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Milk prices and optimism falling fast

A dairy markets expert says the optimism for higher milk prices later this year is fading.

Mark Stephenson leads the Center for Dairy Profitability at the University of Wisconsin.  He says, “Right now, we have to at least set it aside and wait and see how much of what I think is causing most of this, whether it comes to fruition or not, and that’s the discussion of trade wars and retaliatory tariffs.”

Stephenson tells Brownfield the pending Chinese tariffs on dairy products are likely to cut exports, impacting prices here in the U.S.  “When those products aren’t for sale overseas, they stay home and they keep downward pressure on markets that I think have had some reasons for optimism until this time period.”

Stephenson says markets don’t like uncertainty, and there’s been enough information to make buyers and sellers nervous.  “No question about it, I think that the market has been reacting to the rhetoric.”

The USDA says there is a record amount of cheese in cold storage now, and the Chicago Mercantile Exchange has seen milk futures plummet.  Since the first of June, Class three milk prices for July have fallen $2.13 a hundredweight into the low dollar range.  August is down $1.93, and September is down $1.42.

Cash dairy prices have also fallen with the exception of dry whey.  Butter is eleven and a half cents lower since June 1st.  Cheese barrels are down $.3150 and blocks are down $.1475.  Nonfat dry milk has fallen $.0875 this month.  Whey has gone up $.0150 in June.

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