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Cheddar to Gouda: Analyzing the Rising Prices in Cheese Markets

Stay updated on global cheese market trends. Rising prices and changing demands can impact dairy farmers. Stay ahead of the curve.

Summary: The global cheese market is experiencing significant volatility, with Cheddar prices hitting $2.23/lb. In CME trading, their highest since November 2022 due to decreased milk supply and strategic production control. This trend mirrors international phenomena where German Gouda and Mozzarella prices have also surged, driven by declining milk output and rising global demand. Robust U.S. cheese exports, particularly to Mexico—which imported over 250 million pounds by July 2024, a 39% increase compared to 2023—and a recovering South Korean market underscore the robust international appetite for dairy. With new production capacities coming online and seasonal shifts in milk supply, staying informed and adaptable is crucial.

  • Cheddar prices have surged to their highest levels since November 2022 due to reduced milk supply and strategic production management.
  • Global cheese prices, including German Gouda and Mozzarella, have risen, driven by decreasing milk output and growing international demand.
  • U.S. cheese exports remain strong, with notable increases in shipments to Mexico and recovering demand in South Korea.
  • The total cheese export from the U.S. has been historically high, with over 100 million pounds shipped monthly during peak months in 2024.
  • New production capacities and seasonal shifts in milk supply might influence future market trends, making it vital for dairy professionals to stay informed and adaptable.
global cheese market, volatility, prices, Cheddar, German Gouda, Mozzarella, milk supply, cheese output, production control, worldwide demand, perfect storm, increasing Cheddar pricing, international cheese market, milk output, pressure, Mozzarella prices, German Gouda prices, European milk production, cheese costs, Mexico, U.S. cheese, South Korean demand, global cheese industry, competitors, Kraft Heinz, Saputo Inc., manufacturing capabilities, acquisitions, Groupe Lactalis, Royal FrieslandCampina

The worldwide cheese business is thriving like never before, with prices for popular types reaching new highs. Have you seen the recent price increases for Cheddar? Cheddar blocks hit $2.23/lb on the CME Wednesday, their highest price since November 2022. And it’s not just cheddar. German Gouda and Mozzarella are also skyrocketing, following a global trend of increased cheese prices. But why is this occurring, and should you care? It is critical for dairy farmers, and industry experts like yourself to remain current on these changes. Understanding the causes behind these price swings is exciting and crucial for making strategic choices, such as modifying production, diversifying product lines, or fine-tuning export tactics.

Cheese TypeCurrent Price (per lb.)Year-to-Date Production Change (%)Top Export DestinationExport Volume (millions lbs)
Cheddar$2.23-8%Mexico250
Barrels$2.2825+2%South Korea50
Mozzarella$1.85+5%Japan70
Gouda$2.10+3%Germany60

Cheddar Prices Surge: What’s Behind the Soaring Costs? 

The cheese market in the United States has recently seen significant volatility. Cheddar blocks rose to $2.23 a pound, the highest price since November 2022. Barrels followed suit, rising to $2.2825 per pound in late August, the highest level in two years. What is causing this upswing?

One primary reason is a decreased milk supply. Dairy producers are experiencing restricted milk flow, requiring manufacturers to manage their production lines proactively. Cheddar cheese output has been down by 8% year-to-date through June compared to the same time in 2023. This lesser production has naturally reduced supply, causing prices to rise.

From this viewpoint, the decrease in Cheddar output is consistent with the overall loss in milk production. For 11 months in a row, milk output fell year on year until June. This tendency is not limited to the United States; it is a worldwide phenomenon. These milk supply limits are changing cheese markets and raising prices across all varieties of cheese.

The combination of restricted milk availability, careful production control by producers, and rising worldwide demand is creating a perfect storm of increasing Cheddar pricing. Understanding these market dynamics is crucial, as they will likely influence the industry for the foreseeable future, empowering you to make informed decisions.

Climbing Prices and Global Trends: A Close Look at the International Cheese Market 

While the U.S. cheese business thrives, the overseas landscape is equally appealing. Global milk output has been declining, putting pressure on cheese prices. Global milk output dropped for 11 months until June, resulting in considerable price increases for different cheese varieties.

Take Mozzarella as an example. At this week’s Global Dairy Trade event, mozzarella prices rose. German Gouda followed suit, with prices at their highest since January 2023, according to CLAL statistics. These price rises indicate not just manufacturing issues but also strong demand.

CLAL states that European milk production has suffered severe damage, considerably increasing cheese costs. With less milk to transform into cheese, supply tightens, and prices eventually rise. If dealing in overseas markets, anticipate pricing trends to continue until milk output falls.

Mexico has shown a ravenous taste for U.S. cheese, buying over 250 million pounds by July 2024, a 39% increase over the same time in 2023. South Korean demand has also recovered. However, it has not been restored to levels recorded between 2018 and 2022. These trends suggest that the worldwide cheese business is thriving and becoming more intertwined with global supply and demand changes.

For additional in-depth information, consult trustworthy sources such as Global Dairy Trade and U.S. Dairy Export Council industry studies. They can give a more complete view of this dynamic industry, allowing you to remain ahead of the curve.

Global Appetite for U.S. Dairy: A Crucial Influence on Domestic Cheese Markets 

International demand for U.S. cheese remains vital in setting up domestic cheese markets. Between March and July 2024, the United States exported significant amounts of cheese, reaching over 100 million pounds each month in the spring and continuing with over 85 million pounds in June and July. Mexico is the primary destination, with approximately 250 million pounds of U.S. cheese crossing the border through July, representing a 39% increase over the same time in 2023. This spike demonstrates Mexico’s unquenchable hunger for dairy products from the United States and the two countries’ successful trading connections.

South Korea likewise saw a recovery in cheese imports, albeit not to the extent observed from 2018 to 2022. Nonetheless, the increase from 2023’s lows is significant and indicates that the market’s demand is recovering. These export data, taken together, show a robust worldwide demand for American cheese.

Strong export demand and restricted milk supply cascade impact domestic cheese output and pricing. Manufacturers have had to balance their concentration on diverse cheese kinds, such as Mozzarella and Gouda, as the worldwide market demands. As a result, cheddar output fell 8% during the first half of 2024. The increased export activity, especially for other cheese kinds, restricted the domestic supply of Cheddar, causing prices to rise. This interaction demonstrates how global market dynamics may affect local agriculture yields and price patterns.

Why Has Cheddar Taken a Backseat? Exploring Production and Export Trends 

Let us explore the Cheddar market further. Why has Cheddar had lower production and export figures than other cheeses like Mozzarella and Gouda? A crucial element is manufacturers’ careful manipulation of milk flows. Given the limited milk supply in 2024, producers have intentionally emphasized the creation of cheeses that are either in high demand or have more significant profits.

