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Milk Markets Offer Better Returns

The T.C. Jacoby Weekly Market Report Week Ending November 3, 2023


There was a lot of red ink on LaSalle Street this week, and every product at the CME spot market finished lower. Most milk futures also finished the week below where they began it, although losses were relatively modest. November through January Class III futures traded in the low $17s. November Class IV futures settled at a buoyant $20.75 per cwt., but the other contracts hovered in the $18s and $19s.

There was a lot of red ink on LaSalle Street this week, and every product at the CME spot market finished lower. Most milk futures also finished the week below where they began it, although losses were relatively modest. November through January Class III futures traded in the low $17s. November Class IV futures settled at a buoyant $20.75 per cwt., but the other contracts hovered in the $18s and $19s.


Class IV futures are adequate to pay the bills, but most producers receive at least some Class III revenue as well. The milk markets are offering much better returns than they did this summer, but they’re still not likely to bring widespread prosperity. Nonetheless, there are indications that milk production is improving. Cooler temperatures are boosting milk output and components. Slaughter volumes have been running light for at least seven straight weeks. Some of the slowdown in cull rates can be dismissed as the inevitable consequence of aggressive culling this summer, which left fewer low-production or ailing cows to be killed this fall. And tight heifer supplies are forcing some dairy producers to rein in cull rates just to retain their head counts. But there is no denying that slaughter volumes have been lower than expected for longer than expected, hinting at growth – or at least stabilization – in the milk-cow herd.


Sarina Sharp

Nov. 6, 2023

dairybusiness.com


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