Milk futures declined for the week for both Class III and Class IV milk. The second half of the week showed more stability due to underlying cash prices showing limited losses. Volatility during the second half of the week was the least it has been since before Christmas. Cows did not care about volatility and continued to produce milk, as milk receipts at the plant level continued to increase. The December Agricultural Prices report was released Friday. It showed stronger feed prices and a weaker all-milk price. The result was an income-over-feed price of $8.87, a decline of $3 from November. Those who chose the $9.50 level for the Dairy Margin Coverage program will receive a payment of $0.63 per cwt. The average corn price for December was $3.97, up $0.18 from November. The central Illinois soybean meal price was $396.68 per ton, an increase of $8.85 per ton from the previous month. Alfalfa hay price increased $2 per ton to $169 with the supreme/premium quality hay averaging $203 per ton, up $3 from November. This resulted in a blended alfalfa price of $186, up $2.50 per ton from November. The all-milk price was $18.50 compared to $21.30 in November resulting in a decline of $2.80 per cwt. The annual USDA Cattle Inventory report showed 9,440,400 dairy cattle on Jan. 1. This was an increase of 1% from a year earlier. Milk replacement cattle totaled 4,604,500 head, down 2% from the previous year.
AVERAGE CLASS III PRICES
Cheese prices did not move much this week. Blocks declined 3.50 cents with no loads traded. Barrels slipped 0.25 cent with 21 loads traded. Dry whey declined 0.50 cent with seven loads traded. Cheese demand from retail is good. Cheese purchasing by the government is ongoing, but not affecting the market as was hoped. More impact might be felt over time as purchases continue through the end of April for the Food Box program. There is no indication if the Food Box program will continue after that time.
For the week, butter declined 6 cents with 18 loads traded. Grade A nonfat dry milk remained unchanged with 37 loads traded. The high volume of trades was unable to move price, indicating there is sufficient supply with price at a good level for both buyers and sellers. The weakness remains a concern as lower price is needed to increase demand. However, retail demand can only absorb a certain amount.
OUTSIDE MARKETS SUMMARY
March corn jumped 12.50 cents, closing at $5.47. March soybeans jumped $16.75 cents, closing at $13.70, with March soybean meal gaining $3.90 per ton, closing at $431. March wheat jumped 16 cents, ending at $6.63. February live cattle declined $0.95, closing at $115.05. March crude oil slipped $0.14, closing at $52.20 per barrel. The Dow plummeted 621 points, ending at 29,983, while the NASDAQ fell 266 points, closing at 13,071.