Furthermore, relative price dynamics have played a significant effect. The motivation to export Cheddar lessened as U.S. prices lost their edge over overseas markets. This move prompted exporters to concentrate on alternative types with better commercial prospects. For example, Mozzarella and Gouda have seen worldwide solid demand, pushing U.S. makers to deploy resources appropriately.

We also must recognize the seasonal and market-specific elements that influence Cheddar. Cheddar manufacturing has particular obstacles, including the necessity for longer age times and more severe quality control procedures. These complications may limit manufacturing capacity and increase total costs, making it less competitive in a high-demand, tight-supply environment.

As pricing and market circumstances change, Cheddar production and export dynamics will likely alter. This highlights the significance of being adaptable and receptive to market signals, a technique that dairy experts must carefully implement to navigate the ever-changing terrain of the global cheese industry. Your strategic decisions, such as modifying production, diversifying product lines, or fine-tuning export tactics, can significantly impact the industry’s future.

A Global Tug-of-War: Powerhouses vs. Niche Innovators 

The worldwide cheese industry is a battlefield, with significant competitors constantly vying for control. Domestically, firms like Kraft Heinz and Saputo Inc. wield tremendous power, employing their massive distribution networks and strong brand awareness to gain most of the market share. On a global scale, companies with sophisticated manufacturing capabilities and savvy acquisitions, such as Groupe Lactalis in France and Royal FrieslandCampina in the Netherlands, have significant influence. Understanding this competitive landscape is crucial for industry professionals to make informed decisions and navigate the industry’s complexities.

Large-scale competition significantly influences market dynamics. Large firms profit from economies of scale, which enable them to make and sell cheese at a reduced cost. Investing in modern technologies and marketing tactics strengthens these organizations’ market position and gives them a competitive advantage. Consequently, businesses can better handle pricing volatility and supply chain interruptions, ensuring operational stability.

This highly competitive economy creates both obstacles and opportunities for small dairy producers. On the negative side, these sector heavyweights often wield negotiation power over milk pricing, placing smaller farmers at a competitive disadvantage. These farmers may need help to match their bigger rivals’ efficiency and market reach, resulting in lower profit margins.

However, there are several prospects for specialized markets and product uniqueness. Smaller farms may benefit from the increased customer demand for artisanal and organic cheeses. By emphasizing quality, distinct tastes, and sustainable procedures, these producers may build a dedicated consumer base ready to pay a premium for specialist items. Strategic relationships with local shops and direct-to-consumer sales channels, such as farmers’ markets and online platforms, may pave the way to success.

While the competitive environment benefits more prominent companies, it allows smaller dairy producers to innovate and seize specialized markets. To distinguish in an increasingly competitive environment, it is critical to remain agile, prioritize quality over quantity, and use unique selling propositions.

Anticipating the Future: Navigating Seasonal Shifts and New Capacities

As we look forward, the cheese market is expected to remain volatile. Milk supplies typically tighten throughout the autumn, worsened by the present production trends. This shortfall is expected to keep cheese prices rising, particularly for kids like Cheddar and Mozzarella, which have witnessed significant increases.

Furthermore, a new capacity that will become available later this year has the potential to transform the picture. Additional manufacturing capabilities may alleviate supply restrictions, stabilizing or reducing prices as we approach 2025. However, this will depend on how quickly and effectively these new plants can scale output.

The essential point is that although short-term price increases are inevitable, the medium—to long-term prognosis is more promising. Manufacturers and dairy producers should regularly monitor market signals and prepare for variations by being agile and adaptable as situations change.

The Bottom Line

Cheddar prices are skyrocketing due to constrained U.S. milk supply and lower production rates, a trend replicated internationally with falling milk yield and increasing cheese costs. International demand, especially in Mexico and South Korea, influences U.S. export strategy and local supply dynamics. As Cheddar takes a backseat, Mozzarella and Gouda gain traction, which may alter once additional production capacity is operational later this year. Keeping up with these market movements is critical for making educated selections.

Are you ready for the changing tides in the cheese market, or will you have to change your methods to stay up?

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European Milk Output Surges

Learn how the recent spike in European milk output affects dairy farmers. What can you do to stay ahead in this changing market? Find out more.

Summary: European milk production surged in June, marking the fifth straight month of growth. Despite strong performances in France, Poland, and Italy, declines in the Netherlands and Ireland balanced these gains. Globally, major dairy exporters saw an overall drop for the 11th consecutive month due to setbacks in Argentina, the U.S., and New Zealand.  June’s output hit 12.7 million metric tons or 28 billion pounds, the highest year-on-year growth since May 2023. Germany maintained steady production, while France saw a 2.9% rise. Poland and Italy grew, but the Netherlands and Ireland faltered.  High temperatures and an outbreak of blue tongue disease have recently stifled Western European production. These issues and a tight U.S. milk supply have driven dairy product prices up.  For businesses, this means adjusting to potentially lower global milk prices, which could reduce feed costs and milk prices. Higher output could open up new collaborations and markets, with increased demand in Asia and the Middle East.  

  • Europe’s milk output rose for the fifth month, hitting 12.7 million metric tons in June.
  • France, Poland, and Italy saw significant gains, while Germany’s production remained steady.
  • Declines in the Netherlands and Ireland tempered these gains.
  • Global dairy exporters faced an 11th consecutive month of overall production drop despite European growth.
  • High temperatures and blue tongue disease have recently impacted Western Europe’s milk production.
  • U.S. dairy markets experienced increased prices due to tight milk supply and European solid performance.
  • Dairy farmers must adjust strategies for future price fluctuations and global supply issues.
milk production, Europe, seasonal trends, European milk collections, year-on-year growth, EU-27 dairy industry, Germany, France, Poland, Italy, Netherlands, Ireland, global milk prices, feed and input costs, collaborations, international markets, high-quality dairy products, Asia, Middle East, Argentina, United States, New Zealand, dairy exporters, weather patterns, disease outbreaks, Atlantic, hot weather, France, Germany, Netherlands, milk output, component levels, blue tongue disease, Western Europe, dairy product inventories, prices, restricted milk supply, American dairy producers, pricing, options, demand, market dynamics

Milk production is surprisingly increasing throughout Europe, breaking traditional seasonal tendencies. But what does this imply for your farm and the more significant dairy industry? Despite a wet spring, the EU saw a substantial rise in milk production in June. Changing weather, disease outbreaks, and evolving market dynamics all impact milk production. The USDA’s Dairy Market News notes that “hot weather in France, Germany, and the Netherlands has stifled milk production and component levels.”
Additionally, blue tongue illness influences the Western European milk supply. Despite a constrained milk supply, the US dairy market is growing, and there is a balance between European growth and setbacks in other key dairy exporters, such as Argentina and the United States. Understanding these trends is critical for any dairy farmer who wants to remain ahead of the curve. Ready to delve further into this developing story? Let’s get started.

