Class III milk futures came under substantial pressure after spot trading showed both cheese and butter declining. However, as the market moved to the close, strength slowly came back into the market. This is a good sign, even though cheese and butter prices still weakened. Class III and Class IV milk futures closed quite a bit higher for the week. The January Agricultural Prices report was released Friday, which showed an income-over-feed price of $7.14. This was $1.64 lower than December and the lowest income-over-feed price since May 2020. Those that chose the $9.50 level under the Dairy Margin Coverage (DMC) program will receive a payment of $2.35 per cwt. The average corn price in January increased 27 cents per bushel to $4.24 per bushel. The central Illinois soybean meal price rose $42.56 per ton from December, reaching $439.24 per ton in January. Alfalfa hay prices increased $2 per ton to average $171 per ton, while the premium/supreme alfalfa hay price (dairy-quality hay) within the top five milk-producing states climbed $3 per ton to average $206 per ton. The blended hay price used for the DMC program was $188.50, up $2.50 from December. The all-milk price fell $1 from last month, moving to $17.50 per hundredweight. The all-milk price in January was $2.10 lower than in January of last year.
AVERAGE CLASS III PRICES
For the week, blocks increased 8 cents with 17 loads traded. Barrels gained 0.75 cent with six loads traded. Block price moved back up into the range they traded in during much of November and December. That does not make the market bullish, but it does indicate support seems to be strong under the market. However, the weakness again Friday is cause for concern. Dry whey increased a penny for the week with just two loads traded.
Butter declined 8 cents for the week with 16 loads traded. Grade A nonfat dry milk price gained 4 cents with 27 loads traded. Churns remain active working with large cream supplies. Retail buyers are purchasing ahead for the typical increase in baking for the upcoming spring holiday of Passover/Easter. That is about four weeks away, but demand will spike early as preparation is made for the time period. This may not provide much further price upside movement, but any increase in demand is certainly welcomed.
OUTSIDE MARKETS SUMMARY
March corn gained 0.75 cent, ending at $5.5550. March soybeans declined 0.75 cent, closing at $14.0525, with March soybean meal down $0.90 per ton, closing at $423.20. March wheat plummeted 16.75 cents, ending at $6.55. April live cattle fell $1.67, closing at $1.20. April crude oil fell $2.03 per barrel, ending at $61.50. The Dow fell 470 points, closing at 30,932, while the NASDAQ gained 73 points, closing at 13,192.