Do Milk Price Patterns Indicate Future Movement?
Barrel cheese has been the beneficiary of strong buying interest recently with prices gaining 43 cents over the course of two weeks. This has been a surprise as barrels are reported to have more plentiful supplies than blocks. Buyers have been aggressive and have been trying to outbid each other to obtain product. The last time we saw a move higher similar to this was during the period from early September 2022 through early October 2022. The gain totaled 40 cents during that period.
Over the period of the next five months, prices fell 72 cents to the lowest level since November 24, 2021.There have been a number of similar price increases back through 2021. Once the market topped, prices fell faster than it increased (see chart). In 2020, there were other factors such as the Farmers to Families Food Box program which created substantial volatility. Currently, there has not been a significant change of fundamentals leaving the recent increase somewhat suspect.
March 21, 2023