OVERVIEW:
Milk futures closed higher with support stemming from the significant increase in the butter price. The positive close makes traders hopeful that next week will be better. The USDA released the August Cold Storage report showing a decline in butter and cheese stocks.
MILK:
Both Class III and Class IV futures close lower for the week. The bounce today provided little consolation for the bearish week. Cheese and butter prices close lower for the week, keeping pressure on the market. Milk production remains significantly higher than a year ago, keeping the market in a bearish posture. The surprise is the continued increase in cow numbers despite the high replacement prices. The milk price outlook for the rest of the year is not very positive, and lower prices are expected to carry over into next year.
The USDA will release the July Agricultural Prices Report on Tuesday. The income over feed price is not expected to show much change from June and will be higher than the $9.50 level of the Dairy Margin Coverage program. That is why the National Farmers marketing group is proposing the DMC floor be raised to $13.00. This has been receiving some support, but whether the government will embrace this is uncertain.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.91 |
| 6 Month: | $16.84 |
| 9 Month: | $16.89 |
| 12 Month: | $16.98 |
CHEESE:
For the week, blocks declined 2.50 cents with 28 loads traded. The weekly average price was $1.6285. Barrels declined 1.75 cents with 2 loads traded. The weekly average price was $1.6310. Dry whey gained 0.75 cent with one load traded. The weekly average price was 64.40 cents with one load traded. The August Cold Storage report showed American cheese stocks increased by 4.7 million pounds, totaling 818.2 million pounds, and were 3% above August 2024. It is not common for cheese inventory to increase in August. Swiss cheese inventory decreased 836,000 pounds to a total of 20.7 million pounds, and 8% below a year ago. Other cheese inventories decreased 14.8 million pounds, totaling 578.2 million pounds, and was nearly the same as last year. Total cheese inventory was 1.417 billion pounds, down 10.9 million pounds from July, but 2% above a year ago.
BUTTER:
For the week, butter declined 5 cents with 74 loads traded. The weekly average price was $1.6720. Grade A nonfat dry milk increased 0.75 cent with 31 loads traded. The weekly average price was $1.1475. Butter inventory in August declined 25.6 million pounds, totaling 305.9 million pounds, down 6% from August 2024.
OUTSIDE MARKETS SUMMARY:
December corn closed down 3.75 cents per bushel at $4.2200, November soybeans closed up 1.50 cents at $10.1375 and December soybean meal closed up $1.40 per ton at $274.60. December Chicago wheat closed down 7.25 cents at $5.1975. December live cattle closed steady. November crude oil is up $0.21 per barrel at $65.19. The Dow Jones Industrial Average is up 300 points at 46,247, with the NASDAQ up 99 points at 22,484
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