MILK
Mild winter weather has been good for maintaining cow comfort, resulting in steady-to-higher milk production. Spot milk is moving in the Midwest, ranging from $4-$8.50 under class. This is an exceptional discount and one that we might normally see during spring flush rather than at this time of year. This makes one wonder what we might experience during spring flush if current fundamentals and market direction persist. Milk components are slowly improving in many areas. Balancing plants in the East are running at capacity as milk is moved to areas where it is needed or have capacity for bottling or manufacturing. February Class III futures closed within 1 cent of the close on Dec. 21, eliminating all the gain that was realized since that day. One would hope price may find a bottom here, but that remains to be seen. President Joe Biden signed an executive order to increase the Supplemental Nutrition Assistant Program by 15%. This will still need to move through the proper channels to be finalized and implemented. It is unclear just how much added demand this would generate for dairy.
Average Class III Prices
| 3 Month: | $16.72 |
| 6 Month: | $17.12 |
| 9 Month: | $17.33 |
| 12 Month: | $17.38 |
CHEESE
Cheese prices took a hit this week. Blocks fell 22 cents with 13 loads traded. Barrels fell 18 cents with 28 loads traded. Dry whey price gained a penny with just two loads traded. Block price is at the lowest level since Dec. 24 with barrels, reaching the lowest level Thursday since Aug. 24. Prices are at risk of falling lower as cheese production continues to improve. The outlook for increasing milk receipts may keep cheese buyers less aggressive. There are reports of a few milk plants reducing or eliminating volume premiums to their patrons as plants are filling and they are having difficulty moving extra milk.
BUTTER
Price had a nice bump during the week, but that is not expected to change the current market direction. Churning is active due to readily available supplies of cream. Plants are having a difficult time finding other buyers for cream and are in turn churning more heavily. The result is more supply than demand. Most buyers are purchasing on an as-needed basis. For the week, butter increased 11.50 cents with eight loads traded. Grade A nonfat dry milk price declined 2.75 cents with 33 loads traded.
OUTSIDE MARKETS SUMMARY
March corn fell 23.75 cents, closing at $5.0050. March soybeans plummeted 58.50 cents, closing at $13.1175, with March soybean meal down $16.60 per ton, closing at $421.60. March wheat fell 26.25 cents, closing at $6.3450. February live cattle jumped $2.62, ending at $116.72. March crude oil declined $0.86, closing at $52.27 per barrel. The Dow declined 179 points, closing at 30,997, while the NASDAQ closed 12 points higher at 13,543.
