News

Cheese down, Class III up

Dairy markets continue the trend of declining cheese prices and increasing Class III prices this week. On Thursday, cheddar barrels declined another 3.75 cents to close at $2.18 while blocks held steady at $2.21. Class III futures with strong increases, May added 45 cents, June increased 48 cents, July was up 50 cents. There were double-digit increases on all of the remaining 2014 contracts.

Since last Thursday, barrels have lost 7.75 cents, blocks are down 7 cents, the May Class III is up 72 cents, June is 44 cents higher and July has added 66 cents.

The cheese market is being pressured by increasing milk production and lower global prices.  Processors say the spring flush is beginning in the eastern half of the country; spot loads are becoming increasingly available ranging from $1.25 over to $2.00 under Class. Florida exported 140 loads this week compared to 100 last week. Out west, California and Arizona milk production has plateaued while New Mexico is increasing slowly. Daytime temperatures are warming seasonally in the Southwest by the nights are still cool.

Ag Market News says Class II orders are steady to higher with notable increases in cultured products and whipping cream. Additional milk was skimmed over the holiday weekend.

Dairy cow slaughter totaled 246,000 in March, 28,000 less than in March of 2013. Year-to-date dairy cow slaughter is 753,000 compared to 830,000 in the first three months of 2013. The high milk prices are prompting farmers to hang-on to more cows.

However, traders are still mindful of that March milk production report which clearly indicated milk production is not increasing that much and things are going to have to get going if we are going to make the predicted increase in total milk production this year.