Downes-O’Neill dairy economist Bill Brooks looks for more gains in the cash cheese market in the Martin Luther King Day-holiday shortened week but butter is “anyone’s guess.” Speaking in Tuesday’s broadcast, Brooks said the strong gains In butter, particularly on Friday January 15, may not be sustainable. He said “this is occurring at a time when we are seeing growing butter inventories but butter is a storable commodity that somebody might need and the folks who have it aren’t willing to let go of it unless they achieve a certain price.”
Losses in the cash nonfat dry milk market match losses in price reports from USDA’s Dairy Market News. The pipeline has likely been refilled, according to Brooks, and Southeast Asian countries, especially China is “coming up on a new year’s celebration which will curtail export business activity into that region where a lot of dairy products get shipped to.”
It shouldn’t be a surprise to see some weakness in powder, he said, but he doesn’t expect prices to fall anywhere near support levels any time soon.
Global dairy prices are softening, according to Brooks, though part of that may be tied to currency exchange in converting it to U.S. dollars, but added; “there are a lot of dairy products in storage and a lot is in Europe in governmental hands but still weighs on the market.”