reduced 3 cents to an average of 39.50 cents per pound with the estimate for next year at 37 cents.
BUTTER:
For the week, butter declined 4.50 cents with only two loads traded. Grade A nonfat dry milk price declined 2.75 cents with seven loads traded. The estimated butter price on the World Agricultural Supply and Demand report was raised a penny to an average of $2.43. The initial estimate for 2024 is $2.3350 per pound. The nonfat dry milk price was raised 2 cents to $1.1850 per pound. The estimated price for 2024 was released at 37 cents per pound.
OUTSIDE MARKETS SUMMARY:
July corn closed up 4.00 cents per bushel at $5.8625, July soybeans closed down 15.50 cents at $13.9000 and July soybean meal closed up $1.50 per ton at $432.90. July Chicago wheat closed up 7.75 cents at $6.3500. June live cattle closed up $1.45 at $164.40. June crude oil is down $0.79 per barrel at $70.08. The Dow Jones Industrial Average is down 9 points at 33,301 and NASDAQ is down 44 points at 12,285.
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