November 2024 Dairy Producer Market Update

November 2024 Dairy Producer Market Update

 

Key Takeaways:

  • Volatility continues in the dairy markets as butter and cheese prices continue their downward trends. Reports of growing milk production, increased cheese capacity coming online, and holiday demand tapering off have driven the Class III and IV markets lower during the past month. While CME spot dry whey and nonfat dry milk prices are at their highest values since 2022, their small gains are not enough to offset the other losses.

  • Feed costs are significantly lower than a year ago, with USDA estimating a record corn yield and near-record soybean yield. The soybean complex has been under additional pressure in the past month, as increased crush capacity along with an expected shift in US biofuel and trade policies has turned the market even more bearish.

  • Despite the recent declines in the cheese and butter markets, the margin outlook for dairy producers still looks extremely favorable. Milk prices remain historically elevated, and when combined with multi-year lows in feed costs, producers have a strong margin opportunity in front of them. We encourage producers to take advantage of these opportunities to secure profitability in these volatile markets.

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