Tuesday Closing Dairy Market Update - Lab-grown Dairy Products Banned in Mississippi

GENERAL OVERVIEW:

Class III futures were mostly higher while Class IV futures posted double-digit losses in all traded contracts. Mississippi made the first move to ban the manufacture and sale of lab-grown dairy products. The February income over feed prices is $8.46.

MILK:

The state of Mississippi was the first to step out and prohibit the manufacture and sale of lab-grown dairy products. The proposed legislation would classify lab-grown dairy separately from conventional dairy products and make it illegal to manufacture, market or sell the products in the state. Previously, Mississippi banned lab-grown meat along with Florida and Alabama. This is a controversial subject and one that will be a topic of many discussions. The February soybean meal price was the final price needed to calculate income over feed for the Dairy Margin Coverage program. The average price was $312.38 per ton, up $13.13 from January. This puts the income over feed at $8.46. Class III futures were mostly higher, riding on the strength of cheese prices. Class IV futures posted double-digit losses in those contracts that were traded.

AVERAGE CLASS III PRICES:

3 Month:	$15.24
6 Month:	$15.82
9 Month:	$16.37
12 Month:	$16.67

CHEESE:

The bounce in cheese prices provided the confidence for traders to support milk futures. However, the upside price potential may be limited as the spring flush increases the milk supply for manufacturing.

BUTTER:

The decline of the butter price was surprising, as demand is good and buyers are readily purchasing what is being offered in the spot market. The difference is that sellers are aggressively moving butter even at lower prices. As long as sufficient butter is available to the market, buyers see little reason to be aggressive. Cream supplies are lower due to an increase in ice cream production, but that may not be sufficient to tighten supply.

OUTSIDE MARKETS SUMMARY:

May corn closed up 2.00 cents per bushel at $4.5775, May soybeans closed up 11.25 cents at $11.7100, and May soybean meal closed up $1.50 per ton at $316.40. May Chicago wheat closed up 9.25 cents at $6.1625. June live cattle closed up $3.08 at $243.28. May crude oil is down $1.27 per barrel at $101.61. The Dow Jones Industrial Average is up 1,125 points at 46,342, with the NASDAQ up 796 points at 21,591.

Tuesday Midday Dairy Market Summary - Spot Butter Price Falls

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	14 Higher
SOYBEAN MEAL:	$1.80 Higher
LIVE CATTLE:	$2.55 Higher
DOW JONES:	832 Points Higher
NASDAQ:	662 Points Higher
CRUDE OIL:	$0.85 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 1.75 cents to close at $1.6150 with no loads traded. The barrel cheese price increased 2.75 cents, closing at $1.5925 with no loads traded. No sellers showed up during spot trading. The dry whey price remained steady at 69.00 cents with no loads traded. Class III futures are 8 cents lower to 19 cents higher. The butter price decreased 5.00, closing at $1.7750 with 20 loads traded. This price matches the low from March 23. Grade A nonfat dry milk increased a penny, regaining the recent loss and moving to a new high. Class IV futures are 15 to 27 cents lower. Butter futures are 1.22 to 4.50 cents lower. Dry whey futures are steady to 0.22 cent lower. Cheese futures are 0.20 to 1.20 cents higher. The average soybean meal price for February was $312.38 per ton. This was an increase of $13.13 per ton. The income of feed price was $8.48, resulting in a $1.04 per cst payment under the Dairy Margin Coverage program.

Tuesday Morning Dairy Market Update - Limited Overnight Volatility

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	1 to 2 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	1 to 3 Higher

MILK:

The weakness of milk futures on Monday may have been indicative of what could take place this week. Futures adjusted to the underlying cash, with minor strength in block cheese and nonfat dry milk having no influence on price support. Milk production is improving seasonally as the spring flush gears up. This is not expected to overwhelm the market, but will keep sufficient milk available for demand. The potential for higher milk prices as the year progresses will keep farmers pushing milk production to take advantage of the higher prices. The demand for beef-on-dairy calves continues to increase, adding a sufficient income to the bottom line of the operations. Tuesday is the last day to trade March dairy futures and options.

CHEESE:

The block cheese price has decreased to the uptrend line and will need to regain the recent loss, or the price could move into a sideways pattern. The latter is likely as cheese production increases due to increasing milk receipts at the plant level.

BUTTER:

The butter price may continue to chop sideways with buyers and sellers content to take care of business at the current level. Easter demand has been filled and regular demand will need to increase to renew an uptrend in the price. Manufacturers continue to offer supplies to the spot market, satisfying buyer demand.