MILK
Cheese prices posted significant gains on Tuesday with the barrel price moving to a multi-year high. Class III milk futures moved significantly higher but did not hold the gains into the close of the futures market. The strong futures gain on Monday had the gains on Tuesday already factored in. Some of the buying interest may stem from the potential for milk production to decline through the end of the year. USDA lowered expected milk production on the World Agricultural Supply and Demand Estimates (WASDE) report by 600 million pounds moving output below 2023 at 226.3 billion pounds. Higher milk prices may reduce dairy cattle slaughter further and increase cow numbers, which could increase milk output over time. Lower feed prices reduce the threshold for milk production per cow, allowing more cows to remain in the herd. High heifer prices are not as difficult to stomach when milk prices are higher. The limiting factor will be the availability of replacements. June dairy exports and a milk solids equivalent basis were 0.3% below June 2023. Exports for the first half of the year are down 1.7%.
AVERAGE CLASS III PRICES
| 3 Month: | $21.12 |
| 6 Month: | $20.57 |
| 9 Month: | $19.88 |
| 12 Month: | $19.52 |
CHEESE
Cheese prices may see further strength as buyer interest has increased. The block cheese price one year ago was $1.99, reaching a high one week later at $2.2075. The price then fell to $1.39 by the end of the year. The barrel cheese price one year ago was $1.8250 and fell to $1.40 by the end of the year. Reduced milk production and exports should keep prices from following the same pattern. Cheese exports in June totaled 38,876 metric tons, up 9% from June 2023 and the sixth consecutive month of gains.
BUTTER
The butter price took a step back on Tuesday but should remain supported. June butterfat exports showed an increasable gain totaling 2,071 metric tons, up 80% from a year ago. This may continue as international increases despite higher prices than a year ago. Buying interest on the daily spot market is expected to improve.
OUTSIDE MARKETS SUMMARY
December corn closed down 4.25 cents per bushel at $3.9725, November soybeans closed down 23.50 cents at $9.6250 and December soybean meal closed down $5.40 per ton at $299.20. September Chicago wheat closed down 8 cents at $5.2875. October live cattle closed up $0.73 at $180.75. September crude oil is down $1.71 per barrel at $78.35. The Dow Jones Industrial Average is up 409 points at 39,766 with the NASDAQ is up 407 points at 17,188.
