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Are Milk Prices Ready to Rebound?

Milk income has been substantially lower this year than 2022. There had been hope that the low milk prices of this summer would be a bottom and that prices would cycle back up again. Well, they did that to some extent with Class IV prices far exceeding Class III. Butter price found exceptional buying interest moving to new highs into early October before the reality of supply and demand came back into focus. Cheese prices moved moderately higher for a short period. Class IV prices have exceeded Class III prices all this year. In fact, Class IV prices have been higher than Class III since October 2021. Historically, Class III has been higher, or prices have been very close to each other.

Since early October, butter price fell apart falling faster than it increased. Cheese prices came under pressure a bit later putting pressure on the market at a time when demand is generally strong, and prices hold at higher levels. Even though butter price fell substantially, it remains over $1.00 higher than cheese prices. This has Class IV price and futures running over $3.00 above Class III for the next three months. Class IV futures maintain a premium over Class III futures throughout the entire next year.


December 28, 2023


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