LUBBOCK, TEXAS (RFD NEWS) — Milk production is still growing, but the pace is slowing as dairy markets split between ample milkfat supplies and strong protein demand. March milk production increased 2.3 percent on a liquid basis, marking the fourth straight month of year-over-year growth.
Butter has softened as milkfat supplies remain ample. CME butter prices eased over the past month, even as overall milk production gains decelerated.
Skim solids are telling a different story. Nonfat dry milk prices set records through April and into May as new cheese capacity and strong demand for high-protein dairy products competed with dryers for milk. Use of yogurt, cottage cheese, and whey protein concentrate also continued to grow.
Consumer pressure remains a risk. Inflation accelerated in April, sentiment weakened, and softer foodservice volumes weighed on domestic cheese and butter use.
The Class IV rally helped lift the March Dairy Margin Coverage margin to $9.57 per hundredweight.
