Loading…
Mass closures of restaurants and schools shifted dairy sales abruptly from wholesale food-service channels to retail grocery stores. Dairy processors also struggled to find enough drivers because some workers feared the virus and stopped working.
U.S. dairy farmers began dumping milk.
Lost food-service demand and logistics bottlenecks leave surplus milk with no outlet, pressuring farmgate and Class III milk prices lower.
reuters.comP.J. HuffstutterApr 3, 2020reuters.comP.J. HuffstutterApr 5, 2020After 49 past bearish macro events, Milk (Class III) moved a median -0.6% over 5 sessions (33% higher; middle half -8.5% to +0.6%), and -7.5% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Shift from foodservice to retail and processing and labor disruptions created demand and logistics dislocations that weighed on milk prices.
Restaurant and school closures shifted sales away from wholesale channels, and processor labor shortages and milk dumping signaled a supply-demand imbalance.
