MILK
Class III milk futures continued the weakness with new contract lows again. July futures closed below $14.00 at $13.97 with only about one week remaining to price the contract. It certainly appears July will be lower than June and the lowest Class III milk prices since May 2020. Hot weather in the Midwest is impacting milk production yet overall production remains strong. This may impact the availability of spot milk. In fact, some plants report they have had no offers for extra milk for the first time since last year. However, spot milk is still available well below class. What is not being done through culling or through reduced-cost feed rations, is being done by hot weather as cow comfort and feed intakes become a challenge. There have been great strides made in keeping cows cool but it remains a challenge to some extent. Rains have fallen in many areas that had been very dry, which should improve crops in those areas improving the availability of feed that had been a concern. It will take more timely rains to improve soil moisture and crops. A lot can happen over the next few months that will impact milk prices.
AVERAGE CLASS III PRICES
| 3 Month: | $14.55 |
| 6 Month: | $15.89 |
| 9 Month: | $16.46 |
| 12 Month: | $16.77 |
CHEESE
American cheese production during the month of May totaled 509 million pounds, up 4.2% over May 2022 according to the Dairy Products report released today. Italian type cheese production totaled 486 million pounds, down 2.2% from a year ago. Total cheese output reached 1.40 billion pounds, down 0.2% from a year ago. It is interesting to see the focus was clearly on American cheese which allowed for the increased volume of cheese offered on the spot market pushing price lower. Dry whey production in May totaled 81.8 million pounds, up 3.2% from a year earlier.
BUTTER
Butter output in May totaled 194 million pounds, up 8.1% from a year ago. With plentiful cream supply, manufacturers were intent on production to provide a cushion of supply to avoid what took place last year. Nonfat dry milk production totaled 206 million pounds, up 7.0% with skim milk powder production at 35.4 million pounds, down 30.3% from a year ago. regular ice cream production increased 2.6% totaling 63.9 million pounds.
OUTSIDE MARKETS SUMMARY
December corn closed up 13.00 cents per bushel at $5.0650, November soybeans closed down 15.50 cents at $13.3950 and December soybean meal closed down $1.40 per ton at $391.80. September Chicago wheat closed down 16.25 cents at $6.5800. August live cattle closed down $0.38 at $174.58. August crude oil is up $.01 per barrel at $71.80. The Dow Jones Industrial Average is down 366 points at 33,922 with the NASDAQ down 113 points at 13,679.
