MILK
Milk futures were higher for Class III futures, stopping the decline for today. The strength of blocks was more than offset by the weakness of barrels, but that did not have much impact on the market as traders were more focused on blocks. Class IV futures continued the higher trend with new contract highs in all months. It appeared Class III prices might move closer to Class IV as the year progressed, but that may not be the case. Butter may continue to exceed cheese prices as butter is in a stronger fundamental position.
The April Livestock Slaughter report showed dairy cattle slaughter at 38,200 head. This was down 6,400 head from March and down 5,400 head from April 2023. This was the lowest monthly slaughter since December 2023 and the lowest April slaughter since 2022. There is potential for higher milk prices and the replacement heifer supply is tight. This increases the desire for farmers to reduce culling.
AVERAGE CLASS III PRICES
| 3 Month: | $19.54 |
| 6 Month: | $19.66 |
| 9 Month: | $19.40 |
| 12 Month: | $19.18 |
CHEESE
Cheese output in the West is strong, keeping plants running on full schedules. More milk will be moving to manufacturing as schools close for the summer. This is not expected to overwhelm the market but may keep sufficient supply available that will limit the upside price potential. Milk components are higher than last year which has improved cheese yields.
BUTTER
The butter price continues to trend higher as demand is steady to stronger. Any price weakness is expected to be short-lived. The extent of the price potential is difficult to predict but gains this early in the year may indicate prices could move near the high of last year or possibly exceed the high. The supply of cream is sufficient, but it is expected to tighten as summer weather heats up and ice cream production increases.
OUTSIDE MARKETS SUMMARY
July corn closed up 2.75 cents per bushel at $4.6400, July soybeans closed down 7.00 cents at $12.3925 and July soybean meal closed down $1.50 per ton at $376.70. July Chicago wheat closed up 5.00 cents at $6.9800. August live cattle closed down $0.60 at $181.08. July crude oil is down $0.66 per barrel at $76.91. The Dow Jones Industrial Average is down 606 points at 39,065 with the NASDAQ down 66 points at 16,736.
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