June’s Record-Breaking Numbers 

In June, European milk collections totaled approximately 12.7 million metric tons or roughly 28 billion pounds. That is a 0.9% gain over the previous year, the most substantial year-on-year growth since May 2023. This spike comes after a slow spring, marking a significant milestone for the EU-27 dairy industry.

CountryJune 2023 (Metric Tons)June 2024 (Metric Tons)Change (%)
Germany3,100,0003,100,0000.0%
France2,650,0002,725,8502.9%
Poland1,100,0001,115,0001.4%
Italy950,000980,0003.2%
Netherlands1,670,0001,655,300-0.9%
Ireland1,230,0001,215,000-1.2%
Others2,900,0002,910,0000.3%

Country-Specific Insights 

Germany, the world’s largest milk producer, kept production consistent with the previous year. Meanwhile, France, the second-largest manufacturer, had a significant 2.9% rise. Poland and Italy also recorded substantial growth, offsetting falls in the Netherlands and Ireland. These country-specific patterns are critical to understanding the overall market dynamics.

Strategic Insights for Adapting to European Milk Output Changes

Have you considered how the increase in European milk production may affect your day-to-day operations? The rise presents possibilities and problems you cannot afford to ignore.

An increase in European output may put downward pressure on global milk prices. While this may imply reduced feed and input costs for your business, it may also lower milk prices. Keeping an eye on market developments will be essential.

The increase in output may open the path for new collaborations and international markets. Look beyond your boundaries; high-quality dairy products are becoming more popular in Asia and the Middle East. So, what will be your strategy? Adapt, innovate, and grasp opportunities while facing difficulties front-on.

While Europe saw growth, other major dairy exporters encountered difficulty. Argentina and the United States had considerable setbacks, while New Zealand saw a modest year-over-year decline. The five top dairy exporters fell 0.1% from last year’s output, marking the 11th straight monthly fall. This global perspective is vital for understanding the larger picture.

Weather and Disease: The Double Whammy

Since June, increasing temperatures have caused a decline in milk production on both sides of the Atlantic. According to the USDA’s Dairy Market News, hot weather in France, Germany, and the Netherlands has reduced milk output and component levels. An epidemic of blue tongue disease has also affected productivity in Western Europe. These causes are reducing dairy product inventories and raising prices.

The Bottom Line

So, what are the takeaways from all of this? The increase in European milk output and worldwide production constraints have resulted in a dynamic and potentially profitable market. Monitor weather patterns and disease outbreaks, which may immediately influence supply and pricing. Be aware and agile to capitalize on market trends. What tactics will you use to navigate these changes? It might be critical to your dairy farm’s survival.

Learn more: 

Skyrocketing Milk Prices and Butterfat Levels Boost Earnings

Find out how rising milk prices and high butterfat levels are driving up dairy farmers’ profits. Want to know the latest trends and stats? Read our in-depth analysis.

Summary: Have you been keeping an eye on your dairy margins lately? If not, you might be in for a pleasant surprise. August has brought about some noteworthy improvements for dairy farmers, particularly those who have invested wisely in their marketing periods. Profitability has seen a much-needed boost, with milk prices soaring and feed costs holding steady. Curious about the specifics? Let’s dive into the cheese market, where block and barrel prices have hit their highest since October 2022, driven by a drop in cheddar cheese production. This tightening of spot supplies has resulted in firmer prices and unique challenges and opportunities for dairy farmers. And there’s more—while milk production is down, butterfat levels and butter production are smashing records. Cheese production in June dropped 1.4% from the prior year to 1.161 billion pounds, with cheddar production down 9% from 2023 and marking the eighth consecutive monthly decline. This allows dairy producers to capitalize on these quality advances while navigating the challenges of decreased milk quantities. But it’s not just about dairy: changes in crop yields for corn and soybeans also influence feed costs, shaping the broader landscape of your financial well-being. According to the USDA’s August WASDE report, lower soybean meal prices may benefit dairy businesses as feed is a substantial expenditure. In conclusion, higher milk prices and stable feed costs have created an optimistic scenario for dairy margins. The recovery in the cheese market and rising butterfat levels in the face of decreased milk output present complex but attractive options. Dairy producers must be vigilant and respond promptly to changing circumstances, as historically high margins provide ample space for increased profitability.

  • Dairy margins saw improvement in early August due to higher milk prices and steady feed costs.
  • Block and barrel cheese prices reached their highest since October 2022, mainly due to reduced cheddar cheese production.
  • Cheese production in June 2023 fell 1.4% from the previous year, with cheddar production down 9%.
  • Butterfat levels and butter production are at record highs despite the decline in milk production.
  • USDA’s August WASDE report indicates lower soybean meal prices, potentially reducing feed costs for dairy farmers.
  • The current favorable conditions in milk prices and feed costs offer a chance for higher profitability in the dairy industry.
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Have you observed any recent changes to your milk checks? You could be wondering why your earnings have suddenly improved. Well, it’s not all luck. Dairy margins have increased considerably in the first half of August, owing to rising milk prices and record butterfat levels. This increase boosts profitability and provides a much-needed respite from the constant feed expenses. But what is truly driving this favorable shift? Let’s go into the specifics and examine how these changes affect the dairy industry.

Surging Milk Prices and Steady Feed Costs: A Recipe for Improved Dairy Margins 

The dairy market is navigating a complicated terrain full of difficulties and opportunities. Dairy margins improved significantly in the first half of August, primarily due to rising milk prices. Due to solid cheese market dynamics, dairy producers are better positioned as CME Class III Milk futures rise. Even though feed prices have stayed consistent, this constancy has been critical in increasing profitability. The rise in milk prices and steady feed costs provide a balanced equation that improves total margins, allowing farmers to run their businesses more successfully despite continued problems.

Have You Noticed What’s Happening in the Cheese Market? It’s Been Quite a Ride Lately. 

Have you observed what’s going on in the cheese market? It’s been quite the trip lately. The CME Class III Milk futures have gained dramatically owing to a strong cheese market. Last week, block and barrel prices at the CME reached record highs not seen since October 2022. This increase is primarily due to a decline in cheddar cheese output, which has reduced spot supply and caused prices to rise in recent weeks.

