News

Class III milk futures jump

While cash cheese held steady on the Chicago Mercantile Exchange on Friday, Class III futures jumped in response to the worsening drought and record-high grain prices. Traders still mulling-over that June Milk Production Report this week which showed a paltry 0.9% increase in production over a year ago. That is the smallest year-over-year increase we have seen this year and is most likely the last increase we will see for a while. The September, October and November contracts all pushed over $19.00 with December just 4-cents short of the mark. We saw 15 to 40-cent gains through 2013. For the week, cash cheese barrels are up a penny-and-a-half, blocks are 3.75 cents higher, butter was up 4 cents.

The monthly Cold Storage Report from USDA shows total cheese in storage at the end of June 1.049 billion pounds up 25 million pounds from May but 2 million below June of 2011. American cheese stocks were at 629.87 million pounds up 10 million from May and from a year ago. Butter in storage at the end of June totaled 242.69 million pounds down 19 million from May but 52 million above a year ago.

229,000 dairy cows went to slaughter in June, 22,000 less than in May but 10,000 more than June of last year. Dairy cow slaughter for the first six months of the year totaled 1.52 million head, 65,000 more than the first half of 2011. Many expect those numbers are increasing already as high feed prices are increasing cull-rates.

The USDA Cattle Inventory Report released on Friday shows 9.2 million dairy cows in the country as of July 1st, unchanged from a year ago. However, there were 4.1 million dairy replacement heifers at the beginning of this month which is 2 percent less than a year ago.