Market Reports

July through December Class III and a smattering of Class IV futures notched life-of-contract highs this week. While most Class III contracts ultimately settled a little lower than they did last Friday, Class IV futures added roughly 30ȼ.

After notching a new spring high last Friday, butter values plunged early this week. The Tuesday morning selloff was steep but ultimately short-lived. By Thursday, butter buyers were once again bidding with enthusiasm.

The markets are screaming at dairy producers to make more milk, but there are formidable barriers to expansion. Producers who have relied on extra heifers from their neighbors or the latest dispersal auction find they are increasingly scarce and expensive.

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.

Milk should be plentiful and cheap, but this is not a typical year for the dairy industry. USDA reports processors bought spot milk in the Midwest at prices ranging from $1.50 under to 50ȼ over Class III. Spring premiums are atypical, and the midpoint of the range is unusually high for this time of year.

Folks from across the dairy industry gathered this week in Chicago for the annual meeting of the American Dairy Products Institute. This event provides a setting for traders and other stakeholders to chew over market information and revise expectations for the months ahead. While every commodity gained ground at the CME this week, it remains clear that individual products each are confronting their own set of challenges, and that the markets remain shrouded in uncertainty from both supply and demand.