Cheddar output, in particular, has been declining steadily, down 9% since 2023. This is the sixth straight monthly decline. Several variables contribute to this tendency, including high temperatures and persistent herd health difficulties associated with the avian flu pandemic. These factors have produced a perfect storm, drastically reducing cheddar yield.

Consequently, lower output has resulted in tighter spot supply and higher pricing. The drop in cheese output adds another layer of complexity to the market, making it critical for dairy producers to remain knowledgeable and adaptable. Are you ready for these upheavals in the cheese market?

Did You Know? Rising Butterfat Levels Amid Declining Milk Production 

Did you know that, although total milk output has decreased, butterfat levels in milk have increased significantly? This may appear paradoxical at first look, yet it is correct. Butterfat percentages have reached all-time highs, regularly outperforming previous year fat tests since June 2020. What drives this phenomenon?

While overall U.S. milk production is down 0.9% year over year through June, the lowest level in four years, the quality of the milk produced is impressive. Butter output in June increased by 2.8% from the previous year to 169.15 million pounds due to rising butterfat content, demonstrating the industry’s flexibility and resilience.

This increase in butterfat levels has given a silver lining among the difficulties. With butterfat percentages at an all-time high, dairy producers may capitalize on these quality advances while navigating the challenges of decreased milk quantities. This potential maximizes profitability and efficiency in processing, guaranteeing that each drop of milk produces the best possible return. The rise in butterfat levels enhances the quality of dairy products and provides an opportunity for dairy producers to adjust their production strategies to maximize profitability.

Ever Considered How Crop Yields Influence Your Feed Costs?

Let’s take a quick look at feed expenses and crop yields. Have you looked at the USDA’s August WASDE report? It’s quite an eye-opener! They have increased yield and production predictions for maize and soybeans. But what does this imply for us in the dairy farming industry?

For openers, predicted corn-ending stockpiles have decreased marginally. This is mainly owing to fewer harvested acres and increased predicted demand. Less maize will be available, which may keep feed prices flat or raise them somewhat.

Conversely, since July, soybean ending stockpiles have risen dramatically by 135 million bushels. This spike has placed downward pressure on soybean meal costs, giving your feed budget some breathing space. Lowering soybean meal prices may be beneficial since feed is a substantial expenditure for dairy businesses. How will you modify your feeding plan in light of these changes?

The Bottom Line

As previously discussed, higher milk prices and stable feed costs have produced an optimistic scenario for dairy margins. The current recovery in the cheese market and rising butterfat levels in the face of decreased milk output present complicated but attractive options. These options include adjusting production strategies to focus on high-butterfat products, optimizing feed plans to take advantage of changing crop yields, and closely monitoring market dynamics to make informed pricing decisions. Furthermore, shifting crop yields influence feed costs, emphasizing the need for strategic planning.

Dairy producers must be watchful and respond promptly to these changing circumstances. With historically high margins, there is plenty of space to strategize for increased profitability. How will you take advantage of these large profit margins? What techniques will you use to optimize your profits? We encourage you to share your strategies and learn from each other, as the answers to these questions guide your dairy operation’s future success.

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A Mix of Steady and Slight Declines to Start the Week in Chicago

To start the week at the CME trade in Chicago, prices are a mix of steady and slightly lower. But let’s break it down together. 

CME trade, Chicago, prices, steady, slightly lower, dry whey, cheese blocks, cheese barrels, butter, nonfat dry milk, sales, recorded, slip, dairy business.

First, dry whey didn’t make any waves—it stayed put at $0.61, with no sales on record. Cheese blocks took a tiny dip, down by $0.01 to sit at $1.84, though one sale was recorded at $1.85. Cheese barrels followed suit, going down $0.02 to $1.91, and like dry whey, no sales were reported. 

Butter held its ground, unchanged at $3.1050, with no sales. However, the nonfat dry milk market saw a small slip, dropping $0.0075 to $1.2350, with two sales recorded at $1.2325 and $1.2350. 

That sounds like a lot of numbers, right? However, keeping an eye on these details can make all the difference in the dairy business.

Maximizing Profit from Beef-on-Dairy Calves: Essential Strategies for Market Fluctuations

Maximize profits from beef-on-dairy calves with strategic planning. Are you ready for market fluctuations? Learn essential strategies to stay ahead in changing times.

With prices typically reaching $600 to $700 or more, much more than dairy calves, the market for dairy-beef crossbred calves has been extraordinary. Remember, however, prior performance does not ensure success in the future.

“No market stays fixed; the market for beef-on–dairy calves is no exception,” says Simplot Animal Sciences manager Brady Hicks. “This is the time to create a strategy for market fluctuations if you do not now have one.”

The great value of beef calves from dairy farms relieves tight margins and growing input expenses. A marketing strategy should always be ready for market changes to prevent being caught off guard.

  • Customize breeding goals to fit the characteristics of the meat market.
  • Improve the quality of mixed calves your farm generates.
  • To maintain ongoing access and value, develop ties with market partners.

By taking these actions, your dairy business can take advantage of the current strong market and be prepared for any downturns, ensuring long-term success and a promising future.

The Rising Value of Beef Calves from Dairy Farms: A Strategic Shift in Breeding 

The higher value of beef calves from dairy farms has given much-needed relief from difficult input prices and limited margins. As a result, beef semen usage in dairy cows has skyrocketed; sales in 2021 will reach a record 8.7 million units, a significant increase from 6.2 million units in 2016.

Focusing on development and carcass features rather than just a black hide, dairies have developed their expertise to generate superior crossbred calves. Still, difficulties include varying animal weights and longer feeding times than natural beef cattle.

Says Hicks, “Full beef calves from beef embryos incorporated into a strategic dairy breeding program using in vitro fertilization (IVF) offer the benefits of consistent growth, increased average daily gain performance, and the potential for higher dairy profits.” This strategic dairy breeding program involves carefully selecting beef embryos and using IVF to ensure the birth of high-quality beef calves.

Day-old calves may bring in specific markets $850 or more than hybrid calves.

Recent studies at Texas Tech University clarify this difference:

  • Straight-bred beef cattle showed superior feed efficiency than dairy-beef crossbred cattle when size at maturity was accounted for.
  • Whether grown on conventional cow/calf operations or calf ranches, straight-bred beef calves behaved identically.
  • In crossbred calves, dairy genetics increased carcass leanness.

Due to improved facility fit and more consistent pen groups, research also revealed that embryo transfer into Holstein and Jersey cows produced straight-bred beef calves more moderate in frame size and more comprehensive, therefore more appealing to feeders and packers.

