Market Reports

Market observers are paying close attention to an evolving global milk production scenario as many key supply regions witnessed a shift in trajectory during June. U.S. production moved into positive territory during the month, rising by a modest 0.2% after months of decline.

The United States sent a record-setting volume of dairy products abroad in May. Then, after adjusting for a shorter month, it bested that record in June.

The bulls and bears squared off in Chicago this week, and the dairy markets lurched this way and that as the two sides fought for control. By Wednesday and Thursday, the bears won the upper hand, fueled by news that the U.S. economy contracted in the first half of the year, and that the Federal Reserve hoped to tamp down inflation by raising interest rates yet again.

After seven months in the red, U.S. milk production exceeded year-ago volumes in June, topping June 2021 by 0.2%.

U.S. inflation accelerated to 9.1% last month, reducing Americans’ purchasing power at the fastest rate since 1981. The dairy markets suffered too.

Prices for dairy commodities moved lower both at home and abroad as the markets sort through supply and demand dynamics. Concerns about economic cooling, inflation, and the resulting impact on dairy demand seems to have been sufficient to push back on pricing.