Market Reports

The nation is awash in milk. The dairy herd has not been this large since 1994. High feed costs may deter further expansion, but with that kind of cow power, the industry is sure to keep milk production well above prior-year levels for months to come. May output is likely to impress. While the rest of the dairy complex retreats, whey advances.

Some dairy producers are partially shielded from higher feed expenses through a combination of inventories, contracts, and farming. Many have been battered by low Class IV values and widespread depooling, and are now being clobbered by immense feed bills. They are reeling.

The U.S. dairy industry has expanded cheese processing capacity noticeably, and it shows. The flush has accelerated and, according to USDA’s Dairy Market News, cheese makers are “busy.”

The bulls continued their leisurely stroll through the dairy pits this week and the milk markets moved higher.

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.