The May 2017 Dairy Market Report produced by the National Milk Producers Federation and sponsored by Dairy Management Inc. shows a rally in cash and futures prices.

The rate of milk production growth began to moderate during the first quarter, but additional milk production continues to generate American cheese at a faster rate than total consumption, driving up inventories and putting pressure on prices. Still, exports of most products showed strong year-over-year growth during the first quarter of 2017. The March all-milk price was $1.60 per hundredweight under January, with the March Margin Protection Program (MPP) margin down $1.75 per hundredweight from last December. However, a mid-May rally in cash and futures prices for butter and Cheddar cheese provided a strong indication that the milk price erosion during the first months of this year may have run its course.