Milk Futures Look Positive. Will Higher Milk Production Change That?
September 3, 2020
While milk prices saw frightening drop-offs at the beginning of the coronavirus pandemic, they quickly began to rally in May as USDA programs took effect.
The government cheese buying program was the catalyst behind that move higher.
There was a new demand for dairy as children who were not in the school system still needed access to lunches during the summer months.
Then, as soon as that program ended for the short term, the milk futures market fall and Class III futures had a bearish reversal at the top of the marketplace. In fact, the September contract actually went back down to where it was at during the COVID selloff back in late March and early April.
Now, with the government cheese buying program and the Food for Families program back on through the end of 2020, milk prices are again starting to rally. But could the 1% jump in milk production slash those prices?