MILK
Even with adverse weather that took place over a substantial swath of the country, Dairy Market News reports that milk production is rising overall. Milk dumping has been taking place in the south-central part of the country as well as the Pacific Northwest. Milk supply is plentiful with processing plants running at or near capacity. Some have taken on extra milk from those areas where plants were shut down for a few days. Some plants will be scheduling maintenance time before spring flush begins to gear up. Demand is expected to surge once those areas hit by winter storms thaw out and retail demand increases as consumers will restock. There will be an ebb and flow until everything settles out again. Class III futures closed lower for the holiday-shortened week due to pressure on cheese prices. Class IV, on the other hand, fared better, closing steady to higher.
AVERAGE CLASS III PRICES
| 3 Month: | $16.21 |
| 6 Month: | $16.83 |
| 9 Month: | $17.14 |
| 12 Month: | $17.18 |
CHEESE
For the week, block cheese declined 2 cents with seven loads traded. Barrels declined 7.75 cents with 26 loads traded. Dry whey price increased 0.50 cent with just two loads traded. It certainly has been an interesting week, with some anticipating cheese prices would increase due to the impact of adverse winter weather. However, it did not seem to have an impact on the overall market. Cheese demand is reported to be strong as increased demand is coming from the foodservice industry. However, that will be an ongoing issue throughout the rest of the year as restrictions on gatherings are slowly lifted. The restaurant industry will eventually rebound as much as it can after the impact of COVID-19.
BUTTER
Butter ended a very positive week with price gaining 15.50 cents with nine loads traded. Price was able to move above cheese where it has not been for a long period of time. One element that might be pushing butter price is that butter produced in 2020, termed "old crop" butter, cannot be sold on the daily spot market beginning March 1. Only butter made this year will be able to be traded. Most years, this causes a bump in price until that event is behind. A large amount of butter is still in inventory and can be moved to fill demand but just not traded on the daily spot market. This should not have any long-term impact on the market. Grade A nonfat dry milk declined 2 cents this week with 17 loads traded.
OUTSIDE MARKETS SUMMARY
March corn declined 7.50 cents, closing at $5.4275. March soybeans gained 2.25 cents, ending at $13.7725, with March soybean meal down $1.60 per ton, closing at $424.30. March wheat fell 11.75 cents, ending at $6.5075. February live cattle gained $0.80, closing at $115.92. March crude oil fell $1.28, closing at $59.24 per barrel. The Dow gained 1 point, ending at 31,494, while the NASDAQ gained 9 points, ending at 13,874.
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