Navigating the Challenges of Crossbred Calf Integration in the Beef Value Chain

Integrating crossbred calves into the cattle value chain does not provide easy solutions either. The animals’ unequal sizes offer a significant challenge for management and cause disturbances during constant feeding and processing. Furthermore, hybrid calves usually need lengthier feeding times than native beef cattle. This more extended operation raises running expenses and requires more resources, thereby taxing producers. Although more revenues are appealing, these pragmatic challenges must be managed appropriately for long-term success.

Maximizing Gains with Full Beef Calves: Strategic Breeding for Enhanced Profitability 

Primarily using beef embryos, incorporating whole beef calves into dairy breeding programs has significant benefits. Their consistent growth compared to crossbreds results in better average daily gain performance and sound quality in the beef value chain, providing confidence and reassurance.

Another notable financial benefit is that just one-day-old whole beef calves, which show promise for additional dairy revenues, may sell for $850 or more. For dairy companies trying to increase profits, this makes them an exciting option.

Studies from Texas Tech University show the advantages of performance. Reducing feeding costs and increasing profitability depend on feed efficiency, which straight-bred beef cattle show higher than dairy-beef crossbreds.

Moreover, kids from straight-bred beef genetics, particularly with embryo transfer in Holstein and Jersey cows, can have a more moderate frame and greater width. These features help to create consistent pen groupings and better-fit facility demands, which attract feeders and packers.

These findings confirm that whole beef calves derived from beef embryos are a wise decision for dairy operations trying to negotiate market changes and guarantee long-term profitability.

Economic Projections and Strategic Preparedness: Crafting a Resilient Path Forward 

Supported by the USDA’s Economic Research Service May 2024 Beef Market Outlook, the present scene for beef-on-dairy initiatives seems bright. Projected to be $188 per hundredweight, Fed steer prices show a 3% year-over-year gain. Driven by restricted cow supply for feedlots, this increase points to attractive opportunities for beef embryo-based projects.

Programs based on embryos provide market needs for consistency and effective development. Dairies can generate whole beef calves with consistent growth and carcass features using embryo transfer methods, which would fit better in feeding and processing facilities.

Still, strategic readiness is vital. Dairies must improve marketing ties as the market recovers from post-drought and financial difficulties to guarantee market access and control pricing swings.

Constant Quality Assurance: Review calf quality often. It selects breeding plans that optimize long-term value, guarantee present gains, and increase resilience. Recording immunizations and passive transmission improves marketability and credibility in line with certifications in quality assurance and compassionate treatment.

As consumer demand for premium beef rises, take a forward-looking attitude. Dairies may maintain strict quality standards, consolidate strong marketing alliances, and be ready for future market shifts using present market circumstances.

Successfully Navigating Market Fluctuations Requires Strategic Planning and Building Resilient Relationships Within the Beef Value Chain 

Navigating market swings successfully calls strategy and strong bonds throughout the beef value chain. Here are some crucial pointers:

Connect with feeders, packers, and stakeholders to guarantee market access amid instability. Participate in humane handling certifications and quality assurance initiatives to show off the caliber of your calves and foster confidence.

Analyze calf quality with an eye on their general health and general condition. Market wet calves backed by extensive vaccination records and proof of effective passive transfer. This guarantees purchasers of their long-term survival and raises calf value.

Invest in breeding plans that meet the market’s needs. Selecting appropriate genetic combinations may result in faster performance and effective development. Review often and change your breeding plan to keep ahead of market changes.

To better prepare for market changes, it’s crucial to combine strategic vision, proactive management, and teamwork. This approach empowers you to stay ahead of market changes and control your operations.

The Bottom Line

A strategic approach is essential in the always-shifting beef-on-dairy industry. This market is rich but erratic. Dairy farms must make wise breeding decisions, establish close market ties, and guarantee calf quality to survive. Maintaining good standards and matching breeding with market demands will allow dairies to remain successful even with changes in the market.

Key Takeaways:

  • The current market for beef-on-dairy calves is lucrative, with day-old calves fetching $600 to $700 or more.
  • No market stays static, and the beef-on-dairy calf market is no exception.
  • Increased use of beef semen in dairy herds, with sales reaching a record high of 8.7 million units in 2021.
  • Full beef calves from in vitro fertilization (IVF) programs show better growth, feed efficiency, and market consistency.
  • Economic projections indicate favorable beef prices, but strategic planning is crucial to navigate potential downturns.

Summary:

The market for dairy-beef crossbred calves has grown significantly in recent years, with prices reaching $600 to $700 more than dairy calves. This has led to a surge in beef semen usage in dairy cows, with sales expected to reach 8.7 million units in 2021. Dairy farms have developed expertise to generate superior crossbred calves, but challenges include varying animal weights and longer feeding times. Full beef calves from beef embryos incorporated into a strategic dairy breeding program using in vitro fertilization (IVF) offer consistent growth, increased average daily gain performance, and potential for higher dairy profits. One-day-old whole beef calves may sell for $850 or more, showing promise for additional dairy revenues. To successfully navigate market fluctuations, dairy farms must maintain strict quality standards, consolidate strong marketing alliances, and be ready for future market shifts. Strategic planning, building resilient relationships, participating in humane handling certifications, and analyzing calf quality are essential for success. Investing in breeding plans that meet market needs and regularly reviewing and changing plans is crucial for staying ahead of market changes and controlling operations.

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Growth in Class III Milk Futures Amid Mixed Market Movements: CME Dairy Report – June 24, 2024

Find out the latest trends in Class III milk futures and market movements from the Chicago Mercantile Exchange. How will these changes affect your dairy farming plans?

Today, we observed relatively subdued activity across Class III and IV markets. Class III prices saw a general increase of 10-15 cents, influenced by a mix of spot results. Notably, only one Class IV contract has been traded, with butter and nonfat prices showing a decline. This slow start to the week is particularly noteworthy, given the high anticipation surrounding the recent Milk Production report, which is expected to have a significant impact on the market.

Mixed Movements in Milk Futures: Class III Climbs While Class IV Drags

ContractClass III Price ($/cwt)Class IV Price ($/cwt)
July 2024$19.87$21.21
August 2024$20.00$21.15
September 2024$20.10$21.10

The overall market movements for Class III and Class IV milk futures presented a mixed picture. Class III futures showed a moderate growth, increasing by 10-15 cents, which can be seen as a positive response to spot market variations. On the other hand, Class IV futures saw limited activity with predominantly downward trends, including a single contract traded and declines in butter and nonfat milk prices. This mix of movements sets the stage for a cautious start to the week, highlighting the potential risks and opportunities in the market following the recent Milk Production report.

