Milk prices continue to look better with each passing week. This is the time of year when buyers become more aggressive. They purchase for previously made contracts and increase inventory for anticipated upcoming demand. Their level of aggressiveness is based on demand and the level of supply. Cheese inventory is below year-earlier levels. This is cause for concern but added to that has been continued year-over-year milk production declines. What is interesting is the demand for barrel cheese. The barrel prices reached their highest price since November 5, 2020.
One year ago, the barrel price was $1.82 compared to $2.4850 on September 13th. The buyers were aggressive with the price gaining 21 cents for the week. The barrel price has had three substantial gains this year that took place over short periods. One was from April to mid-May during which the price increased 67.25 cents. Another was in August during which the price increased by 38.25 cents. The current increase of 38.50 cents happened over the past 2 1/2 weeks. It is uncertain whether the price is nearing a threshold or if it will have further room to run higher. The recent buying interest indicates there is further upside potential. Block cheese has not followed suit but is in no way bearish with the price reaching the highest level since May 24, 2022.
September 17, 2024
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