Is There Really Too Much Milk?

Milk futures have taken a beating over the past month with prices experiencing very few days of higher closes. Technically, futures should be about ready to rebound in price retracing some of the losses experienced during that period of time.The bottom line is that there is just too much milk and product out there to warrant much higher prices. Yes, prices could increase to some extent and hopefully we will experience Class III futures back to $17.00 again before the end of the year, but there is significant lost ground to regain. Summer weather is now basically behind us and with it any impact from sustained hot weather. The next item on the horizon is holiday and end of the year demand. That certainly can reduce inventory and available fresh supply, but we much remember that milk continues to be produced every day and demand must exceed supply in order to reduce inventory. If the current trend remains intact, we will end this year with higher levels of cheese in inventory than last year. This would make it the fourth consecutive year of higher inventory at the end of the year for total cheese and the fifth consecutive year for American cheese.