Optimism in Class III Milk Futures Amid Mixed Spot Market Results 

Class III milk futures showed signs of optimism as prices rose by 10-15 cents across all contracts. This uptick was primarily a reflection of mixed spot market results. Specifically, block cheese prices increased to $1.8900 per pound, likely bolstering confidence among traders. In contrast, barrel cheese prices slightly declined to $1.9150 per pound. The divergence in spot prices seemed to fuel the cautious yet hopeful sentiment observed in the futures market.

Class IV Milk Futures See Limited Activity Amid Sluggish Market

Class IV milk futures were subdued, reflecting the overall sluggish activity in the market today. At the time of writing, only one Class IV contract had been traded, highlighting the lackluster interest in this segment. This cautious trading behavior was mirrored by declines in both butter and nonfat dry milk prices. Butter settled at $3.0650 per pound, giving up $0.0250, and nonfat dry milk followed suit with similar downward adjustments. The dipping prices in essential dairy commodities likely contributed to the softer stance in Class IV futures.

Spot Market Sees Mixed Cheese Prices and Declines in Butter and Nonfat Dry Milk

ProductPrice Per PoundChange
Cheese Blocks$1.8900+ $0.0450
Cheese Barrels$1.9150– $0.0050
Butter$3.0650– $0.0250
Nonfat Dry Milk$1.19– $0.0025

The day’s spot market activity saw block cheese prices lift to $1.8900 per pound, marking an increase of $0.0450 per pound with two lots traded. In contrast, barrel cheese prices slipped slightly to $1.9150 per pound, a decrease of $0.0050, with just one load exchanged. 

Butter prices also dipped today, settling at $3.0650 per pound, down by $0.0250 per pound with one lot sold. Meanwhile, nonfat dry milk prices decreased by $0.0025 to $1.19, with three sales recorded, ranging from $1.19 to $1.1950 per pound. 

This pattern of dipping prices across essential dairy commodities indicates a market cautious at the start of the week, especially following the highly anticipated Milk Production report.

Mixed Futures Activity: Class III Shows Gains, While Class IV and Butter Futures Retreat

In today’s market, July Class III futures rose by 12 cents to $19.87 per hundredweight, indicating positive movement despite mixed spot results. This rise contrasts with the nearby Class IV contract, which saw a decrease, losing 12 cents and settling at $21.21 per hundredweight. 

Trends in Q3 “all-cheese” futures were upbeat, ending the day positively at $2.0333 per pound, adding $0.0220. However, the butter futures market mirrored the spot market softness, with July futures coming in at $3.0550 per pound, down $0.0300.

Promising Crop Conditions: Corn and Soybeans Show Strong Potential

CropDate% Planted% Good to Excellent
CornJune 23, 202498%69%
SoybeansJune 23, 202497%67%

The latest Crop Progress report sheds light on the current status of crucial feed crops, such as corn and soybeans, which are vital to the dairy industry. As of June 23, 69% of the corn crop was rated good to excellent. This indicates a robust potential for feed quality, directly impacting feed costs and milk production efficiency. Similarly, soybean planting has nearly completed, with 97% of the crop in the ground and 67% rated good to excellent. This positive outlook in crop conditions could lead to stable or reduced feed prices, offering a silver lining for dairy farmers navigating volatile market conditions.

The Bottom Line

The CME dairy report for June 24, 2024, highlights modest growth in Class III futures, with prices rising 10-15 cents. However, Class IV futures were primarily static, with minimal trading activity. Key spot prices for blocks and barrels showed mixed results, indicating a potentially stabilizing market. Additionally, butter futures softened slightly. 

For dairy farmers, these market movements suggest a cautiously optimistic outlook. The increase in Class III futures might signal improving dairy margins, especially as feed costs are expected to stabilize with promising crop progress reports. Keeping a close eye on market trends through resources like the CME and Progressive Dairy will be crucial for making informed decisions. Utilizing tools like Dairy Revenue Protection could offer additional security against volatile price swings, ensuring your operations remain resilient in the coming weeks.

Key Takeaways:

  • Class III milk futures showed modest growth, rising 10-15 cents.
  • Class IV milk futures experienced minimal trading activity and a decline in prices.
  • Block cheese prices increased, while barrel cheese prices fell slightly.
  • Butter prices and futures saw a decrease, with minimal trading activity.
  • Corn crop progress remains strong, with 69% rated good to excellent.
  • Soybean planting is nearly complete, with a 67% good to excellent rating.
  • Dairy margins are projected to improve for the rest of the year due to stronger milk prices and lower feed costs.

Summary: 

The dairy market has seen a mixed start to the week, with Class III and IV milk futures showing moderate growth and a cautious outlook. Class III prices increased by 10-15 cents overall, driven by mixed spot results. However, Class IV futures saw limited activity with predominantly downward trends, including a single contract traded and declines in butter and nonfat milk prices. This mix of movements sets the stage for a cautious start to the week, highlighting potential risks and opportunities in the market following the recent Milk Production report. Block cheese prices increased to $1.8900 per pound, while barrel cheese prices slightly declined to $1.9150 per pound. July Class III futures rose by 12 cents to $19.87 per hundredweight, indicating positive movement despite mixed spot results. Q3 “all-cheese” futures ended the day positively at $2.0333 per pound.

Milk Futures Predict Brighter Prices Ahead Amid Market Volatility and Rising Demand

Learn how milk futures suggest better prices ahead despite market volatility and rising demand. Will tighter supplies and more exports lift dairy markets?

Understanding the market dynamics, especially the recent trends in Class III futures, is crucial. It can equip you with the knowledge to navigate through these uncertain waters. Stay informed and be prepared for fluctuations that could significantly impact your bottom line.

MonthClass III Futures Price ($ per cwt)Class IV Futures Price ($ per cwt)
January21.3523.50
February22.1024.30
March20.8523.00
April19.6022.10
May18.5021.00
June19.2022.40

Milk Futures Signal a Brighter Horizon for Dairy Farmers 

The potential for a brighter horizon for dairy farmers this year is signaled by milk futures. If spot prices hold, milk prices could surpass last year’s levels. This optimistic outlook is driven by several factors, including increased demand and supply constraints, which could further boost prices. 

Firstly, increased demand plays a significant role. Both domestic and international markets show a heightened appetite for dairy products, especially cheese and butterfat. 

Secondly, supply constraints could further boost prices. Cheese inventories haven’t exceeded last year’s levels. If demand continues to rise, the supply may struggle to keep pace, pushing prices upward. 

It’s also worth noting that volatility in recent milk markets could become more pronounced as summer progresses. The indicators point positively toward better milk prices compared to last year.

