Big dairy inventories put pressure on prices
A market advisor says the world dairy market can be challenging for the U.S. if big inventories continue to put pressure on prices.
Mike North is with Ever.ag. He tells Brownfield, “If we can’t relieve ourselves of the inventory, it doesn’t matter what the price is. The inventory will hang over our head forever.”
North tells Brownfield the U.S. is gaining some short-term cheese export sales. “The problem is it is happening just in the spot market, the very immediate near future. If you look at the forward curve for milk, on the cheese side specifically which influences our Class III price, that cheese forward curve takes us very quickly as we get into the second and third quarters back to levels where we’re clearly out of consideration by a foreign buyer.”
North says that’s especially true when you look at the strength of the U.S. dollar, so the market is not getting the 6, 9, and 12-month export deals that show strong demand for U.S. dairy.