May Dairy Market Report

Jamie JohansenAg Group, Dairy, Dairy Management Inc., National Milk

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.