Conventional experts insist the crash in dairy farm milk price is all about supply and demand. How accurate that claim may be is heavily dependent upon the validity of the data at each stage.
At the first step milk production data is release. This information is not audited. Next the dairy products report is released. This data is not audited. Next the import/export data is considered and again, particularly the export data may not be accurate.
Then, the cold storage data, on a monthly basis is released. This data is not verified or audited.
And of course, imported dairy proteins are not counted.
From all the above, the experts conclude there is a problem with supply demand. Never mind the scanner data points beyond any doubt, to increased consumption.
So, we have a best guess, not a firm fact regarding supply/demand.
All of this justifies the product price, which is nearly perfectly correlated with block Cheddar price on the CME. The NASS survey is a smoke screen and nothing more.
The price of block Cheddar can rise or fall with no cheese traded from the motivations of just one trader. This means the pricing system cannot be regulated.
One thing which is certain the problem lies in the formula which, as long as the government is will to put 100% of the pricing ability in the hands of a few, there will be a continuing strangle hold on dairy farmers milk checks.