MILK
There are plentiful milk supplies available in the country. Manufacturers and bottlers have no problem being able to keep plants full. There have been some problems reported due to adverse weather hindering hauling and delivery schedules, but this has only been causing delays rather than dumped milk or spoiled product. Most of what is being seen is milk production leveling off recently due to the impact of weather on cow comfort. Class III futures settled mixed, but trading after settlements were posted showed some renewed buying interest surfacing in March and April contracts. Other contracts showed more strength but not to the same extent. There have been no announcements from USDA over any further solicitations or other programs that would impact the dairy industry. It seems that the strength may stem from some sort of rumor or a renewing of some optimism in the market. Underlying cash does not support the late strength. This strength may carry over into the night market if more become concerned that something may warrant higher prices and are unwilling to take a chance and would rather liquidate positions. Class IV futures did not share the same sentiment.
AVERAGE CLASS III PRICES
| 3 Month: | $16.19 |
| 6 Month: | $16.72 |
| 9 Month: | $16.99 |
| 12 Month: | $17.03 |
CHEESE
Retail cheese demand continues to remain strong with some indications that demand is better than last year at the same time. Buyers of cheese are actively rebuilding aging programs at current prices. There is downside price risk, but upside risk may be more problematic if more cheese is utilized in food aid programs. There are plentiful supplies of spot milk available at lower prices than usual for this time of year allowing plant easy access to more milk if they want it.
BUTTER
Butter production continues to remain strong. Cream is being utilized rather than plants trying to sell some cream to reduce production. Inventories continue to build, which may keep a lid on price potential. There has been an increase in export demand recently and is certainly a good sign. Butter price on the latest Global Dairy Trade auction was $2.28 per pound, which makes U.S. butter very attractive.
OUTSIDE MARKETS SUMMARY
March corn fell 21.75 cents, closing at $5.3450. March soybeans plummeted 47.75 cents, ending at $13.54, with March soybean meal down $16.40 per ton. March wheat fell 14 cents, closing at $6.3550. February live cattle fell $1.32, ending at $116.12. March crude oil gained $0.32, ending at $58.68 per barrel. The Dow gained 62 points, closing at 31,438, while the NASDAQ declined 35 points, closing at 13,973.
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