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A window has opened for dairy farmers to consider locking in some positive margins based on futures contracts, according to a recent market report from CoBank. Overall, 2024 should go in the books as a top-three milk price year. On the flip side, grain prices have been dropping steadily this summer to reach a five-year low – admittedly not good for crop farmers but an opportunity for livestock producers. In July, the margin above feed costs to produce milk moved to the best level since May 2022 at $12.33 per cwt. Forecasts for the remainder of the year show margins improving to nearly $16 per cwt., based on calculations from the Dairy Margin Coverage (DMC) program.

GB milk deliveries through the milk year to date have contracted in supply terms as a result of the poor weather seen from Autumn last year through to Spring this year. In the milk year to date GB supplies have been back by 0.9%.   July was back by 0.4% and August by 0.5%. This was due to disappointing grass growth and quality going into summer and lack of farmer confidence given continued high input costs and costs of borrowing.  Off the back of this trend the AHDB forecast revision in September expected the 2024/25 season to end at 0.3% down year-on-year.

In the United States, on July 26, 2024, the price of Cheddar cheese reached USD 4,255/tonne and was 3.5% higher than in the previous quotation and 1% higher than in June 2024. Compared to prices a year ago, Cheddar cheese was 1% more expensive.