The Class III milk market has experienced significant volatility in recent weeks, with prices fluctuating and market participants seeking clear direction. Kathleen Wolfley, an agriculture broker with Ever.Ag, provided insights into the current dynamics and future outlook for Class III milk.
“We’ve seen a lot of choppiness in the marketplace over the last couple of weeks, with new life-of-contract highs in the second-half futures market two weeks ago, followed by a retracement last week down to pricing levels seen in late May,” Wolfley stated.
Midweek trading has shown average prices around $20 per hundredweight for the second half of the year. “We’re back into talking 20-ish dollar milk on average for the second half,” Wolfley noted.
Several factors contribute to the current market uncertainty, including milk availability, potential weather impacts, and cattle availability. “Milk availability is not quite as long as it was a year ago, with production down nine-tenths of a percent in May. People are concerned about what happens if we have a really hot summer or if cattle availability remains tight and we’re not able to grow supply as much as the market is looking for,” Wolfley explained.
Domestic demand has remained strong, aided by promotional activities, but questions about export demand persist. “Demand here in the domestic market has been pretty good, with promotional activity helping to move more products into consumer hands. However, there is uncertainty around export demand in the second half, particularly at these $1.90 to $2.00-ish futures prices,” Wolfley said.
As the market navigates these challenges, stakeholders continue to monitor trends closely to inform their strategies.
