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Cheddar block prices slid to about $1.60/lb in mid-August after trading between $2.50 and $3 from mid-June to mid-July. The July Class III price came in at $24.54/cwt, driven by record protein prices, while negative producer price differentials widened.
Futures pointed to August Class III near $19.50 and a fourth-quarter Class III near $16.60.
Falling cheese prices and forward futures well below July levels indicate lower milk returns ahead, which weighs on dairy herd feed demand and dairy by-product values.
hoards.comCorey GeigerAug 25, 2020Not enough comparable past events yet for a historical read.
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.
It showed cheddar blocks collapsing from $2.50-3 to about $1.60 while futures implied Class III falling toward $16.60 in Q4, signaling that the futures curve still had to converge lower.
