Wednesday Closing Dairy Market Update - June Class III Price Drops to $14.91

MILK

It is depressing to see milk futures decline on a daily basis without any bounce in prices. I know the market can look most bearish near the low, but there is no indication of a low in sight. Lower milk prices will force farms to take drastic steps to reduce costs and to generate income. Culling cows will be one way to generate some money. Culling of low-end cows will take place first followed by more drastic culling if low milk prices remain. The June Federal Order class prices were announced today. The Class II price was $18.83, a decrease of $0.28 from May. The Class III price was $14.91, down $1.20 from May and the lowest Class III price since May 2020. The Class IV price was $18.26, an increase of $0.16.

AVERAGE CLASS III PRICES

3 Month:	$15.19
6 Month:	$16.36
9 Month:	$16.83
12 Month:	$17.10

CHEESE

Midwest cheese plants indicate continued strong milk production. The weather has not yet been detrimental to cow comfort and increased culling has not yet curtailed milk production. Spot milk continues to be offered at a discount of as much as $11.00 below class. There is little to get traders excited over as underlying cash prices remain sideways to weaker.

BUTTER

The increase in butter price does not indicate any change in the market, but rather buyers and sellers doing business as they need to. Cream supply remains steady and available for churning as well as ice cream manufacturing. Some plants continue to operate on a full schedule of seven days per week. Butter inventory is building and may continue that trend for a few months. Upside price potential is limited.

OUTSIDE MARKETS SUMMARY

December corn closed down 24.25 cents per bushel at $5.3675, November soybeans closed down 29.25 cents at $12.6500 and December soybean meal closed down $7.40 per ton at $378.00. September Chicago wheat closed down 29.25 cents at $6.6975. August live cattle closed up $1.38 at $173.88. August crude oil is up $1.48 per barrel at $69.18. The Dow Jones Industrial Average is down 74 points at 33,853 with the NASDAQ up 36 points at 13,592.