The Latest: May - 2026
Dairy Markets Retreat This Week
The dairy markets retreated this week, led by a 6.75ȼ drop in Cheddar blocks. CME spot Cheddar closed at $1.555 per pound, within a tic of its lowest price in two months. Cheesemakers continue to crank out product. Domestic demand is climbing, but not as quickly as production. In the first quarter, U.S. cheese output was 3.1% greater than the year before, while domestic consumption climbed 2.3%. Exports absorbed the surplus and then some. But the industry can’t count on exports to use up our excess cheese unless we’re the world’s least expensive source.
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There is simply too much cheese. USDA’s Dairy Market News reports that cheese production schedules are “steady to stronger” and, for some cheesemakers, “limited warehouse space is becoming a concern.” Meanwhile, there is plenty of milk, especially now that bottlers are slowing down intakes for summer break.
View reportCME spot whey powder touched a record low on Monday, trading below 26ȼ for the first time in its five-year tenure at the spot market. But it perked up from there, finishing today at 27.5ȼ. That’s still cheap, but it’s a penny higher than last Friday.
View reportSpot whey also dipped below 30ȼ in 2020, when the pandemic closed nearly every gym in the nation and demand for protein drinks plummeted. Today, the cause is much less dramatic. Processors are simply making more whey powder than the market needs.
View reportThe bears prowled LaSalle Street this week, and the bulls were nowhere to be found. Spot dairy product values slumped, and milk futures followed them lower. The cheese market led the way downward.
View reportBy all accounts, there is still plenty of milk, and driers are running hard. In March, U.S. output of NDM and SMP reached 236 million pounds, up 0.6% from a year ago.
View reportThe feed markets tumbled once again this week and dairy producers can thank Brazilian farmers for the setback. Brazil lacks the infrastructure to hold this year’s bin-busting production. Brazilian soybeans outprice U.S. soy by such a wide margin, two ships with Brazilian soybeans will hit the U.S. Southeast coast this week.
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