News
U.S. Dairy Herd Shrinks in March; First March Decline Since 2009
A short-term recovery in milk and dairy product values has been underway since March, which could curtail continued declines in the milk cow herd. Class III milk prices were up 80 cents per cwt. in March and 25 cents in April. According to CME cash prices reported in Dairy Market News, non-fat dry milk prices averaged 71 cents per pound during the first quarter, dropping below 70 cents in some weeks, but have rallied into the mid-80’s in early May. Currently, butter prices are trending higher, approaching $2.40 a pound, 5% higher than a year ago. U.S. inventories of butter and American-type cheeses are at similar levels to a year ago, but non-fat dry milk and non-American-type cheese inventories are up close to 10% from a year ago. In all cases, last year’s inventories were considered large, if not unprecedented. The price rallies in these markets have caught many industry observers by surprise.
Globally, dairy prices have been on the upswing this spring. Oceania milk powder prices are up 4% to 5% since the end of March while Western Europe price is up about 10%. Both of those increases are less than U.S. powder prices have risen during the same interval. That could mean that U.S. milk powder prices were currently a bargain, but that might not be the case going forward. Year-over-year, non-fat U.S. dry milk exports increased 30% year-over-year in February and were up close to 40% in March
