MILK
Class III futures fell back from the highs after cheese prices declined but were able to reject the lows bounced back a bit into the close. Prices just are not responding as anticipated since late last year after the government announced increased funding for the Supplemental Nutrition Assistance Program as well as the fifth round of the Farmers to Families Food Box program. Underlying market fundamentals are much different than they were last year, making a similar correlation difficult to make. Milk production is substantially higher with more product available to the cash market. A few processing facilities were shut down for a short period of time due to adverse weather requiring some diversion of milk. However, for the most part, plants are operational, but on varying schedules due to delays of receiving milk at times. Processors are working through this with minimal loss of product. Some states in the Southeast indicate supply and demand is balanced at the present time.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.42 |
| 6 Month: | $17.04 |
| 9 Month: | $17.31 |
| 12 Month: | $17.32 |
CHEESE
Block cheese price moved below the previous low, moving price back to the lowest level since May 12, 2020. This may move price into the next lower trading range, as this could bring increased selling activity to the market Thursday. Low prices should cure low prices, and hopefully, demand will improve soon. Spot dry whey price moved up Wednesday to 55 cents per pound, which is the highest price it has been since Oct. 19, 2018. This is providing some support to Class III prices.
BUTTER
Price has been showing some exceptional strength over the past week. There is no indication of a potential tightening market. However, the world butter price is currently at $2.33, while the U.S. price is $1.4950. This is improving international demand, which should help to keep inventory from growing too rapidly. Cream supply remains plentiful, keeping production strong and more than adequate to meet domestic and international demand.
OUTSIDE MARKETS SUMMARY
March corn gained 0.75 cent, ending at $5.53. March soybeans slipped a penny to $13.8375 with March soybean meal up $3.30 per ton, closing at $431.70. March wheat fell 13.50 cents, ending at $6.44. February live cattle lost $0.85, ending at $115.30. March crude oil jumped $1.09 per barrel, closing at $61.14. The Dow gained 90 points, closing at 31,613, while the NASDAQ declined 82 points, ending at 13,965.
