Despite a lower butter price than a year ago, historically, this is a very strong butter price for this time of the year. It has helped to attract some of the increased milk production to butter powder during May, which helps to hold cheese prices. Much of the expanded milk production is coming from the West, particularly California. Without question cheese sales are very good. This difference must be explained by excellent cheese sales.
Last year is recent memory when cheese prices hit record highs.
Both may be true. It is true that milk production, although higher than a year ago, will decline seasonally. Further, butterfat and protein composition of milk will decline during the summer reducing cheese yields per 100 pounds of milk. But despite all of this, these cheese prices appear strong in light of supply and demand conditions. B utter prices will strengthen further as we move into summer and fall.