Dairy- Descending prices and a monstrous amount of cheese

Last year started off on a promising note for dairy exports and was projected to possibly set new records. Tariff wars with China and Mexico along with a drop in cheese consumption, however, weighed heavy on prices. Milk sales were down 2.2% over the first 10 months of 2018. As for exports, during the first 10 months, the U.S. exported 16.3% of milk solids, most of which occurred before the tariffs. Experts say there were 30,000 few cows on average during August through October. Looking ahead, the 2019 average all milk price prediction stands at $16.20 per cwt., the lowest price since 2009.When cheese prices drop, so do Class III milk prices. Currently, the U.S. is sitting on a 1.4 billion lb. mountain of cheese. This large inventory is mostly due to the consumer’s appetite shifting away from processed cheeses and towards more natural cheese varieties.Due to the decrease in cheese consumption, stock piles are growing at a faster rate.