The CME offers five different milk-related contracts. There are two on different types of milk, two on butter, one on dry whey futures and one on a non fat dry milk contract. The most popular contract is the Class III milk futures contract.
Class III milk is used mostly in the manufacturing of cheddar cheese. As such, all factors affecting both milk production and cheese demand affect the prices of class III milk futures.
Key reports and figures from the U.S. Department of Agriculture can be found at: www.usda.mannlib.cornell.edu. Highlights include:
Dairy prices, reported each Friday at 7:30 a.m. (CST). These prices are used in the formula that is used to calculate the Class III milk index price.
“Dairy Products,” is the monthly production report for manufactured dairy products. It contains historical production data and is used to identify broad production trends. It’s released around the fourth day of every month.
“Milk Production,” is released on or before the 17th of each month. It reports on the production of the 20 states that produce 85% of the nation’s milk. The report includes the number of dairy cows in the 23 states, the output per cow and total production.
World Agricultural Supply & Demand Estimates (Wasde) are released between the 10th and 12th of each month. These reports provide government forecasts of fiscal year crop harvests and milk supply and demand.
The “Cold Storage Report.”