Cash cheese barrels gained a half-cent and blocks improved a quarter-cent on the Chicago Mercantile Exchange. The monthly Livestock, Dairy and Poultry Outlook from USDA on Wednesday nudged milk production estimates for this year a little higher to 189.9 billion pounds. The report cites a slow-down in cow culling, moderating feed costs and continued increases in production per cow as the reasons.
On the “plus” side, the world-wide economic recovery should lead to stronger consumption and demand both domestically and in the export market. Exports have been moderate so far this year but things should pick up as the economies in importing countries recover and supplies tighten in exporting countries like Australia and New Zealand.
Cheese prices are expected to average $1.49 to $1.54 per pound this year, butter should run between $1.42 and $1.50 and nonfat dry milk should climb in the second half of the year leading to an average of $1.10 to $1.50 per pound for 2010. As a result, Class IV milk is now pegged at between $13.40 to $14.00 this year, Class III is expected to average $14.10 to $14.60 putting the all-milk price between $15.45 and $15.95 per hundredweight.
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