MILK
Milk production is still increasing in many areas while other areas report spring flush has slowed with mostly steady output. This gives the impression that spring flush may end sooner this year than usual. Spot milk prices are strengthening with prices in the Midwestern region now running from $1.50 under class to $0.50 over class. This indicates a tighter milk supply than a year ago. The current milk supply is not tight with sufficient supply for bottling and manufacturing. However, there is a perception that supply may tighten as the year progresses. The replacement heifer supply is tight and what is available is expensive which may limit the potential for milk production to increase much even though milk prices may be higher. Most colleges are soon ending classes with some other schools in the Southern states ending classes for the summer. This is moving more milk to processing in those areas. More schools will be closing for the summer over the next few weeks. However, many schools will offer a lunch-type program as they had in the past. Summer demand will be critical for sustained higher milk prices.
AVERAGE CLASS III PRICES
| 3 Month: | $19.60 |
| 6 Month: | $19.55 |
| 9 Month: | $19.25 |
| 12 Month: | $18.96 |
CHEESE
Cheese supply is termed as balanced at present. However, some plants are limiting orders to guard against overselling due to the uncertainty over milk supply later in the year. Interestingly, buyers had little interest in purchasing supplies ahead of time due to the increased storage costs. They were uncertain about the level of demand during the year and did not want to purchase too much ahead of time. That sentiment has changed, and buyers are willing to increase ownership now that prices are trending higher.
BUTTER
The cream supply remains readily available for churning. This keeps manufacturing active with the desire to produce butter for current demand and add to inventory. It is a little surprising price dipped below $3.00 today, but the downside is expected to be limited. Buyers may take advantage of the price decline to purchase supply for later demand.
OUTSIDE MARKETS SUMMARY
July corn closed down 2.00 cents per bushel at $4.5650, July soybeans closed down 19.25 cents at $12.0850 and July soybean meal closed down $5.60 per ton at $372.90. July Chicago wheat closed up 3.50 cents at $6.3750. June live cattle closed down $0.53 at $175.95. June crude oil is up $0.57 per barrel at $79.56. The Dow Jones Industrial Average is up 331 points at 39,388 with the NASDAQ up 44 points at 16,346.
