MILK:
Strong price increases in Class III futures improve the price outlook for this year. Class III futures have moved near the highs in some contracts, with the July contract making a new high. This has improved the outlook for milk prices and will keep farmers maintaining cow numbers and pushing milk production. This is clearly seen in the April Milk Production report. Milk futures look better now than they did in April, indicating there may be a greater determination to improve milk production. Milk production in April totaled 18.6 billion pounds, up 1.6% from April 2024 in the top 24 states. Milk production per cow totaled 2,071 pounds, up 12 pounds from a year ago. Milk cows increased by 7,000 head from March, with cow numbers 93,000 head more than a year ago. Milk production in the country was 1.5% higher than a year ago at 19.4 billion pounds. Milk production per cow was 11 pounds higher than a year ago. Cow numbers were 5,000 head above April 2024, totaling 9.425 million head. This paints a bearish outlook for the year, as milk production has been increasing significantly so far this year compared to a year ago. U.S. cow numbers are at the highest level since March 2023. The potential for higher milk prices will push milk production and cow numbers higher.
AVERAGE CLASS III PRICES:
| 3 Month: | $19.14 |
| 6 Month: | $19.19 |
| 9 Month: | $18.99 |
| 12 Month: | $18.75 |
CHEESE:
The unfilled bids at the close of spot trading would suggest that cheese prices may move higher again on Thursday. However, the milk production report showed significantly higher milk production, indicating the milk supply may remain strong. An increasing milk supply will keep sufficient milk available for bottling and manufacturing. Buyer interest may be limited over the next few months.
BUTTER:
Butter is not exhibiting any indication of concern from buyers. Supplies have been purchased and moved to inventory, with price weakness allowing buyers to add to those inventories. The butter price has remained in a 12.50-cent sideways range since late February.
OUTSIDE MARKETS SUMMARY:
July corn closed up 6.50 cents per bushel at $4.6100, July soybeans closed up 9.75 cents at $10.6275 and July soybean meal closed up $1.50 per ton at $294.10. July Chicago wheat closed up 3.25 cents at $5.4925. August live cattle closed up $0.80 at $208.65. July crude oil is down $0.69 per barrel at $61.34. The Dow Jones Industrial Average is down 817 points at 41,860, with the NASDAQ down 270 points at 18,873.