MonthCheese Exports (Metric Tons)Butterfat Exports (Metric Tons)
January24,0006,500
February22,5006,200
March26,0006,800
April28,5008,000
May27,0007,500

The Stability in Cheese Inventory: A Beacon for Dairy Farmers 

The stability in cheese inventory signals good news for dairy farmers. With international demand rising, especially in quicker-rebounding markets, you can expect further price gains. High cheese exports will likely continue, cushioning against domestic shortages. 

Butterfat exports surged 23% in April, hinting at record butter prices. If domestic consumption follows suit, the dairy sector could have a profitable year. Watch these trends closely as they shape market dynamics. 

The crop outlook remains strong despite planting delays. With 75% of corn rated good/excellent, a bountiful harvest is expected. This could lower feed costs and boost profits. While some input costs are high, stable grain prices and improving milk futures suggest a better income over feed margin. 

As summer progresses, a proactive approach is essential. The market’s volatility demands your attention. Monitor both local and international trends to navigate the ups and downs, maximizing gains and minimizing setbacks.

Record Cheese Exports: A Promising Outlook for Dairy Farmers

International cheese demand has surged, with record-high cheese exports in March and April. This increase has provided strong market support. More domestic cheese is being sold internationally, reducing inventory levels and potentially tightening supplies. 

The impact on future prices could be significant. Continued strong demand and tighter supplies may boost cheese prices. As global market dynamics favor U.S. cheese, this could mean better margins and a more stable income for dairy farmers.

The Butter Market: Rising Exports Foreshadow Potential Records

The butter market is showing robust signs. In particular, April witnessed a substantial increase in butterfat exports, soaring by 23%. This upward trend in exports is not just a fleeting moment; it sets a solid foundation for potentially record-high butter prices this year. As both domestic and international demand for butter continues to rise, the market outlook becomes increasingly favorable. This spike in demand, coupled with the surge in butterfat shipments, could very well propel butter prices to new heights, instilling confidence in dairy farmers about the market’s potential.

April’s Income Over Feed Margin: A Glimpse of Dairy Farming Resilience

April’s income over feed price was $9.60 per cwt, marking the second month without Dairy Margin Coverage payments. This positive signal for dairy farmers shows profitable conditions without government support. 

Looking ahead, the stability of grain prices and the positive trend in milk futures should inspire optimism. Despite planting delays, grain prices remain steady, and 75% of the corn crop is rated good to excellent. A strong crop could mean lower grain prices and feed costs, potentially boosting income over feed margins and improving profitability. This promising outlook could reduce reliance on Dairy Margin Coverage payments, offering a brighter future for dairy farmers. 

With steady or falling grain prices and positive milk futures, dairy farmers might see continued profitability, reducing reliance on Dairy Margin Coverage payments. This outlook benefits farmers navigating market volatility.

Grain Market Conditions: A Silver Lining for Dairy Farmers

Let’s shift focus to the grain market. Planting delays have yet to affect grain prices significantly. The early corn condition looks very positive, with 75% rated as good to excellent. That sets the stage for a robust harvest. 

If this trend holds, expect a large corn crop, likely lowering corn prices. This means reduced feed costs for dairy farmers, leading to better income over feed margins and improved profitability despite volatile milk market conditions.

The Bottom Line

The dairy market is experiencing significant volatility, especially in Class III futures. However, current trends suggest milk prices could improve. Cheese inventory is stable, hinting at tighter supplies if demand rises. Meanwhile, cheese and butterfat exports have surged, boosting market confidence. 

In April, income over feed margins was resilient, with stable grain prices suggesting favorable conditions for dairy farmers. Despite some planting delays, strong crop conditions for corn indicate ample supply and potentially lower feed costs. These factors contribute to a positive milk price outlook if spot prices hold and demand grows.

Key Takeaways:

  • Milk futures suggest better prices compared to last year if current spot prices hold.
  • Demand dynamics: Improved international cheese demand boosts market optimism.
  • Cheese inventory levels remain stable, indicating potential supply tightening.
  • April saw a 23% increase in butterfat exports, hinting at possible record-high butter prices.
  • Grain market: Initial crop conditions are favorable, potentially leading to lower grain prices.
  • No further Dairy Margin Coverage program payments expected due to improved income over feed conditions.

Summary: The dairy market is experiencing significant volatility, especially in Class III futures, and this turbulence is expected to persist and escalate as summer approaches. Milk futures indicate a brighter horizon for dairy farmers this year, with spot prices holding and milk prices potentially surpassing last year’s levels. Increased demand for dairy products, particularly cheese and butterfat, is driving optimism. Supply constraints could further boost prices, as cheese inventories haven’t exceeded last year’s levels. Stability in cheese inventory signals good news for dairy farmers, as international demand is rising, especially in quicker-rebounding markets. High cheese exports will likely continue, cushioning against domestic shortages. The butter market is showing robust signs, with record-high cheese exports in March and April providing strong market support. More domestic cheese is being sold internationally, reducing inventory levels and potentially tightening supplies.

Milk Markets Surge Higher on Late Week Buying: Class III & IV Gain Momentum

Uncover the dynamics driving late-week surges in the milk markets. Witness the ascent of Class III and IV milk prices. Eager to learn about the latest movements in dairy and grain sectors? Continue reading.

class three milk prices

The milk markets experienced a volatile week, culminating in a significant late-week surge that notably impacted Class III and Class IV milk prices. The strength of class III milk, particularly in the latter half of the year, was a key highlight. July’s contracts saw a substantial increase of 43 cents to $20.29, while August mirrored this trend with a 46-cent climb to the same price of $20.29/cwt. In contrast, earlier months such as May and June were more subdued, with May closing at $18.60 and June showing a minimal increase of just 2 cents to $19.38/cwt. 

Market analysts observed, “The late-week buying frenzy brought a refreshing upswing to the milk markets, particularly benefiting Class III prices in the latter months of the year.” 

Class IV milk prices demonstrated a more tempered response, maintaining stability despite a modest gain in butter prices. May’s contracts settled at $20.57, June at $20.84, and July reached $21.31/cwt. These figures underscore the nuanced variations within the different milk classes, reflecting broader market dynamics and investor sentiment.

Class III Milk Prices Enjoy Summer Surge Amid Subdued Early-Year Performance

DateMayJuneJulyAugust
Monday$18.60$19.36$19.86$19.83
Tuesday$18.60$19.37$19.96$19.94
Wednesday$18.60$19.38$20.09$20.05
Thursday$18.60$19.38$20.15$20.15
Friday$18.60$19.38$20.29$20.29

Class III milk experienced a notable improvement in the latter part of the year. July increased by 43 cents to reach $20.29 per hundredweight (cwt), while August followed with a rise of 46 cents, also hitting $20.29/cwt. In contrast, May ended at $18.60, showing little change, and June gained just 2 cents to close at $19.38/cwt. These numbers highlight a clear seasonal trend, with more robust market dynamics emerging in the summer months for Class III milk.

