A Drop In Two Milk Classes, Cattle Futures Fall a Bit, USMCA Updates and Stocks Continue Strong

Today we start with a look at a bit of a drop in Class III and Class IV milk prices, then also talk about a short blip in cattle futures and what packers are doing about it. We take a look at the future of the US Mexico-Canada trade agreement, before we end with an update on Wall Street. 

Transcript

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Hello and welcome to Chap EDC. Here's the top stories from Black Dirt Daily today, which is Friday, July 3rd, 2026. Today we're gonna focus on a drop in milk price classes, a dip in cattle futures, update on the USMCA and a quick look at financial stocks. So let's get to it. While the market for class four milk is still strong, the markets are signaling a retreat is near. The June USDA announcement of class and component prices report indicated the class four milk price falling more than $2 from the month prior, and while the class three price also fell, the gap between the two is closing as the markets search for balance. As previously announced on May 20th, the Milk Marketing Order Advanced Class 1 base price reached $22.18 a hundredweight for June. Not only was the price up $2.03 a hundredweight from the previous month, it was also $4.92 $100 weight above the same advanced class one base price of June from last year and the highest price reported since November 2024. Announced July 1st, the June milk marketing order class three and four veered from the momentum of Class I with both class prices receding from the highs realized in the previous month. June class three price fell 94 cents to $15.98 a hundredweight. It was also $2.84 $100 weight less than the price announced last year. Class 4 prices collapsed $1.36 a hundredweight to $20.96 per hundredweight in June, but remained $2.66 a hundredweight more in the same month last year. Class II is the exception, increasing another two dollars and fifty cents a hundredweight from May and $4.35 per $100 weight above the price reported in June 2025. All prices for components, butterfat, protein, and nonfat, dipped slightly from May to June. Value of butterfat was $1.69 per pound, which is down a cent from the previous month in the smallest price decline of all the components. Price of protein in June settled at $2.46 per pound, which was down from May's $275 per pound. And the price of nonfat solids shrunk to $1.68 per pound, which was $14 off from May. Analysts are forecasting milk prices to wane in the months ahead as the market searches for balance among supply, demand, and global price competition. Thanks to Gen Coin of Progressive Dairy for all of that information. And I encourage you to visit progressivedairy.com for the full report. Switching over to livestock markets, live cattle futures were two-sided early on Friday with feeder futures lower. On drovers.com, Scott Verilec from Kuma Kuma Verilec says the live cattle futures opened slightly higher, but were not able to hold those gains with holiday trade volume. However, the market was also pricing in Wednesday's lower Fed cash trade. Some trade did develop at $255 live with a few $256 after the close, which was down $2 to $3. Dress sales were mostly $403 to $405, down $3-5. However, it was on light volume. With the August futures lower and moving into the dog days of summer, Verelic says the Packers are trying to break the market. He says it wouldn't surprise him if we saw some more $255 kind of trickle as we move on. He says it wouldn't surprise him if we saw some more $255 kind of trickle as we move on. Plus, Packers are using some of their own formula cattle as it is the beginning of a new month. Moving over to trade policy, the U.S. allowed the July 1 deadline for the renewing of the U.S.-Mexico-Canada agreement to pass, which means the 16-year safety net for North American trade is officially off the table. The agreement will remain in force, but by allowing the July 1 U.S.MCA extension deadline to pass, the U.S. has traded long-term predictability for short-term leverage, moving the pact into a rolling cycle of annual reviews until an agreement is reached in writing to extend U.S.MCA or the Pact reaches its endpoint in July 2036. For farm groups, the uncertainty is less about an immediate cliff and more about what happens if negotiations stretch on. Brian Keel, who is the executive director of Farmers for Free Tech Free Trade, told AgWeb that the situation is essentially kicking the can down the road. He thinks there's virtually no chance the U.S. would pull out of the U.S. Mexico-Chan agreement because it's $1.8 trillion worth of trade between the three countries. President Trump says he wants to end USMCA because the U.S. can get a better deal. There are sticking points farm groups would like to see improved upon. For example, American Farm Bureau Federation, which is a part of a broader coalition that supports U.S.MCA, says the agreement still has issues around the edges that could be improved through future negotiations, including faster dispute settlement mechanisms. Wrapping up with a quick look at financial markets, most U.S. stocks were rising Thursday after the latest update on the job market suggested the Federal Reserve may feel less pressure to hike interest rates, but more swings for chip stocks and other winners of the artificial intelligence boom are keeping indexes mixed. S P 500 added 0.3% and is on track to close out its best week in nearly two months ahead of Friday's holiday for Wall Street. Dow Jones industrial average was up 468 points or 0.9%. The Nasdaq composite was 0.2% lower after erasing an early gain. Well, that's all for now. As always, thanks for tuning in. If you found this useful, drop a comment, subscribe, share, and tell all your friends. Sure to check out BlackDirkDaily.com as well for the full stories behind these topics, and don't forget to sign up for the Black Dirk Daily newsletter. I'll be back Monday with more business news across the Megan financial markets. Until then, have a great 4th of July weekend, everybody.