MILK
Milk futures came to life this week with contracts increasing substantially despite some price weakness during the week. Traders have turned extremely bullish and rightly so as underlying cash prices showed strength. Buyers have stepped up to purchase seasonally and because of the potential for tightening supplies. Milk production continues to decline seasonally while at the same time demand for fluid milk for the school systems increases. Milk is moving to deficit areas to satisfy the demand. The decrease in milk production may slow as temperatures cool next month but production may not increase significantly for a while.
The July Agricultural Prices report released by the USDA shows a decrease in all feed prices used to calculate income over feed for the Dairy Margin Coverage program. The average corn price was $4.24 per bushel compared to $4.48 per bushel in June and $6.22 in July 2023. The premium/supreme hay price was $237.00 per ton in July compared to $256.00 in June and $288.00 per ton in July 2023. The All-milk price was $22.80 in July, the same price as in June. This compares to $17.30 in July 2023. The average soybean meal price is not in this report but will be released on Tuesday. Other prices to take note of are the average soybean price for July was $11.30, down $0.50 per bushel from June and compared to $14.70 per bushel in July 2023. The alfalfa hay price was $183.00 per ton compared to $195.00 for June and $246.00 per ton a year ago. The average price for a dairy cow in July was $2,360.00 compared to $1,760.00 in July 2023.
AVERAGE CLASS III PRICES
| 3 Month: | $21.95 |
| 6 Month: | $21.78 |
| 9 Month: | $21.00 |
| 12 Month: | $20.51 |
CHEESE
For the week, blocks increased by 17.25 cents with 16 loads traded. Barrels increased by 16 cents with five loads traded. Dry whey declined by 0.25 cent with nine loads traded. Blocks moved to the highest price since November 18, 2022. Cheese supply is sufficient for demand, but buyers are concerned about the potential for lower output and reduced availability of fresh cheese.
BUTTER
For the week, the butter price increased by 4 cents with 42 loads changing hands. Grade A nonfat dry milk increased by 4.75 cents with 40 loads changing hands. The butter price moved to a new high during spot trading but could not hold the gain falling back. It may take another run at that level next week. The Grade A nonfat dry milk price moved to the highest level since December 30, 2022.
OUTSIDE MARKETS SUMMARY
December corn closed up 5.00 cents per bushel at $4.0100, November soybeans closed up 7.50 cents at $10.0000 and December soybean meal closed up $2.10 per ton at $313.00. December Chicago wheat closed up 2.75 cents at $5.5150. October live cattle closed up $0.70 at $178.60. October crude oil is down 2.36 per barrel at $73.55. The Dow Jones Industrial Average is up 228 points at 41,563 with the NASDAQ up 197 points at 17,714.
