MILK
The October Class III milk contract closed at the highest level since May 15 ending at $19.10. All contracts closed higher as steady cheese and higher dry whey showed no reason for traders to be bearish. Milk output will slow again in many regions as hot weather is again in the forecast for the weekend. Spot milk prices are as much as $2 over class as the milk supply has tightened. There are virtually no offers being made to manufacturing plants as more are moving to bottling for school accounts and milk production has been decreasing. There is no fear of a shortage, but there is a potential for higher prices.
USDA released the July Agricultural Prices report which showed a decrease in all the categories used for calculating income over feed for the Dairy Margin Coverage program. The average corn price for July was $6.22 per bushel, down $0.27 from June. The average price for July 2022 was $7.25 per bushel. The premium/supreme hay price in July was $288 per ton, down $22 per ton from June. A year ago, the average price was $335 per ton. The all-milk price for July was $17.40, down $0.50 from June. This compares to an all-milk price for July 2022 at $25.50.
The average soybean meal price has not been released by the FSA and will likely be released tomorrow morning, allowing the calculation of income over feed for the Dairy Margin Coverage program. Another price to make note of is the average price of soybeans in July was $14.70, up $0.50 per bushel from June and down from $15.50 a year ago. The alfalfa hay price was $244 per ton, down $19 from June and down $34 per ton from June 2022.
AVERAGE CLASS III PRICES
| 3 Month: | $18.92 |
| 6 Month: | $18.73 |
| 9 Month: | $18.64 |
| 12 Month: | $18.62 |
CHEESE
Some varieties of cheese are showing good demand. Plants are running steady cheese production even though the milk supply has decreased over the past weeks. Cheese inventory has been lower than the previous year in all but one month. It is expected to remain below a year ago for the remainder of the year.
BUTTER
Butter churning has increased as more cream becomes available as greater volumes of milk are being bottled for school accounts. This leaves more cream available for manufacturing. Demand for butter is steady with some indications it is beginning to increase. Buyers are not concerned about tight supply and are increasing ownership as they can without having to chase after the market.
OUTSIDE MARKETS SUMMARY
December corn closed down 2.50 cents per bushel at $4.7825, November soybeans closed down 18 cents at $13.6875 and December soybean meal closed down $6.20 per ton at $404. December Chicago wheat closed down 5 cents at $6.0200. October live cattle closed up $0.78 at $180.83. October crude oil is up $1.95 per barrel at $83.58. The Dow Jones Industrial Average is down 168 points at 34,722 with the NASDAQ up 16 points at 14,035.
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