Fireworks Boom: Markets Explode
While Americans stand ready to celebrate their independence on the Fourth of July with festivities often involving fireworks, the rumblings heard off in the distance may not have been the sounds of the first ones to hit the air, but rather the explosion of a market.
Global dairy trade event number 215 was held on Tuesday, July 3, with the index of prices falling 5%, the single largest decline in the index since March 7, 2017. The flagship product in their auction, whole milk powder, dropped 7.3% to a price of $1.32 a pound. Its volume represents over half of what was traded. In this event, skim milk powder dropped 4.6% to 87 cents per pound, while butter dropped 4% to $2 and 39 cents a pound adjusted to 80% fat and cheddar fell 4.3% to $1.69.
These results weighed heavily on the CME spots session, where blocks fell 3 and ¼ cents to $1.55, Barrels fell even further dropping 6 and ¾ cents to finish at $1.36 and ¼ cents. Butter fell 5 and ¼ cents to finish at $2.20 cents while whey prices fell a penny to 40 cents a pound. Grade A nonfat dry milk was the lone survivor finishing unchanged at 74 cents. Class III markets were left battered from these results. The average price from now through the end of the year dropped 23 cents per cwt. to finish at $15.33. The Class IV market saw similar action by falling just 3 cents, bringing its average to $14.61.