Market Reports

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.

Over the past year, the dairy markets have exhibited extreme volatility, adjusting to drastic shifts in both supply and demand. Consumer behaviors are shifting back towards something that resembles pre-pandemic times.

With a sense of normalcy restored, and the spring flush rapidly approaching, milk is still plentiful and has resulted in copious dairy product production.

Many plants are keeping busy schedules as they attempt to compensate for last week’s closures, while displaced spot loads of milk and cream continue to search for homes.

Though it will take some time for the impacts of the weather to become fully appreciated, a reduction in milk production and increase in culling is likely in the coming weeks.

Inventories for most dairy products remain heavier than typical for this time of year. Nevertheless, the situation is evolving and tighter markets could be on the horizon.

Prices fluctuate as new market information collides with the realities of supply and demand. Reports indicate that milk production continues to exceed prior year levels and is growing seasonally as spring approaches.

Milk production growth was strong across most of the United States in December, with the West and the Midwest posting particularly convincing figures. A dramatic expansion in the national dairy herd drove much of the increase.