Milk prices have been following the same pattern for weeks: choppy markets, steadily grinding lower. This week's fundamentals suggested the same, but the market was more positive, according to Robin Schmahl of AgDairy. He says the week brought movement up in the Class III milk futures. That’s good news, considering the Federal Order Class III price for January was the lowest it has been since 2011.
“The March contract spent some time above $14,” Schmahl says.
This week was full of market movers, including the Global Dairy Trade auction, which was down again in every category.
Unfortunately, this is the third time in a row that the monthly auction has pushed lower. Most concerning, according to Schmahl, U.S. butter is almost 90 cents more expensive than butter sold during the Global Dairy Trade Auction. He says that’s not good news for exports.
Listen to the Weekly Dairy Market Wrap with Robin Schmahl below:
The dairy products production report released this week showed increased production in all categories. The Federal Marketing Order also released January prices this week. Class II came in at $14.19, Class III at $13.72, and Class IV $13.24. This is the lowest Class III prices have been since 2011, and the lowest Class IV prices have been since 2014, according to Schmahl.
Notable market movements this week include:
- Block Cheese up $0.01
- Barrel Cheese up $0.035
- Butter down $0.03
- NFDM up $0.0375
“Prices have been lower,” Schmahl says, “but when this hits the milk checks, it’s going to start hurting a lot more.”
Schmahl says he doesn’t see much fundamental change in that in the near term.