MILK
The basic fundamentals of the market remain unchanged. The heightened market movement has been the result of the stimulus bill. President Donald Trump signed the bill, but the controversy now is whether there will be more money sent to individuals in the form of a stimulus check. This is dominating the market, leaving the rest of the provisions in the bill somewhere in the back. There has been no indication as far as solicitations for food programs or for compensation for donated fluid milk, and we have no idea as to the time frame for any of this to take place. It may just be an ongoing application process without the fanfare that surrounded the Farmers to Families Food Box programs. The government already purchases for food programs on a monthly basis. This may just be added to the purchases increasing demand but distributed over the period of the next year. Of course, anything can take place, but until it does, traders will continue to keep guessing the direction of the market. USDA will announce the December Federal Order class prices Wednesday. The trade anticipates a Class III price of $15.76 and a Class IV price of $13.42. USDA will also release the November Agricultural Prices report Wednesday showing whether there will be any Dairy Margin Coverage program payments.
AVERAGE CLASS III PRICES
| 3 Month: | $17.32 |
| 6 Month: | $17.37 |
| 9 Month: | $17.40 |
| 12 Month: | $17.36 |
CHEESE
Cheese is exhibiting some strength either due to the potential for more demand from government food programs or from the desire of cheese buyers to pick up product at the least-expensive price possible in order to rebuild aging programs. We are moving into the time of year when demand generally slows and inventory begins to build. It will be interesting to see whether milk production will continue to increase at the pace it has been. There are already numerous manufacturers that are running at capacity and may need to divert milk sooner than usual.
BUTTER
Cream supply is large with cream being diverted in order to find manufacturing capacity. This has not allowed plants to reduce production in order to balance demand with supply. Extra product is being put into inventory in hopes that demand from the food service industry will increase as the year progresses. Retail orders have slowed as stores assess product movement through the holidays before placing additional orders.
OUTSIDE MARKETS SUMMARY
March corn jumped 9.50 cents, closing at $4.66. January soybeans jumped 40.25 cents, closing at $12.9550, with January soybean meal up $11.70 per ton, closing at $427. March wheat gained 4.25 cents, ending at $6.1850. February live cattle fell $1.20, closing at $114.57. February crude oil gained $0.38, ending at $48.00 per barrel. The Dow declined 68 points to 30,336 with the NASDAQ declining 49 points, closing at 12,850.
