Milk futures contracts rallied, then fell back, following news of the Cooperatives Working Together herd-retirement announcement last week.

The program is poised to send nearly 103,000 cows packing over the next two months.

In response, several Class III contracts saw gains of 50 cents or more following the announcement last Wednesday. However, by Thursday, some of the fanfare diminished, with contracts for the months of June through October falling back 20 cents or more.

As one market analyst put it, there are some “sobering realities” that have market participants watching movement in the futures market very closely.

One of those realities is cow-slaughter numbers. Slaughter levels have slowed in recent weeks. Monday’s Milk Production report, which showed virtually no change in milk output in April, also showed a 3,000-head year-over-year decline in cow numbers and a 2,000-head month-to-month decline. However, the rate at which cow numbers are retracting from month to month has slowed. For instance, the decline between February and March was 5,000 head.

On Monday, milk futures were steady to lower across the board, with some of the front months losing as much as 16 to 17 cents.