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Dairy markets “range trading”

A little pressure on dairy markets from the September milk production report on Thursday. USDA reports total U.S. output for the month was up 1.7 percent compared to a year ago and production for the third quarter was up 1.4 percent from the third quarter of 2010. Traders did note California production increased less than one percent in September as heat and high feed prices came into play. Production for the quarter in California was up 2.5 percent from a year ago.

Overall, the dairy markets seem to have settled in to range trading, cash barrels trade from $1.64 to $1.785 with the blocks in a little smaller range $1.68 to $1.765. Dairy Market News says milk availability still varies across the country with 120 loads shipped into Florida this week. Securing trucks is a growing challenge as more are being used to haul hay and feed to the drought-stricken areas in the southern Plains. Cost of feed is becoming a big issue from Texas to California and the latest winter outlook from NOAA shows no relief in sight for the area.

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