MILK
It was an interesting week as cheese and butter prices were higher for the week, yet milk futures closed lower. Traders were cautious over the recent rise of cheese and whether the market would be able to sustain the gains. Barrels declined from the level they were at midweek but remained above the level at the end of last week. This should have resulted in stronger futures prices for the week. There seems to be a level of disbelief over the potential of prices throughout the rest of the year. Buyers are looking to increase ownership even though current supply is available. This is generally the time of year during which buyers look ahead and begin to purchase more aggressively no matter what the level of supply there is. There could be more interest this year due to the fact that inventory has not been able to increase over last year and stocks are decreasing seasonally. Milk production is anticipated to steadily decrease over the next few months resulting in spot milk prices moving above class when schools begin sessions, and more milk moves to bottling for school accounts. This will tighten the milk supply available for cheese production.
AVERAGE CLASS III PRICES
| 3 Month: | $17.49 |
| 6 Month: | $17.79 |
| 9 Month: | $17.90 |
| 12 Month: | $17.99 |
CHEESE
For the week, blocks increased 5.75 cents with just two loads traded. Barrel increased 1.25 cents with seven loads traded. Dry whey increased 2.25 cents with seven loads traded. This begs the question as to why Class III milk futures closed lower for the week. It could have been due to the market moving higher than it should have and it corrected or because traders remain uncertain whether the recent strength will be maintained. This may be fleshed out next week. American cheese production in June totaled 478 million pounds, up 2.7% above June 2022. Italian cheese production totaled 479 million pounds, down 1.3%. Total cheese output reached 1.7 billion pounds, up 0.4% above June 2022.
BUTTER
For the week, butter increased 6 cents with 33 loads traded. Grade A nonfat dry milk price declined 3.50 cents with 22 loads traded. This makes one wonder why Class IV futures moved lower during the week as the strength of butter and the weakness of nonfat dry milk should have offset each other. Butter production in June totaled 163 million pounds, up 2.3% from a year ago. Nonfat dry milk production totaled 183 million pounds, up 8.0%. Skim milk powder totaled 37.4 million pounds, down 31.2 million pounds. Regular hard ice cream production increased 0.3% to 67.1 million pounds.
OUTSIDE MARKETS SUMMARY
December corn closed up 3.75 cents per bushel at $4.9725, November soybeans closed up 8.00 cents at $13.3325 and December soybean meal closed down $.80 per ton at $397.70. September Chicago wheat closed up 6.00 cents at $6.3300. October live cattle closed up $1.60 at $182.90. September crude oil is up $1.27 per barrel at $82.82. The Dow Jones Industrial Average is down 150 points at 35,066 with the NASDAQ down 50 points at 13,909.
