MILK
Class III milk futures closed lower in all contracts through September. October and later contracts were steady to slightly higher. February posted the largest loss of 67 cents. However, the contract traded limit down after the November Milk Production report was released. USDA reported milk production in the month of November increased by 3.1% in the top 24 states from November 2019. Production totaled 17.2 billion pounds. Milk production per cow averaged 1,935 pounds and was 41 pounds higher than a year earlier. Cow numbers increased 13,000 head from October and are 82,000 head more than a year ago. U.S. milk production increased by 3.0%, totaling 18.0 billion pounds. Production per cow averaged 1.916 pounds and 43 pounds higher than a year ago. Cow numbers in the country increased 12,000 head more than October totaling 9.41 million. Milk production continues to grow and is expected to continue to do so for the foreseeable future. Of the top 24 states, there were only six states showing production declines. Florida declined 4.3%, Vermont declined 3.3%, Arizona declined 2.1%, Oregon declined 1.4%, Utah was down 0.6% and Washington was down 0.4%. South Dakota showed the largest increase of 13.4% followed by Indiana at 10.9%. Texas gained 9.8%, Colorado increased 7.1%, Kansas increased 6.0% and Illinois was up 5.8%. The rest of the top 24 states showed gains of less than 5.0%.
AVERAGE CLASS III PRICES
| 3 Month: | $15.97 |
| 6 Month: | $16.43 |
| 9 Month: | $16.69 |
| 12 Month: | $16.88 |
CHEESE
Traders were disappointed that cheese prices have not been able to increase. Price has not fallen apart, but the inability of price to break out of the current range took away much of the bullishness of the past two weeks. The few things that fueled the optimism have been eliminated, leaving the market to itself. The market itself did not have any reason to be overly optimistic at the present time. Plentiful milk supply and inventory levels that are beginning to increase do not provide much support in the near term.
BUTTER
There is growing concern over the ability to move cream over the next few weeks due to heavy supply and strong churning schedules. Some switching of production has been made to more bulk production for storage for demand next year. USDA will release the November Cold Storage report on Monday, which is expected to show butter stocks significantly higher than last year.
OUTSIDE MARKETS SUMMARY
March corn gained 5.25 cents, closing at $4.3250. January soybeans jumped 17.50 cents, ending at $12.0122, with January soybean meal up $3.40 per ton, closing at $397.90. March wheat gained 10.25 cents, ending at $6.0875. December live cattle gained $0.57, closing at $109.35. January crude oil gained $0.54, ending at $48.35 per barrel. The Dow gained 149 points, closing at 30,303, while the NASDAQ gained 107 points, closing at 12,765.
