Thursday Closing Dairy Market Update - Report Says Dairy Cattle Slaughter Down

MILK

Milk futures continued their pattern of volatility with prices rebounding from Wednesday's losses. It seemed the markets reacted negatively to news that HPAI was found in milk samples. Today, that did not seem to be the focus with traders moving the market due to it being overdone to the downside relative to cash. Butter and cheese prices also remained steady, providing support to the market. We may need to buckle up as this may indicate a volatile year.

USDA released the March Livestock Slaughter report showing dairy cattle slaughter down from February and substantially lower than March 2023. March dairy cattle slaughter totaled 244,600 head, down 8,100 head from February. Slaughter was down 61,600 head from a year ago. Lower cow numbers and a tighter heifer supply are reducing slaughter.

AVERAGE CLASS III PRICES

3 Month:	$17.33
6 Month:	$18
9 Month:	$18.13
12 Month:	$18.11

CHEESE

Cheese prices remained unchanged, which was viewed as positive by traders. Blocks' early weakness dissipated as buyers turned aggressive to take advantage of the lower price. Spot milk prices are similar to last week with prices ranging from $1 to $3 lower. This is better than a year ago, indicating the milk supply is tighter but not too tight. The cold storage report was bullish on the market but it may take some time before it may provide further support to prices.

BUTTER

Butter price is supported but supply is sufficient to satisfy demand. Churning remains active, keeping supply available for demand as well as building some inventory. Butter is poised to move higher but the price may remain choppy for a period. Butter futures showed quite a bit of strength as traders anticipated stronger prices.

OUTSIDE MARKETS SUMMARY

July corn closed up 3.50 cents per bushel at $4.5200, July soybeans closed down 1.75 cents at $11.7975 and July soybean meal closed down $1.60 per ton at $347.60. July Chicago wheat closed up 7.50 cents at $6.2050. June live cattle closed up $2.55 at $177.80. June crude oil is up $0.76 per barrel at $83.57. The Dow Jones Industrial Average is down 375 points at 38,086 with the NASDAQ down 101 points at 15,612.

Thursday Midday Dairy Market Summary - Butter and Cheese Hold Steady

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	3 Lower
SOYBEAN MEAL:	$3.00 Lower
LIVE CATTLE:	$1.85 Higher
DOW JONES:	454 Points Lower
NASDAQ:	171 Points Lower
CRUDE OIL:	$0.24 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remained unchanged at $1.74 and $1.77, respectively. There was one load traded in blocks and two loads traded in barrels. There were two unfilled bids for blocks and an unfilled bid for a load of barrels with two uncovered offers for barrels remaining at the close. The block price initially declined a penny before a bid raised the price steady with Wednesday's close. This may suggest that the market is currently balanced and that prices are supported. Dry whey price regained 1.25 cents closing at 38.25 cents with four loads traded. Class III futures are 4 cents lower to 34 cents higher. Butter price remained steady at $2.9675 with no loads traded. Grade A nonfat dry milk price gained 1.25 cents closing at $1.1150 with one load traded. Class IV futures have only traded the July contract with a gain of 12 cents. Butter futures are 0.30-6.45 cents higher. Dry whey futures are steady to 1.37 cents higher. USDA will release the March Livestock Slaughter report this afternoon, providing the amount of dairy cattle slaughtered for the month.

Fluid Milk and Cream - Western U.S. Report 17

In California, milk production is steady. Industry participants say seasonal spring flush conditions peaked in early-to-mid April. Handlers note recent week-to-week milk production differences as steady to slightly decreasing. Some handlers convey preliminary records indicate April milk production is trending slightly below anticipated volumes. Spot milk availability is reported as neither tight nor loose. Spot milk load pricing is reported to be near $3-$4 below flat FMMO blend price. Some processors anticipate tighter milk availability starting soon. Class IV demand is stronger. Demands for all other Classes are unchanged. 

Farm level milk output in Arizona is steady. Manufacturers indicate milk volumes are ample for manufacturing needs and Class demands are unchanged. 

In New Mexico, milk production is steady to higher. However, some processors note milk production is down for 2024 year-over-year comparisons. Demands for all Classes are steady. 

Industry participants convey steady milk production in the Pacific Northwest. Handlers anticipate Class II demand from ice cream makers will pick up soon. Class I, III, and IV demands are steady. 

Reported farm level milk output in the mountain states of Idaho, Utah, and Colorado varies from slightly weaker to strengthening. Industry participants say spring flush conditions in Colorado have started. Processors note milk volumes are readily available throughout most of the mountain states. All Class demands are steady to strong. 

Cream availability remains similarly in line with recent weeks. Cream multiples are unchanged this week. Demand for cream and condensed skim milk is stronger. Condensed skim milk is widely available.