June Cheese Stocks Fall Short of Market Expectations, Prices Adjust

Cheese spot blocks declined by a penny, closing at $1.9300 per pound, while barrels slightly dropped by a half cent to $1.9700 per pound, with only one lot of each being traded. Nonfat dry milk (NDM) also saw a downturn, retracting by a half cent to end at $1.2300 per pound, moving away from the five-month highs reached the previous day.

The USDA's June Cold Storage report presented mixed signals, showing neutral trends for butter but a bullish outlook for cheese. Butter inventories were recorded at 374 million pounds, aligning closely with market expectations and marking a decrease of 6 million pounds from the previous month. Cheese inventories, however, stood at 1.423 billion pounds, falling short of forecasts and showing an 11 million pound reduction from May, closely mirroring the five-year average decline of 12 million pounds.

In related dairy market news, the USDA spot milk report highlighted ongoing tightness in milk supplies. In the Upper Midwest, spot milk prices surged to a midpoint of $0.75 per hundredweight above class, the highest rate for this period since 2014. This marked a significant increase from +$0.25 last week and contrasted sharply with the -$3.50 and -$2.25 seen in 2023 and the five-year average, respectively. This uptrend in milk prices underscores the tightening supply dynamics affecting the dairy market, particularly impacting cheese stock levels and pricing.