Strong demand has been the underlying theme this week. With restaurants reporting strong demand and retail still having good sales, the class 3 market is pushing $20.
Spot Market Recap
Cheese operations in the Northeast are receiving plenty of milk for active production schedules. Numerous grocery stores are reporting solid demand, summer food programs are expanding, and food service sales continue to display stronger numbers. Inventories remain in balance for the near term. In the Midwest, producers are running active schedules with plenty of milk to go around. Sales remain strong but customers are reluctant to take on extra product at current prices. The market tone, overall, is solid. In the West, retail demand remains steady with food service demand improving. Asian exports have also picked up in recent weeks. There is plenty of milk for cheese producers to run full production schedules. Barrel inventories are tight, while blocks are more available. The current market tone in the West is firm.
In butter, cream is reported to be a little tighter this week, but butter production remains steady. Inventories are balanced with the East seeing a little increase in stocks. Both retail and food service demand is steady to lower this week, but bulk prices are ranging from 1 to 8 cent above the market this week.
Dry Whey prices remain steady this week. Stocks remain tight with customers clearing loads in the mid 60 cent range. There is occasionally an extra load available and bids are ranging from 65 cents to 70 cents. Domestic demand is spotty but global demand is strong. The market tone is still running bullish.
Still no slow down in milk production even with the higher grain prices. In fact milk production could be higher but for the quotas from some of the processing plants. Good demand has created a bottle neck at the manufacturing level and this is pushing class 3 prices towards the $20 mark. With expanded school lunch programs that will run through the summer and some extract export demand we are seeing prices push higher more then a year out. The food service pipeline is starting to get filled and those customers are starting to move toward a more as they need it approach. If you have not capped your milk already I would look to buy 1900 puts and selling the 2100 calls for the rest of 2021. Starting at even in the front months and pay up to 20 cent as you get toward the end of the year. Give us a call for a more personal recommendation.