Our pre-ADPI outlook and thoughts on 2024 The Milk Check

The 2024 ADPI/ABI Annual Conference starts next week and will likely move the dairy markets. What does Jacoby predict for dairy production and demand for 2024? Join Ted Jacoby III and our guests Jacob Menge, Vice President of Risk Management and Trade Strategy; Joshua White, Vice President of Dairy Ingredients; Diego Carvallo, Director of Dry Dairy Ingredient Trading; Gus Jacoby, President of Fluid Dairy Ingredients and Dairy Support; Joe Maixner, National Sales Manager of Dairy Ingredients; and Ted Jacoby Jr.







We discuss:









Jacoby’s predictions vs. results for 2024 YTD







Factors impacting prices for Q3 and Q4







Continued downward pressure on milk production and lackluster fluid milk demand







The impact of the Avian Flu on dairy production









Plus, is whey the new canary in the coal mine? Find out more on today's episode of The Milk Check.























Ted Jacoby III (T3): Hello, everybody, and welcome to the Milk Check. It's April 22nd, a week before the ADPI meeting in Chicago. And I thought this timing would be right for us to have a market discussion going into an annual conference that does have a tendency to be a bit of a market mover.







Today with me, I have Jacob Menge, our head of trading strategy and risk management, Joshua White, head of our dairy ingredients group, Diego Carvallo, our head trader for non-fat, dry milk and other dairy powders, Gus Jacoby, head of our... President of our fluid division, milk cream, UF milk. Joe Maixner, head of our butter trading, and my dad, of course, joining us to give his thoughts on these markets.







Welcome, everybody, and let's get to it. I was looking at our markets this morning, getting ready for this podcast and I kept asking myself the question, where did we think we'd be this week when we started the first week in January. And I don't think in any of our markets we really were thinking that we'd be dealing with what we're dealing with right now.







So, I think, maybe, what we'll do is we'll start with cheese. Jake, when we were entering the year, if I remember correctly, we were pretty bearish the cheese market, and if we were talking about what we thought the second quarter was going to bring in cheese, I didn't think it was a market that was going to be up 8 cents today and in the seventies, and probably, going higher over the rest of the week.







So, what do you think is going on in cheese, and compare and contrast what we thought would happen at the beginning of the year and what we're seeing right now?







Jacob Menge: I would say cheese has probably been the most in line with our expectations of all our commodities from where we started the year. We were bearish, and I would argue we saw that bearishness, right? I mean, we were in the 140s for a while in both blocks and barrels, and so, I think, yeah, we've seen a pretty good push the past week or two.







But otherwise, I think cheese, more or less, went in line with what we expected. Demand's been off a little bit. We've seen exports numbers are starting to look pretty good, but in general, sluggish has been what it's felt like for most of the year up until the past few weeks.







I'd say cheese kind of went along with what we expected, and it's been this cycle that we've seen for about a year now, right? We get a good push higher. Last year in July, we saw a pretty good push up into, I think, the upper 180s, and then, we seemed to kind of kill demand [inaudible 00:02:57] we've been getting to those levels. And then, we've fallen into the 130s, 140s, low 150s, that generates some more demand, and we yo-yo from there.