MILK
Milk futures traded higher into spot trading, but then faded as traders seemed a bit disappointed over the fact that cheese prices did not increase as much as was anticipated. Even with the decline, contracts held a good portion of their gains from Friday. There remains optimism that increased government purchases for food programs and the potential for appropriating more money under the new stimulus bill will reduce growing supplies and increase prices. On the other hand, exports may slow somewhat in the near term. The total value of exports for December was $508.5 million, a decline of $15.2 million, or 2.9%, for December 2019. The total amount of exports on a milk solids basis was 162,969 metric tons and a decline of 1.1%. Milk production is expected to remain strong, as there is little reason for farmers to reduce milk production due to strong milk prices. The incentive might be if plants initiate production caps with lower prices paid for milk exceeding those levels. However, that will depend on the duration of time those quotas may be in place.
AVERAGE CLASS III PRICES
| 3 Month: | $16.42 |
| 6 Month: | $16.90 |
| 9 Month: | $17.12 |
| 12 Month: | $17.14 |
CHEESE
Cheese exports showed a second consecutive month of decline compared to the previous year. Exports in December slipped 1%, totaling 25,845 metric tons. Cumulative exports for 2020 showed cheese down 0.1%. Dry whey exports increased 26.9%, totaling 51,406 metric tons with cumulative exports for the year up 23.9% over 2019.
BUTTER
Butter exports in December did very well in increasing 127.6%, totaling 3,754 metric tons. Cumulative butter exports for the year increased 7.0% over 2019. Skim milk/nonfat dry milk exports fell 14.7% to 58,844 metric tons in December with total sales the year 15.9% above the previous year. Whole milk powder sales fell 41% in December with total sales for the year down 1.7%.
OUTSIDE MARKETS SUMMARY
March corn jumped 15.25 cents, closing at $5.6375. March soybeans jumped 21 cents, closing at $13.8775, with March soybean meal up $6.10 per ton, closing at $436.60. March wheat jumped 14.50 cents, closing at $6.5575. February live cattle slipped $0.15, ending at $116.57. March crude oil gained $1.12, closing at $57.97 per barrel. The Dow gained 238 points, ending at 31,386, while the NASDAQ gained 131 points, closing at 13,988.
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