The Latest: May - 2024
The Bulls Run Wild in Chicago With Life-of-Contract Highs
The bulls ran wild in Chicago this week. For both Class III and Class IV milk, June through December futures notched life-of-contract highs. Dairy producers are cashing a pitiful April milk check but looking forward to much more prosperous times ahead.
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President Trump announced that the U.S. will impose a 5% tariff on all Mexican imports beginning June 10. Even if Mexico does not retaliate with a tariff on dairy products there are important consequences for the U.S. dairy industry. For now, however, global demand seems strong.
View reportThe dairy markets have come a long way in the past few months. But while lower milk output and firm demand are clearly underpinning prices, the bulls must be fed with fresh news every day. In the absence of additional fodder, the rally will quickly lose steam.
View reportAre dairy producers turning their sights toward expansion? The United States, Mexico, and Canada have reportedly reached a deal to waive the Trump tariffs and it’s likely that Mexico will drop the punitive border tax on cheese. However, the trade headlines came too late to prevent a setback in spot Cheddar.
View reportIt was another wild week on LaSalle Street, as traders focused much of their attention on Pennsylvania Avenue. For now, however, milk output is in decline around the world. Dairy producers can enjoy much higher milk prices even as exports slip.
View reportNew highs! For dairy producers, those words are like the first glimpse of an oasis after four years wandering in the desert. And, with some better pricing in upcoming milk checks to wet their whistle, dairy producers can have some confidence that it’s not a mirage.
View reportThe dairy markets have had a slew of data to digest in the past two weeks, providing plenty of fodder for the bulls. The Global Dairy Trade (GDT) auction kicked things off last Tuesday with a mostly higher performance. U.S. trade data for February echoed the GDT; butterfat and cheese exports impressed, while milk powder shipments stalled. Less milk and more processing capacity is making for a tight milk market in the Midwest despite the spring flush.
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