Hot or Not?
July was hot enough to crimp milk production and rouse the cheese market to new heights. But, where weather has been cutting into production, long-term effects are less certain. In fact, the June USDA/NASS Milk Production report showed output up 2.4% year-over-year and the national herd expanding for a sixth consecutive month. It can be dangerous to get sucked into an exclusively supply-side view or one that ignores milk production conditions elsewhere in the world, but for now, global demand conditions remain little changed and are not likely to change much over the next six months. We lay out our views on price prospects for the coming months.
What If Grain Prices Move Sharply Higher?
Returns to dairymen have stabilized over the last several months and while current margins are far short of the levels necessary to repair the damage done to balance sheets in 2009, most US producers are covering or are close to covering cash production costs. The benefits of the current environment are not shared equally across all regions, however, just as the damage sustained last year varied from place to place. What happens if grain prices rally and milk prices stagnate or decline?
Developed Verus Developing: The Trial Continues
For the past three years, two ongoing epic trials have been prominent in global economic affairs. At every turn we find factors that contribute evidence for either Developed Economies v Developing Economies or its sister case, Inflation v Deflation. Over the past two weeks, global markets have been captivated and catapulted by corporate earnings reports as well as a sense that values for “materials” have bottomed…reversed, even. We take a look at the evidence building in these cases to see what the copper, crude oil and Baltic Dry Index have to say about global commodity supply and demand.
