In your September 25, 2019 issue . . .

CLASS III FUTURES TRADED NEAR $17.50 for the final three months of the year with an October high of $17.90. For the first eight months of the new year, contracts averaged $16.50 with a $17 high in August.

SPOT CHEDDAR CHEESE REACHED the highest level since November 2014 with blocks trading at $2 per pound and barrels fetching $1.80. Tighter milk supplies in some regions have caused cheesemakers to direct milk into more specialized varieties as opposed to Cheddar.

THE AUGUST CLASS III PRICE REACHED $17.60, while Class IV climbed to $16.74. Within the federal order system, butterfat prices reached $2.66 per pound and protein rose slightly to $2.44 per pound.

FALLING DAIRY COW NUMBERS have been one reason milk prices have rebounded recently. From the peak of 9.438 million cows in January 2018, U.S. dairy cow inventory has declined 128,000 head.

THIS HAS CONTRIBUTED to the three most recent quarters of milk production registering the slowest growth of any quarters from 2014 through the third quarter of 2018. Milk production for the first seven months of this year have been virtually identical to the same months of 2018.

TO THIS POINT, THE INDUSTRY HAS LIQUIDATED just over 53 percent of the additional cows put into production from late 2013 until the peak in January 2018, noted the University of Missouri’s Scott Brown. “It will likely take continued liquidation in the herd to keep prices at or above those registered recently,” predicted Brown.

ON THE WHOLE, DAIRY MARKETS ARE MUCH HEALTHIER than they were in years past. “Supply and demand have come into balance at prices that allow dairy producers to pay bills and slowly chip away at their debt,” said Sarina Sharp with the Daily Dairy Report.

THE SMALLER MILK COW HERD, limited heifer supply, and lower dairy product inventories suggest that milk prices will remain well supported. “But cheap corn and a less vibrant economy argue against a rip-roaring rally,” added the market analyst regarding the future.

DAIRY MARGIN COVERAGE SIGN-UP closed in late September. The first seven months of the program have triggered a payment and guarantee a positive cash-flow decision for farmers who paid enrollment fees.

DAIRY REPLACEMENT NUMBERS fell from 4.2 to 4.1 million over the past year, reported USDA. This 2 percent reduction represented fewer pregnant dairy heifers coming through the collective U.S. dairy pipeline.

IN CANADA, PREGNANT DAIRY HEIFERS climbed 1 percent from 435,600 head to 439,800 over the past year. Collectively, those numbers represent just 10 percent of the inventories of the U.S. dairy herd.