Market Reports

Class III and Class IV futures settled today not far from where they finished last Friday.Those prices are generally disappointing for dairy producers, but they are not low enough to significantly slow milk output. The dairy herd is massive, and it’s likely to stay that way for a while.

The mercury is climbing on the West Coast and heat stress is dragging down milk yields. In the Northeast temperatures are expected to average above normal, gradually bringing an end to the spring flush. But in the Midwest and Southern Plains it’s unusually cool. Milk yields have slipped from the peak, but the mild weather is prolonging the flush, no matter what the calendar says.

After a few hot weeks, stress is starting to sap milk yields. Nevertheless, there is more milk than manufacturers can accommodate in the Southwest and mountain states despite supply management programs.

Summer is off to a sweltering start in much of the nation and there is still plenty of milk. Cheese plants are running full throttle, demand is strong and exports are booming.

Exports will be an important outlet for a market that is heavy with product. There is plenty of milk, and cheese plants are running full throttle.

Spot milk values in the Upper Midwest fell hard this week, making clear that milk is abundant. Steep discounts on spot milk incentivize cheese producers to squeeze in extra loads. Given these discounts and expansions in cheese processing capacity this year, we’ve been making massive volumes of cheese.