May 2016 Dairy Market Report Now Available

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Increased production per cow and expectations for additional milk production growth is dampening the outlook for milk prices for theremainder of 2016. Spot market prices for Cheddar cheese are under pressurefrom rising inventories, and this will soon bereflected in the USDA/AMS dairy product pricesurvey and in Federal Order Class III prices.Nonfat dry milk and dry whey prices remain in line with world market-driven, depressed levels, although butter prices continueto hold at around $2 a pound.These anticipated low milk prices and therecentrally in grain prices during the spring planting and growing season havecombined to push projections forthe dairy-income-over-feed-cost margin to its lowest levels since 2013.USDA’s NMPF decision tool forthe Margin Protection Program (MPP) now indicates that the MPP margin may fall below $6.00 per hundredweight for the May-June period.

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