Milk prices are going up following weeks of an oversupply, which led to milk dumping and too many dairy cattle in the system.
Farm Marketing Advisor Bryan Doherty tells us why.
“And so, what happens is when the market turns the market will often find that the sellers have got their trigger points above where the market is to get out of there sold positions or shorts. You’ve got speculators already jumping on the long side. And now when a market moves one direction, you get some additional what I call unintended purchases. So, you get all kinds of volatility in the marketplace, but we’ve seen over the last several months, the producer has been pinched so hard that they’re making moves to become more efficient. And then lastly, you’ve got a strong cattle pricing complex, beef complex, good to move cars in that environment.”
Earlier this summer, dairy producers in the Midwest were forced to dump their milk as processing plants were at full capacity. The oversupply had driven milk prices down and farmers were looking for alternative markets.
