Finally, milk prices see a bump after a notable decline over the past few days. Spot butter prices have surged, reaching $3.03 today—the highest level this week. Despite Q3 futures dipping below the $3.00 mark yesterday morning, they closed today at an average of $3.11 per pound (+$0.03). Historically, we’ve observed that the market tends to shake off bearish trends following Cold Storage reports, and this time is no different. Buy-side interest has continued to bolster the market, demonstrating resilience.
It was notably the second day in a row of steady-to-lower spot cheese prices, yet cheese futures largely closed higher on the day.
Some bullish sentiment returned to the CME butter market after recent downturns, as spot prices jumped 5.5 cents to $3.0300 per pound on low volume. Meanwhile, spot blocks fluctuated in search of direction before settling at $1.8100 per pound, where they initially began. The barrel market continued its descent, ending the day at $1.9400 per pound, down two cents.
Butter futures also saw an upward trend, with contracts ticking up for July 2024 through March 2025. Third-quarter futures advanced to $3.1067 per pound, gaining three cents on the day but remaining over eight cents down versus last Thursday.
Dairy cow slaughter rates continue to decline as tight replacement heifer inventories encourage farmers to retain their herds. For the week ending May 18, 47,000 cows were processed, reflecting a 2.1% decrease from the previous week and a substantial year-over-year decline of 14.4%. The South has experienced the most significant drop-off, with a 32.1% decrease compared to the previous year.
