MRV BLOG: MRV Market Commentary as of May 31, 2022

Check in here to see the MRV commentary on what we have seen and are seeing in the dairy market.  These insights have developed from MRV’s proprietary data, industry experience, and industry reports referenced below. Here’s our latest!

Although fluid milk prices have gone up again, we do see this trend of increasing prices begin to slow and start to decline for July’s cost.

Class 2 prices also rose, with the biggest contributor to June’s increase for the class 2 items are butterfat’s rise in price, once again. However, MRV projects butterfat’s price for May to drop close to March’s levels and slowly decline from there. MRV also projects a similar trend with skim’s price, as we project it will subtly continue to decline, however, not nearly as dramatic as butterfat.

Domestic butter use dropped about 5% from January to March vs 2021’s volumes. This is most notable with commercial users who are looking for any alternatives to help them save. Like butter, soybean and vegetable oil’s prices are significantly higher than what they were, however, compared to butter’s price, they are looking more and more attractive for some users.

A large contributor to all of these high prices, alongside a lower heifer count and all time high feed costs, is overall milk output. Milk output continues to fall short of last year’s numbers, partially due to milk yield being stable as opposed to growing (YoY) and a lower head count compared to last year’s. Milk production continues to fall and has fallen over the last six months making it the longest contraction in milk production since 2001. With milk maintaining a shortfall in production and high prices affecting demand, we are not expecting a large decrease in price in the upcoming months but rather only subtle declines, meaning these high prices may stay for a while longer.

Information here was gleaned from resources including MRV proprietary data , USDA.gov, and information from Daily Dairy Report.
Butterfat ($/lb)

Class IV Skim ($/lb)

This information cited by MRV Marketing, LLC is for informational and reference purposes only. It is not intended to be a conclusive statement of future market conditions. It is not legal advice or legal documents. The data used in these documents contains references to information created and maintained by other organizations or agencies. Please note that MRV Marketing, LLC does not control and cannot guarantee the accuracy of these outside materials.

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