Thursday Closing Dairy Market Update - Will Lower Prices Cure Low Prices?

MILK:

It certainly is an interesting market as milk prices are not going anywhere quickly other than slowly grinding lower. The May contract is basically priced, but it continues to show weakness with the price closing at $16.28. If this comes to fruition, it would be the lowest Class III price since August 2021. Hopefully, milk prices would follow a similar pattern as it set the low for price then eventually resulting in record milk prices in spring of 2022. Current milk production and availability hinder prices from rebounding. Spring flush will keep sufficient supply available for both bottling and manufacturing in the near term. Spot milk is plentiful with plants not running at capacity of the facility, but at capacity as far as the ability to process it due to labor shortages and trucking issues. It will not be too long until schools will again be closing for the summer shifting more milk to manufacturing.

AVERAGE CLASS III PRICES:

3 Month:	$16.94
6 Month:	$17.94
9 Month:	$18.30
12 Month:	$18.36

CHEESE:

The continued failure of cheese prices to extend or even hold any gains has increased the desire of traders to buy into any underlying price strength. Many times, when the market is most bearish is when the trend turns, but now is not yet the time. It may need to move beyond spring flush to see any price strength. Cheese demand is variable likely depending on variety. Inventory is holding mostly in line with a year ago and may not build much more this year.

BUTTER:

Both New Zealand and Australia have had butter supplies tighten recently due to lower milk production. European butter price is steady to lower recently. The latest Global Dairy Trade Auction showed butter price up 4.9% at $2.19 per pound. Overall demand is not as strong as last year at this time. U.S. butter prices remain in a range with buyers and sellers comfortable at the current price level. There is little to move price either way to any great extent at the present time.

OUTSIDE MARKETS SUMMARY:

July corn closed down 11.75 cents per bushel at $5.8225, July soybeans closed up 1.50 cents at $14.0550 and July soybean meal closed up $11.90 per ton at $431.40. July Chicago wheat closed down 14.00 cents at $6.2725. June live cattle closed down $0.05 at $162.95. June crude oil is down $1.09 per barrel at $71.47