MILK
Milk futures have been able to bounce somewhat the past two days. This is likely due to the large losses early in the week as the market generally tends to overdo itself either up or down in a volatile market. The past two days have been mild with limited price fluctuations. Weather in some areas has become more winterlike, but that is not expected to have any significant impact on milk production. Spot milk in the Midwest continues to see lower-than-usual prices for this time of year. Price is running as much as $8.50 below class. Some plants have indicated there are fewer offers of spot milk recently. It is unclear whether this is due to better demand surfacing, requiring plants to process as much milk as possible in order to meet that demand or if there is less being offered due to the low price for the milk. They would rather process it and store it rather than sell it at a steep loss. The increase of cow numbers and production per cow will assure heavy milk production through the rest of winter and spring. Spring flush may see very high output per cow unless milk production is curtailed. Plants may implement quotas to reduce milk volumes, but it may not have a significant impact if it will only be temporary to get through the flush.
AVERAGE CLASS III PRICES
| 3 Month: | $16.12 |
| 6 Month: | $16.55 |
| 9 Month: | $16.84 |
| 12 Month: | $16.94 |
CHEESE
Greater buyer interest developed for barrels Thursday, but price is still declined. That does not improve the near-term market outlook. Sellers are more interested in moving supply rather than holding back hoping for a price increase. Processers are running on full schedules to process available milk. This is expected to meet regular consumer demand as well as demand from government purchases for the Supplemental Nutrition Assistance Program and the Food Box program. So far, extra government programs have not had the price impact as last year.
BUTTER
Price is slowly working lower with a potential to reach back to the low of last April. Price is declining to spur demand. Even with lower price, demand has not increased sufficiently to keep inventory from growing. Retail demand is strong, but the lack of demand from the food service industry continues to plague the market. Weekly butter inventory in selected warehouses for most of the month showed an increase of 23%, which points to continued higher supply.
OUTSIDE MARKETS SUMMARY
March corn gained 0.50 cent, ending at $5.3450. March soybeans fell 21.50 cents, closing at $13.5325, with March soybean meal down $9.50 per ton, closing at $427.10. March wheat lost 11.25 cent, ending at $6.47. February live cattle declined $0.45, ending at $116. March crude oil declined $0.51, closing at $52.34 per barrel. The Dow gained 300 points, closing at 30,603, while the NASDAQ gained 67 points, ending at 13,337.
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