Milk:
Closer months in Class III futures were very strong as the Farm to Families Food Box program will run from mid-January through the end of April. This will concentrate buying demand in these contracts. Later contracts did not fare well, as for every action there is a reaction and demand may wane later if this program in not extended. May futures declined 13 cents with June down 26 cents. Those contracts had a price swing of over 70 cents as later trading activity turned bearish for these contracts. We are fast moving into an inverted market again after having some premium in later contracts. We have just begun the year and already there is dramatic volatility. Despite the weakness of spot butter, Class IV futures were able to post double-digit gains due to the recent strength of nonfat dry milk.
Average Class III Prices:
| 3 Month: | $18.21 |
| 6 Month: | $18.08 |
| 9 Month: | $17.96 |
| 12 Month: | $17.83 |
Cheese:
USDA released the November Dairy Products report. American cheese production totaled 449 million pounds, down 2.8% from October but 3.9% higher than a year ago. Italian cheese production totaled 457 million, down 2.4% from October, but up 3.1% from November 2019. Swiss cheese production for November was 28 million pounds, a decline of 1.8% from October, but 6.9% higher than a year ago. Total cheese production reached 1.10 billion pounds. Total cheese production was 2.7% lower than October but was 0.6% than a year ago. Dry whey production totaled just 70.6 million pounds, down 5.7% from October and down 5.9% from November 2019.
Butter:
Butter production for November was 168 million pounds, up 1.8% from October but 4.0% higher than a year ago. Nonfat Dry Milk (NDM) production in November was stronger, totaling 152 million pounds. NDM production was 9.3% higher than October and 9.2% higher than a year ago. Skim milk powder production reached 54.4 million pounds, up 6.8% over November 2019.
Outside Markets Summary:
March corn gained 3.25 cents, closing at $4.95. January soybeans jumped 15.25 cents, closing at $13.6525, with January soybean meal up $7.90 per ton, closing at $443.30. March wheat declined 6.50 cents, ending at $6.4750. February live cattle slipped $0.05, settling at $115.00. February crude oil gained $0.70, ending at $50.63 per barrel. The Dow jumped 438 points, closing at 30,829, while the NASDAQ declined 78 points, closing at 12,741.