Class IV Milk Market Remains Steady Amid Modest Butter Price Gains 

FutureMayJuneJuly
Monday$20.57$20.84$21.31
Tuesday$20.57$20.84$21.31
Wednesday$20.57$20.84$21.31
Thursday$20.57$20.84$21.31
Friday$20.57$20.84$21.31

The week in the dairy market has displayed notable shifts, particularly in the Class IV milk futures. Despite the muted movement, the overall trend leans toward stability with a few upward adjustments compensating for earlier lukewarm phases. For a clearer illustration, let’s delve into the Class IV milk futures trends over the past week: 

Class IV milk prices remained steady compared to Class III, showing minimal volatility. Class IV milk held its ground despite a modest 6-cent rise in butter prices. May closed at $20.57/cwt, June slightly up at $20.84, and July continued this trend at $21.31. These figures highlight a consistent market with gradual gains, reflecting the steady performance of Class IV milk.

The CME Spot Trade Closes the Week with Significant Activity in the Dairy

ProductMondayTuesdayWednesdayThursdayFridayWeekly Trend
Butter ($/lb)$3.03$3.04$3.05$3.07$3.09▲6 cents
Cheddar Blocks ($/lb)$1.81$1.81$1.81$1.81$1.81
Cheddar Barrels ($/lb)$1.94$1.94$1.94$1.94$1.94
Dry Whey ($/lb)$0.41$0.41$0.41$0.41$0.41 1/2▲1/2 cent
Grade A Non Fat Dry Milk ($/lb)$1.16$1.16$1.16$1.16$1.16 3/4▲3/4 cent

The CME spot trade saw significant action in the dairy sector, especially in the butter and cheese markets. Butter prices rose 6 cents to $3.09 per pound, hinting at increased demand or limited supply, which could positively impact the broader dairy market. 

Cheddar cheese prices remained stable, with Blocks at $1.81 and Barrels at $1.94 per pound. This consistency suggests a balanced market without primary surpluses or deficits. 

The block/barrel spread stayed inverted at 13 cents, indicating supply concerns or quality preferences. Typically, Blocks are pricier due to their broader use and better quality. The sustained average price of $1.87 1/2 per pound reflects the market’s effort to balance these differences, providing insight into future price trends in the dairy sector.

Powder Markets Show Promise with Incremental Price Gains

ProductPrice (per lb)ChangeTrend
Dry Whey$0.41½+1 centUp
Grade A Non Fat Dry Milk$1.16¾+½ centUp

The powder markets exhibited a solid performance this past week, signaling promise in this sector. Dry Whey climbed by a penny to $0.41 1/2 per pound, indicating a steady demand. This rise may suggest market stability amid fluctuating dairy prices. 

Grade A Non-Fat Dry Whey also increased by 1/2 cent, reaching $1.16 3/4 per pound. This small but significant uptick reflects the strength of the dairy industry and hints at a balanced supply and demand. These incremental gains not only reinforce market stability but also inspire confidence in the potential growth of the powder markets, which could have broader economic implications for those invested in commodities.

Grain and Feed Markets Reflect Broader Economic and Environmental Instabilities

CommodityContract MonthClosing PricePrice Change
CornJuly$4.46 1/4Down 2 1/2 cents
SoybeansJuly$12.05Down 4 3/4 cents
Soybean MealJuly$364.10/tonUp $1.10
WheatJuly$6.78Down 2 1/2 cents
RiceJuly$17.67Down 16 cents
Feeder CattleAugust$256.40Down $2.67

The grain and feed markets faced a notable shift towards the weekend, marked by varied price movements across critical commodities. Corn slipped slightly, with July futures closing at $4.46 1/4, down 2 1/2 cents. This minor dip mirrors broader market trends where corn battles to sustain momentum amid changing demand-supply dynamics. Soybeans followed suit, with July futures dropping 4 3/4 cents to $12.05 per bushel, reflecting ongoing market volatility and the impact of trade conditions and weather on crop yields. 

Despite a modest rise in soybean meal prices, the feed markets remained complex. July prices increased by $1.10, finishing the week at $364.10 per ton. However, prices remained over $25 per ton below earlier weekly highs, underscoring the intricate and volatile nature of the feed markets. These shifts serve as a reminder of the need for caution in the grain and feed sectors, mirroring the broader economic and environmental uncertainties.

The Bottom Line

The week concluded with a notable rise in milk markets, spurred by a robust late-week surge in Class III milk. Gains in July and August highlighted its strength, contrasting a quieter early-year performance. Class IV milk displayed a steadiness, with modest butter price increases

Significant activity marked the CME spot trade, with butter and cheese showing price movements and powder markets finishing the week with gains. In contrast, grain and feed markets slid into the weekend, impacted by economic and environmental challenges. Corn, soybeans, and soybean meal exhibited varied performances, reflecting the intricate dynamics of agricultural markets.

Key Takeaways:

  • Class III milk prices experienced an encouraging surge in late-week trading, showing notable gains for July and August contracts.
  • Earlier months like May and June saw more modest price movements, with minimal increases observed.
  • Class IV milk prices remained relatively stable, with slight upward adjustments despite varied commodity performance within the dairy market.
  • The CME spot trade highlighted a 6-cent gain in Butter prices, while Cheddar Blocks and Barrels maintained their previous levels, keeping the block/barrel spread inverted.
  • Powder markets closed the week on a positive note, with Dry Whey and Grade A Non-Fat Dry Whey inching upward.
  • Grain and feed markets displayed downward trends, with slight declines in corn and soybeans and a notable drop in soybean meal from earlier highs.

Summary: The milk markets experienced a volatile week, culminating in a late-week surge that significantly impacted Class III and Class IV milk prices. Class III milk experienced a significant improvement in the latter part of the year, with July’s contracts seeing a substantial increase of 43 cents to $20.29, and August mirrored this trend with a 46-cent climb to the same price. In contrast, earlier months such as May and June were more subdued, with May closing at $18.60 and June showing a minimal increase of just 2 cents to $19.38/cwt. Market analysts observed that the late-week buying frenzy brought a refreshing upswing to the milk markets, particularly benefiting Class III prices in the latter months of the year. The dairy market displayed notable shifts, particularly in Class IV milk futures, with the overall trend leaning toward stability with a few upward adjustments compensating for earlier lukewarm phases.

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