OVERVIEW:
Class III milk futures have exhibited strength over the past four days as cheese prices found support. Butter has not followed suit, remaining choppy. The June Dairy Products report showed strong increases in dairy product production from a year ago.
MILK:
Spot cheese prices have exhibited surprising strength over the past four days. Buyers have been aggressive, likely due to the need to fill orders. It is possible that once those orders are completed, there could be a void in the market. Hopefully, that will not be the case, and seasonal buying will continue. Milk production has been impacted by hotter weather but remains above a year ago. Higher cow numbers and increased production per cow more than make up the difference compared to a year ago. Milk output last year was impacted significantly by bird flu, which has not been as prevalent this year. Grain prices are expected to be lower this year, with farms continuing to hold onto cull cows rather than purchasing high-priced replacements.
AVERAGE CLASS III PRICES:
| 3 Month: | $18.17 |
| 6 Month: | $18.22 |
| 9 Month: | $18.10 |
| 12 Month: | $18.06 |
CHEESE:
The USDA released the June Dairy Products report today. American cheese production totaled 473 million pounds, up 4.8% from June 2024. Italian-type cheese production totaled 509 million pounds, up 5.0% above the previous year. Total cheese output reached 1.20 billion pounds, up 4.2% from June 2024. The increase in milk production resulted in higher cheese production. Cheese output is expected to continue to outpace last year. Dry whey production totaled 73.6 million pounds, up 0.7%. Lactose production totaled 95.9 million pounds, up 1.9%. The production of whey protein concentrate totaled 42.9 million pounds, up 4.8%.
BUTTER:
Butter production in June totaled 185 million pounds, up 10.4% above June 2024. Nonfat dry milk output totaled 140 million pounds, up 9.6%. Skim milk powder production totaled 53.9 million pounds, down 21.7% from a year ago. The production of regular ice cream totaled 64.9 million gallons, down 3.9%.
OUTSIDE MARKETS SUMMARY:
December corn closed down 5.00 cents per bushel at $4.0200, November soybeans closed down 3.75 cents at $9.9075 and December soybean meal closed down $.10 per ton at $284.90. September Chicago wheat closed down 8.50 cents at $5.0825. October live cattle closed up $3.00 at $227.10. September crude oil is down $1.11 per barrel at $65.18. The Dow Jones Industrial Average is down 62 points at 44,112, with the NASDAQ down 137 points at 20,917.
