Class III Price Driven By Dry Whey, China

The Class III milk and cheese markets have started 2024 mixed. Ever.Ag broker and agent Kathleen Wolfley says producers should keep an eye on the dry whey market. If that market moves just a penny, it can influence Class III milk by about 6 cents.

“Whey prices seem to be relatively stable going into 2024,” she says. “Yet, we’ve seen pretty good demand for high-protein whey, and there’s certainly potential that if we continue to see good high-protein whey demand, and dry whey markets tart to tighten up a little bit… that could tighten things up and give the Class III market a little bit of a boost.”

When it comes to cheese, Wolfley says the U.S. is in a weak demand position both domestically and internationally. U.S. consumers haven’t been going out to eat. Exports aren’t that stellar, either.

Wolfley adds that China is the country to watch as their demand was somewhat subdued in 2023, and the U.S. has seen quiet activity from them. While the Middle East has picked up some of the slack, it’s not making a big difference.

“Overall, I think that the GDT (Global Dairy Trade) auction was relatively quiet — not really a big mover and shaker at least to start the year,” she says.

From a European perspective, milk supply was sluggish to end 2023, Wolfley says. Germany and France both saw lower milk production — they are the top two milk-producing countries in the EU.

“As we start 2024, the expectation is that we could continue to see relatively lackluster milk production out of the region,” she says. “They have more environmental restrictions that could ultimately impact some of their growth potential here in the new year.”