Dairy industry in “panic mode”
Dairy markets moved higher for the second consecutive day on Tuesday. Cash cheese barrels have gained 2.25 cents in the last two days, blocks are up 2.5 cents and butter has gained 6.5 cents. Class III futures have responded accordingly with July up 40 cents, August up 49 cents and September gaining 47 cents so far this week.
The Monthly Cold Storage Report from USDA on Monday making traders a little nervous. As of May 31st there were 1.067 billion pounds of cheese and 192.5 million pounds of butter in the nation’s warehouses. Compared to a year ago, cheese stocks are down 7 percent and butter plunged 40 percent. A year ago we had a record 322 million pounds of butter in storage. The fact is U.S. milk production is not increasing fast enough to keep up with global demand. Eric Meyer of HighGround Dairy says the industry is in a “panic mode to protect themselves prior to the summer months when seasonal production and component levels reach their lows.”
Cooperatives Working Together (CWT) has accepted 5 requests for export assistance from Dairy Farmers of America, Michigan Milk Producers Association and Northwest Dairy Association (Darigold) to sell 158,733 pounds of Cheddar and Gouda cheese, 2.315 million pounds of butter (82% butterfat) and 1.574 million pounds of whole milk powder to customers in Asia and the Middle East. The product will be delivered June through November 2014.
Year-to-date, CWT has assisted member cooperatives in selling 57.232 million pounds of cheese, 50.229 million pounds of butter and 13.596 million pounds of whole milk powder to 41 countries on six continents.
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