Market Reports

Typically, a fumble in the spot market and signs of surplus would weigh heavily on cheese and Class III futures. But the bulls reclaimed possession and shrugged off one tackle after another. Dairy – and especially cheese – will feature heavily in football-themed feasts this Sunday. But after the final field goal, there will be a seasonal lull until Easter.

A renewed focus on economic and demographic slowdown in China and a shift to higher milk output in the U.S. and Europe emboldened the bears. The powders were particularly pitiful but this week most markets came roaring back. It seems the dairy trade may have overindulged on pessimism.

U.S. milk output was not as strong as anticipated in December. Perhaps more importantly, the dairy herd is smaller than previously thought, and it’s getting smaller by the month. And yet, there is more than enough milk.

The bears were out in force this week, pressuring the dairy markets to new lows as supplies accumulated and global demand prospects dimmed. Though risks and challenges persist, milk production has generally been strong across the U.S.

The cheese markets came charging out of the gates on Monday. The strong start left some market participants scratching their heads. Cheese exports are still strong but none of that gave the cheese markets the energy they needed to maintain their early week sprint.

The cheese markets got off to a particularly rough start, with big losses both Tuesday and Wednesday. But after a few nights of better rest and healthier habits, they recovered well. Cheese prices are near year-ago levels, suggesting that demand has kept pace with strong production.