MILK
Class III futures closed significantly lower for the week. This was in reaction to the decline of spot cheese prices. Fortunately, milk futures rebounded in the second half of the week or greater losses would be seen. USDA released the May Milk Production report which showed milk production was lower than a year ago. Production in the top 24 states was 0.7% below May 2023. April milk production was revised 0.1% lower than reported last month. Milk production per cow averaged 2,122 pounds or 3 pounds below a year ago. Cow number increased by 5,000 head above April but 52,000 head less than a year ago. Milk production in the country declined by 0.9% from May 2023. Production per cow averaged 2,105 pounds or 3 pounds below a year ago. Cow numbers increased by 5,000 head in the United States. This shows cow numbers increased only in the top 24 states.
The surprise of the report is the increase in cow numbers. It was not completely unexpected that culling slowed, but the surprise was the increase in cow numbers from the previous month. Cow numbers in the U.S. totaled 9.35 million head, 68,000 head less than May 2023. This report is neutral to the market and should not result in much volatility on Monday.
AVERAGE CLASS III PRICES
| 3 Month: | $20.13 |
| 6 Month: | $20.13 |
| 9 Month: | $19.77 |
| 12 Month: | $19.52 |
CHEESE
For the weed, block cheese price declined 12.50 cents with 34 loads traded. Barrel cheese price declined 10 cents with 34 loads traded. The dry whey price remained unchanged with two loads traded. Cheese buyers did not need to be aggressive as sellers continued to offer cheese to the spot market. Selling will need to dry up or prices will continue to erode. There is little concern over the cheese supply for the time being. With cow numbers increasing in May, buyers may remain unaggressive.
BUTTER
For the week, the butter price remained unchanged with 12 loads traded. Grade A nonfat dry milk price increased by 1.25 cents with six loads traded. Buyers and sellers of butter are comfortable at the current price level with the price holding in a tight range over the past two weeks.
OUTSIDE MARKETS SUMMARY
July corn closed down 4.75 cents per bushel at $4.3500, July soybeans closed up 5.25 cents at $11.6050 and July soybean meal closed up $4.20 per ton at $361.80. July Chicago wheat closed down 11.25 cents at $5.6150. August live cattle closed up $0.60 at $183.15. August crude oil is down $0.71 per barrel at $80.58. The Dow Jones Industrial Average is up 16 points at 39,150 with the NASDAQ down 32 points at 17,689.
