Market News

Milk production is strong but so is demand

No trading in the dairy markets on the Chicago Mercantile Exchange on Monday, the markets were closed in observance of Martin Luther King Day.

Milk production remains strong across the country although demand for fluid milk, butter and cheese remains strong. Dairy Market News reported the Northeast had surplus milk last week so excess loads were moved to the Midwest at discounted prices.  It will take a couple of days to assess how the heavy rains and ice affected dairy in the Eastern U.S. over the weekend.

The extra milk is going into cheese and cheese inventories are building although demand is expected to nudge higher with colleges re-opening and the Super Bowl coming up. Some wholesalers are looking to take advantage of the current prices and seller willingness to negotiate to lock-in beyond the second quarter.

The next Global Dairy Trade auction is Tuesday and all hopes are the index will increase for the third consecutive sale. U.S. prices are back in the global market ballpark with cheddar cheese at $1.40 and butter at $1.61 on the last sale.