Dairy Markets Find Weekly Gains

• Spot products continue to find eager buyers, butter and cheese prices finished the week higher while powder and whey were both lower.
• Milk futures in Q3 and Q4 for both Class III and IV found gains on the week, breaking multi-week trends lower.
• Dairy cow culling rates have continued to be well above last year’s totals. For the week ending 7/1, rates were 14.5% higher YoY, the highest total for this week in 10 years.
• Fundamental reports and events next week include GDT on 7/18, Milk Production report on 7/20, Cattle and Cattle on Feed report on 7/21.

Buyers were not absent in the spot trade this week, continuing a strong trend in the cheese, butter, and whey markets, but struggling to find buyers for powder loads this week. The spot cheese price has rebounded off a multi-year low price for finishing higher for the second straight week, while also continuing to find buyers at these higher prices. Over the last three weeks alone, 202 loads of barrels have exchanged hands and the cash price was able to add 5 cents per pound to the block/barrel average this week. This week saw 75 loads of blocks and barrels get traded. Butter maintains its trend higher with a 5th week in a row of higher prices, rising from $2.365/lb in the week of 6/12 to close this week at $2.55. This week there were 45 loads of butter traded and over the last three weeks, 75 loads have traded. The strength in the spot markets lifted milk prices out of their downtrend and boosted Q3 and Q4 averages in both Class III and Class IV higher. The Q3 average for Class III and IV were up 27 and 44 cents, while Q4 averages were up 27 and 69 cents, respectively. The Q4 average for Class IV had drifted lower for 6 straight weeks before this week’s bounce, while the other quarters all turned around two-week trends lower. Continued year-over-year growth for dairy cow culling rates maintain and next week’s Cattle reports may give continued incentive to actively cull with all-time highs in cattle prices.