July 9 Weekly Update

7/9 – Class III milk futures, which finished the month of May at $15.47/cwt, plunged in June and closed at $14.20 on Friday. Why? Mostly due to fears that tariffs will not only halt dairy exports to our top customer (Mexico) and ruin margins for dairy producers, but also that trade wars will finally bring the 9-year economic expansion to an abrupt conclusion. CME block cheese has dropped from $1.70/lb on May 9 to $1.5425. Barrel is $1.2450. Cheese stocks are at an all-time high. So far the USDA is projecting block to average $1.63/lb in 2018, roughly unchanged from last year, with 2019 projected at $1.68. CME butter peaked at $2.45/lb on May 22 and has dropped to $2.17. May 31 butter stocks were highest level for that month since 1993. The USDA is projecting butter to average $2.33/lb in 2018, again unchanged from last year, with 2019 projected at $2.28.