Milk futures have recently increased, prompting dealers to become more open to the market. However, worries about future milk supply may grow as farms depart the dairy industry and the availability of dairy replacement heifers tightens dramatically. Cow slaughter has not risen as expected owing to low milk prices, but a tighter heifer supply will keep cows in demand.
The Bi-Annual Cattle Inventory data stated that the number of milk cows on January 1st was 9.358 million, down 41,000 from the previous year. The heifer-to-milk cow ratio is likely to tighten further in the coming years. Buyers of dairy products may have considered this and purchased supply earlier at cheaper costs, resulting in the subsequent price hike.
The strength of dry whey has given substantial support for the Class III market, with butter and cheese receiving the majority of attention in the cash market. Dry whey has gradually climbed, adding around 62 cents to the Class III pricing in the last three weeks. Butter is predicted to stay stronger than cheese, resulting in Class IV milk prices being much higher than Class III pricing.
Robin Schmahl, a commodities trader with AgDairy, the dairy business of John Stewart & Associates Inc. (JSA), feels that the ideas presented and the underlying facts from which they are derived are regarded to be credible but cannot be guaranteed. Any views presented herein are subject to change without notice, and the simulated performance outcomes have inherent limitations. Trading commodities futures and options on futures has a risk of loss and is not for everyone. Accepting this message means you realize and agree that you will not depend primarily on it to make trading choices.
