Milk futures had a nice run this spring from the April lows rallying nearly $5 and getting many contracts back about the $21 mark.
However, the market has corrected off the highs.
Bryan Doherty with Total Farm Marketing says a surge in cheese demand and prices helped to push milk futures this spring.
“It had a strong run, short covering and investment money bought in and some hot weather in Southern production areas was also a factor. However, today it’s easier to keep cows comfortable so you don’t see a big impact on production,” he says.
However, consumer demand for both cheese and butter has stalled out due to inflation and push back against higher prices.
“Cheese prices have leveled out around $2.0o, it looks like butter has leveled off. So, unless these components take off, we’ve probably seen the extent of the rally,” he points out.
Milk prices have corrected off the recent highs as a result.
He says the stronger dollar has limited exports of U.S. dairy products as well.
Doherty advises producers take advantage of these prices to hedge before the market erodes any further.
