It’s been a back-and-forth roller coaster in the dairy markets lately.  Mike North of Ever.ag said there are a lot of reasons behind the volatility.

 

"You have a scramble taking place right now as we produce enough cheese to meet all of the Q4 demand, and obviously, that requires milk, so different players in this market on given days are trying to jockey positions to get ahead of the trend, and what got us here, ultimately, was a short supply. We've had fewer cows in the barn for quite some time, with 15 months of negative year-over-year milk production numbers," North said.  "We've been battling bird flu. We're seeing older cows having to try to carry the burden of milk production, which gives us less productivity. And now you throw into the mix, we've sent kids back to school, and we've taken milk back into a bottling program and away from the cheese vats. Couple that with college kids’ addiction to pizza and sending them back to school, and a football season that promotes pizza all the more, and all of this has come together to create this perfect storm.”

 

As it gets closer to the end of the year, North says the volatility is not unusual.

 

“This time of the year, it’s very normal. It feels a bit manic, but this is normal, and it's what leads us often to those September, October, and early November milk highs that we depend on to push forward great opportunities. And so, as I look at this market, it doesn't have this step-by-step perfect rhythm to it. Cheese goes up, milk goes up, cheese goes down, milk goes down. Because right now, everybody's trying to get ahead of that next step of the seasonal curve and still satisfy this big demand that's coming at us really quickly.”

 

Demand for dairy usually takes off at the end of each calendar year.

 

“Which is so key to the dairy complex. This is the magic moment for dairy. Q4 is always the brightest star on the horizon when we talk about dairy demand, and so it's an important time of the year. And so, it's great to see buyers engaged. However, I think as we walk this thing forward a few more weeks, we'll test their resolve,” North added.

 

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