MILK
Milk production across the country is past its peak. Some areas are being impacted by hot weather that has reduced cow comfort. Farms have made great strides to limit the impact of hot weather, but it still has an effect to some degree. Milk components have been holding stronger than usual but are now being affected as the summer progresses. Even with that, milk output is sufficient for demand with spot milk at a slight discount to cash. This is vastly different from spot milk prices a year ago when they were as low as $12.00 below class. This indicates a tighter supply but is not yet a great concern for the market. However, increased demand and hotter weather could tighten the supply quickly.
The House Appropriations Subcommittee approved the reinstatement of the July Cattle Inventory report for July. This certainly is positive news as the report shows the number of dairy cows and replacement heifers in the country in the middle of the year. It provides the ratio of heifers to cows and how that trend is developing.
AVERAGE CLASS III PRICES
| 3 Month: | $20.85 |
| 6 Month: | $20.70 |
| 9 Month: | $20.18 |
| 12 Month: | $19.86 |
CHEESE
Cheese prices remain supported with barrels in a tighter position than blocks. The barrel price moved above $2.00 on Tuesday with blocks nearly reaching that level. There has been more competition from producers of other cheese varieties which has limited the production of barrel cheese. Cheese inventory has not exceeded last year's level leaving some concern over the potential for a rapid inventory decline if demand improves. Cheese exports were strong during March and April with the highest and second-highest levels recorded.
BUTTER
Butter is following the pattern of the past weeks with price strength being a selling opportunity while price weakness being a buying opportunity. Cream supply is holding better in some areas than others. Hotter weather will reduce components and cream availability. Butter production will decrease with plants scheduling maintenance downtime.
OUTSIDE MARKETS SUMMARY
July corn closed up 4.25 cents per bushel at $4.5850, July soybeans closed up 12.25 cents at $11.8950 and July soybean meal closed up $8.10 per ton at $368.30. July Chicago wheat closed up 3.00 cents at $6.2000. August live cattle closed up $1.18 at $179.50. July crude oil is up .12 per barrel at $78.62. The Dow Jones Industrial Average is down 65 points at 38,647 with the NASDAQ up 59 points at 17,667.
