Milk futures continue to make lower highs and lower lows since wholesale milk prices reached a five-year high last September and are now down one-third from this high making the Dairy State farmers feel the economic pinch. Milk futures for September delivery are up .04 cents today currently trading at $16.50 (per CWT) at the Chicago Mercantile Exchange.
The La Crosse Tribune reported wholesale milk prices topping out with a five-year high of $27.10 (CWT) in Minnesota and Wisconsin dairy farmers seeing $26.60 (CWT) for their milk, but since this past March – when the USDA reported milk prices as low as $17.10 and $17.60 (CWT) respectively in those states – milk prices have only come up slightly and are at a premium to the milk futures prices. Even the exports of milk have all but dried-up with economic sanctions in Russia, and glut of milk production in China, and New Zealand becoming a major player in the milk exporting business.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, had this to say regarding the fundamental assessment of the milk futures markets, “Losing one-third the value of your product is a major hit in any industry, but for the dairy farmers its a devastating blow.” Brady adds, “The costs to produce milk such as electricity, veterinarian fees, equipment and land, all take a toll when you’re receiving one-third less for your milk.”
Milk futures trend is down with no bottom yet in sight. What is temporarily bad for the dairy producer is good for the family budget, but for how long will this last…?
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