At my house, just off the crest
of the valley top with fields to the west, there’s typically a point in
mid-October when it seems like something in the wind shifts, issuing
in the change of season. This year, the dairy markets seemed to experience
a similar drafty shift. For months, dairy prices strengthened
from milk and product supply constraints caused by declining milk
flows, summer heat, and continued spread of HPAI (avian influenza).
Not to mention, the notable concern: will we have enough milk to fill
these new plants coming online? But those concerns, while all valid,
seemed to ease following USDA’s October Milk Production report. After
13 consecutive months of declining milk flows and persistent headwinds,
USDA reported gains in August and September. This is a good
reminder to never bet against the American dairy producer’s ability to
make milk – especially in a strong margin environment.