Milk, Product Prices Soften
Early strength in the Class III milk markets reversed course by the end of the day on Tuesday. 2017 prices closed 8 cents higher in November, but were 8 cents lower in December. First half 2018 prices settled 4-16 cents lower and closed with an average of $15.48 per CWT. Second half of 2018 prices gained 2-4 cents.
Class IV milk markets declined 17 cents in November and moved a penny higher in December. With Tuesday’s trade in November, the price has now moved to sub $14 levels.
CME spot product markets on Tuesday saw further price advancement in cheese but softness in butter and non-fat dry milk. Cheddar blocks traded twice and saw a bid to push the price a penny higher to $1.76 per pound. Barrels added 2.25 cents on 3 trades and 3 bids to close at $1.7325 per pound. The butter market continued its price erosion on Tuesday as another 2 cents dropped out of the market. In the end, 6 trades took place with butter settling at $2.25 per pound. Grade A nonfat dry milk softened a 1.75 cents to 73.24 cents on 3loads.
In other markets, cattle jumped 10.5 cents per pound in the last 7 trading sessions on the December 2017 chart. 2018 markets have followed suit out through April. While this move does come as a surprise, it is an opportunity for dairy producers to ensure higher values for future cull cows.