◂ Event Timeline

Dec 4, 2020POLICYUS

Opportunity knocks — will you answer the door?

Class III dairy prices swung $5 per cwt or more month to month in 2020, with COVID-era food box buying lifting prices. Block cheese peaked at $2.78 in early November before falling more than a dollar, and barrels dropped to $1.40 as fresh cheese demand dried up.

WHY IT MATTERS

The end of government cheese buying combined with new cheese capacity points to weaker dairy prices and continued volatility, reducing milk value for dairy-linked feed demand.

AFFECTSMilk (Class III)▼

SOURCE
hoards.comMike NorthDec 4, 2020

Price reaction & history

Milk (Class III)▼bearishSO FAR1d -0.6%5d +2.2%20d -0.2%

After 24 past bearish policy events, Milk (Class III) moved a median -0.1% over 5 sessions (33% higher; middle half -1.8% to +0.5%), and -4.6% over 20.

Feb 8, 2017Back in the pool: DFA seeks flexibility in Northeast federal milk marketing order - | Ag Proud+0.6%
Aug 5, 2020Large Negative PPDs on Milk - AG INFORMATION NETWORK OF THE WEST-21.0%
Nov 25, 2024“By The Middle Of Next Year, Expansions To US Cheese Processing Are Expected To Boost Cheese Output By Nearly 20 Million Pounds Per Day." - EDairy News English-0.1%
Dec 1, 2020News for Dairy Co-ops - December 2020 - NMPF-33.9%
Apr 14, 2023Initiating Federal Order Reform - Cheese Reporter-0.1%

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.

Linked price moves

Milk (Class III)-33.2%5 periods to Dec 8, 2020-4.7σ
Block cheese fell more than $1 from its $2.78 early-November peak and barrels dropped to $1.40 as fresh cheese demand faded, which directly drives Class III lower.
Milk (Class III)-34.4%5 periods to Dec 2, 2020-4.8σ
Block cheese fell more than a dollar from its $2.78 peak and barrels dropped to $1.40 as fresh cheese demand dried up, directly explaining the Class III plunge.
Milk (Class III)-34.7%1 period to Dec 2, 2020-16.1σ
It describes block cheese falling more than $1 from its early-November peak and barrels dropping to $1.40 as fresh cheese demand dried up, which is the cash-price weakness that drags Class III lower; it is dated 12/4, after the move, so it is explanatory context only.