Class III milk futures closed strong but were short of reaching back to new highs. Even with all the volatility, February and March futures are lower than a week ago. Optimism returned late Thursday seemingly tied to the potential of another stimulus after President-elect Joe Biden takes office. It will still need to go through Congress and may take a few months, but there is potentially more money will be appropriated for further Food Box programs. The current one that is to begin next week has had limited or no impact on cheese or butter prices as they are lower than when it was announced at the beginning of the year. There will be increased government purchases for regular food programs as a normal part of what is done for those in need. All of this, as well as regular demand, should help to keep inventory from becoming burdensome for cheese. Butter may be a different story. Mild weather has allowed for good cow comfort and increased milk production. There is a wide variation of spot milk prices, particularly in the Midwest, with reports of spot milk prices running as much at $8.50 below class. Some is moving long distances to find manufacturing capacity. Dairy markets will be closed Monday in observance of Martin Luther King Jr. Day. Markets will reopen Monday at 5 p.m. Central Standard Time.
AVERAGE CLASS III PRICES
For the week, blocks declined 8.75 cents with 13 loads traded. Barrels declined 8 cents, also, with 13 loads traded. Dry whey increased 3 cents with four loads traded. This weakness was a bit of a blow to the anticipation of those who thought cheese prices would follow the pattern of last year and move steadily higher during the fifth round of the Food Box program. Prices may move higher, but there is little indication that it will be a steady trend higher. Some buyers have already set aside some cheese stocks in preparation for filling government purchases for food boxes.
For the week, butter fell 9 cents with 23 loads traded. Grade A nonfat dry milk increased a penny with 43 loads traded. Butter production is increasing, according to USDA's Dairy Market News publication. Stocks of butter are increasing more than had been anticipated. Reduced food service demand is the anchor that is having a substantial impact on price as it moves lower to stimulate buying interest.
OUTSIDE MARKETS SUMMARY
March corn declined 2.75 cents, closing at $5.3150. March soybeans fell 13.75 cents, ending at $14.1675, with March soybean meal down $1.70 per ton, ending at $463.20 per ton. March wheat gained 5.50 cents, closing at $6.7550. February live cattle gained $0.70, closing at $112.77. February crude oil fell $1.21, closing at $52.36 per barrel. The Dow declined 177 points, closing at 30,814, while the NASDAQ fell 114 points, closing at 12,999.