(click on image to enlarge)
USDA released the "Milk Production" report yesterday. According to NASS, milk production for July 2010,in the 23 lead dairy states was up 3% - wow!
Looking at Dairy Market News report for the third week of July 2010:
The heat wave which hit the Northeast a couple of weeks ago has now left the northern part of the region, resulting in more normal Summer weather. Unusual
heat remains in Pennsylvania and much of the Southeast, where some areas
have experienced temperatures above 90 degrees during about 19 of the last 25
days. In Vermont, the recent heat reduced milk production between 15% and
20% into last week and production has still not fully recovered to normal seasonal
levels. The reduced production has kept milk supplies tight and prompted some
processors to purchase spot market cream to meet contract commitments, at
prices above contract.
Hot, often muggy, summer weather has reduced milk intakes and tightened milk supplies. For both milk and cream, "Got Milk?" is a question asked milk suppliers by customers.
CALIFORNIA milk production is trending lower on a weekly basis due to hot and humid conditions.
Well, it really seems not to matter. Prices on the CME have risen since the "Milk Production" report. And, as can be seen in the above graph the connection between price and production is pretty small.