COVID-19 is impacting the entire economy and marketplace, including the milk market. We’ll be providing weekly updates with milk futures prices and other market updates to help keep you as knowledgeable as possible during this time. View the entire list of weekly updates.
Class III and IV Milk futures began this week where they left off last week, posting decent gains in most months for the next 12 months. As of 4:45 p.m. on Tuesday, May 12, the average Class III price over the next 12 months is up $0.43 per cwt to $15.52 driven by gains in June through December compared to last Friday, May 8. Average Class IV price increased $0.40 per cwt to $13.35 compared to last Friday. Hopefully, these gains will continue through the week.
A bright spot in these dark times are retail sales. Retail sales since COVID-19 restrictions across the country were put into place have increased. Fluid milk sales, which have been in a decades-long decline, were up 15% and 11%, respectively, year over year in March and April. Cheese, butter, and ice cream have also seen tremendous growth versus last year. Retail cheese sales were up an average of 32%, while ice cream was up 20%, and butter was up 55% for March and April. Unfortunately, this has not offset the lost sales to food service outlets that are closed or offering limited service. These significant increases are not expected to last as economies reopen across the country and more people start eating out again. Hopefully, as things return to a new normal, the U.S. dairy industry can achieve an equilibrium where food service dairy sales return to a new normal and retail sales can continue year-over-year growth.