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On Cows and Markets

By  E. W. Lang

I'm using some artistic license this week in that I have a small amount of good news that I can express on a Mature Equivalent basis, if you will.   So here it is.

Butter gained 10.4% this week.  American cheese inventories were down 18 million lbs. in June, 4X the normal decrease in storage volume.  Other types of cheese in storage was down 23 million lbs. in the same time, 3.7X the normal draw down.  Only 1.4 million lbs. are in inventory, and that's not very much.  Labour production problems are contributing to this, along with an expanding economy and more cheese going out the door, or so I'm guessing. 

Class III Milk Futures for this and all of next year moved from zero to 40 cents per cwt. down, each month with a decent number of contracts traded.  Class IV for the rest of this year averages $16.16 per cwt., up 13 cents from last week.   How we only got 13 cents per cwt. after butter went up 17 cents per lb. is a great mystery, given that dry product prices held. 

Milk Feed Indices linger at the $7 per cwt. level, on average, from now till March, yet national production continues to increase.  Year over year the top ten states were up 3.1% from a year ago.  California led the way, followed by Wisconsin and Texas.  Texas was up in cow numbers by 5.8 percent, followed by Wisconsin, up 1.4 percent. 

For the week ending June 10, dairy cows slaughtered were up 7.2% from a year ago.  That's a pretty big increase, but we were looking at $20+ milk and $3 corn year ago, so there you go.

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