Market Reports

Spring is here. Tankers are lining up at milk powder plants around the nation. A shortage of trucks and drivers is complicating the annual rush to move milk from regions with surplus to regions with spare balancing capacity. Milk powder demand remains strong as whey futures reached 14-year highs early in the week but then retreated.

USDA announced that it would end the Farmers to Families Food Box program after May, squelching hopes surrounding the government spending that propelled the cheese and Class III markets to unsustainable heights in 2020.

Nearly all products gained ground at the CME spot market with the exception of Whey. The other spot dairy products moved decisively upward.

With milk production expected to stay strong, dairy product production will continue to be robust. This aggressive production threatens to overhang the market unless demand can demonstrate a meaningful and sustained expansion.

Cheese manufacturers report that demand has improved from both domestic and international sources. Even with improved demand, supply remains more than ample and inventories are growing.

Milk is undeniably long and with the spring flush imminent in most parts of the country, supplies are expected to remain plentiful. Yet even as milk remains abundant, demand has also perked up, helping to keep markets in balance. Butter manufacturers report that domestic demand has been healthy while the spot whey market continued to reach new heights, setting another record this week.