June and July data and statistics from the Agriculture Department have painted an increasingly compelling picture of a slow but steady recovery in U.S. dairy markets. At least that’s according to the latest DMI Dairy Market Report. The national average all-milk price rose $0.30 per hundredweight in June, while the July federal order prices showed particular upward buoyancy for Class III, Class IV and even the lagged Class I prices.
In the second quarter of 2016, the size of the national milking herd barely changed from a year earlier, while commercial milk use increased more than twice as fast as milk production. But, as a reminder of the painful dairy situation during the first part of the year, the Margin Protection Program margin reached its lowest bimonthly level since the program’s 2014 start. The $5.76 per hundredweight May–June margin triggered MPP payments at the $6 through $8 coverage levels. Also, exports of cheese, particularly American-type cheese, remained well down from a year ago, contributing to record inventory levels.