Cash cheese and butter held steady but nonfat dry milk and Class III futures nudged a little higher on the Chicago Mercantile Exchange on Wednesday.
Still some reaction to Tuesday’s 10 percent increase in the Global Dairy Trade index. HighGround Dairy is skeptical saying that while the drought in New Zealand is pushing the market, the fact is there is plenty of surplus dairy around the globe. In fact, HighGround maintains New Zealand’s dairy producers would have dried cows off earlier this year anyway because of low prices. They surmise that unless we see supply issues in the coming months in other parts of the world, this rally remains stuck within the context of a longer-term bear market.
Dairy Market News says processors see cheese as the best place to put milk. Spot loads are selling below Class in the Midwest. Cheese makers are very busy taking advantage of an ample supply of relatively cheap milk, stable cheese prices and good buyer interest to push their plants. The price is right to put cheese, especially cheddar into aging programs as well. National weighted average price for 8 ounce blocks in the Midwest is $2.19, $2.28 in the Southeast, $2.43 in the Northeast with the national average at $2.47. The report says a number of manufacturers do not expect any significant change in the situation in the coming weeks.
By Bob Meyer
Source: Brownfield Ag News for America