Milk:
Front-month February Class III futures posted the largest gain this week with price increasing $2.21 from the close last Friday. Strong buying interest in cheese and the anticipation of higher prices due to the Farmers to Families Food Box program sent milk futures higher. Later contracts increased but did not share quite the same sentiment. Futures moved to a significantly inverted market compared to just a week ago. Farmers are looking ahead to higher prices as is evidenced by some dairy suppliers of various products. Manufacturers of stalls, stall dividers, gates, headlocks, etc. indicate they are having a difficult time keeping up with demand and in many cases are backed up several months with orders. This, as well as demand for other things, will continue for a period of time. The benefit of government money and purchasing of dairy products will not continue indefinitely, but the foreseeable future looks positive. The bearish aspect of the market is that exports are slowing. This was bound to happen as a result of very strong prices last year as it takes time to trickle through the system. The total value of exports for November was $509.7 million, a decline of 5.1% from a year earlier. Exports of dairy products declined 0.2% totaling 162,971 metric tons (mt). It has been quite some time since exports declined from the previous year.
Average Class III Prices:
| 3 Month: | $18.49 |
| 6 Month: | $18.24 |
| 9 Month: | $18.05 |
| 12 Month: | $17.91 |
Cheese:
For the week, blocks increased 26.75 cents with 36 loads traded. Barrels increased 11 cents also with 36 loads traded. Dry whey gained 3.75 cents with 2 loads traded. Cheese exports in November fell 15.8% to a total of 23,941 mt. This was quite the change, but somewhat expected as the impact of high cheese prices during the summer trickled through the market. There is always a delay in reaction due to exports usually being purchased and booked quite a bit in advance. During the high-price period, export demand slowed substantially. Whey remained strong as total dry whey exports reached 48,569 mt, up 26.7% from November 2019. Whey prices did not increase very much during the summer when cheese prices moved higher.
Butter:
For the week, butter declined 4 cents with 14 loads traded. Grade A nonfat dry milk increased 4.75 cents with 27 loads traded. Even though butter prices were tempered more last year, exports in November declined 2.7%, totaling 1,578 metric tons. Whole milk powder totaled 3,802 mt, down 1.4%. Nonfat dry milk/skim milk powder exports fell 7.7%, even though prices remained somewhat steady with a volume of 62,169 mt.
Outside Markets Summary:
March corn gained 2.25 cents, closing at $4.9625. January soybeans jumped 15.25 cents, closing at $13.7575 with January soybean meal up $6.80 per ton, closing at $444.80. March wheat declined 3.50 cents, closing at $6.3875. February live cattle declined 0.50 cents, ending at $114.47. February crude oil jumped $1.41, closing at $52.24 per barrel. The DOW gained 57 points, ending at 31,098 while the NASDAQ gained 135 points, closing at 13,202.
