MILK
There has been quite a bit of volatility is the market Monday, but futures have settled down into the close. Initial strength overnight was likely due to the stimulus bill and the potential for more benefit to the dairy industry. However, that ran its course overnight. We do now have a better idea of what is contained in the bill, and there are some benefits to farmers. There is $13 billion earmarked for food assistance, which will help agriculture. There is $13 billion for direct payments, purchases and loans to farmers and ranchers. There is $5 billion for supplemental payments of $20 per acre for row crops and up to $3 billion in direct payments to livestock and dairy farmers that were forced to euthanize livestock and poultry due to slaughterhouse closures. It is difficult to determine how much impact the money earmarked for food assistance will have on dairy demand and whether this will be over and above some of which is already being done. The indication of this will be how aggressive buyers of dairy products will be early next year. Anything will help to provide greater demand and support prices. So far, milk futures have not reacted much since more of what the bill contains has been released.
AVERAGE CLASS III PRICES
| 3 Month: | $15.92 |
| 6 Month: | $16.37 |
| 9 Month: | $16.65 |
| 12 Month: | $16.85 |
CHEESE
Barrel cheese tried to move higher during spot trading, but could not hold price in positive territory. Demand has remained fairly stable, but some slowing of orders has been noted from some retail outlets. This stands to reason at this time of year as many retail outlets will now wait to see how much product will move over the holidays before reordering. Pizza demand remains strong as it seems to be one of the most popular carryout items. It will be interesting to see how much or if the money appropriated for food assistance in the stimulus bill will affect dairy.
BUTTER
Butter output remains strong due to heavy cream supply, and there is no sign of slowing by manufacturers. This, along with reduced food service orders, has made it difficult for plants to reduce inventory into the end of the year. USDA will release the November Cold Storage report Tuesday, which should show a reduction of inventory from October, but may show a growth of stocks from November 2019.
OUTSIDE MARKETS SUMMARY
March corn gained 2.50 cents, closing at $4.40. January soybeans jumped 23.25 cents, closing at $12.4325, with January soybean meal up $6.80 per ton, closing at $412.30. March wheat gained 3 cents, closing at $6.1125. December live cattle gained $0.12, ending at $110.60. February crude oil fell $1.36 per barrel, closing at $47.74. The Dow gained 37 points, closing at 30,216, while the NASDAQ declined 13 points, closing at 12,743.
