MILK
There was not very much movement of milk futures Tuesday in either Class III or IV contracts. There were a few double-digit gains, but otherwise, it was a non-eventful day. The divergence of cheese prices provided little market direction as did the weakness of butter. However, futures continue to hold well. USDA released the World Agricultural Supply and Demand report, which surprisingly showed the reduction of milk production this year by 100 million pounds. USDA is now estimating milk production this year to reach 227.3 billion pounds. Production for 2020 was raised 100 million pounds to 223.2 billion pounds as an adjustment was made to monthly milk production throughout all of 2020 on the last milk production report. As expected, milk price averages were raised from the previous month. Class III was raised $0.15 to an average of $16.75. Class IV was raised $0.75 to an average of $14.45. The all-milk price was raised $0.60 from the February estimate to $17.75 for this year. Both the Class III and the all-milk price would be lower than last year, while the Class IV average price would be higher. The Class III average price last year at $18.16, the Class IV price was $13.49, and the all-milk price was $18.32. The report for grain was benign, leaving end stocks unchanged from the February report. It also showed a slight rise of world ending stocks for corn and soybeans.
AVERAGE CLASS III PRICES
| 3 Month: | $17.56 |
| 6 Month: | $17.93 |
| 9 Month: | $18.07 |
| 12 Month: | $17.94 |
CHEESE
Cheese is showing an interesting scenario. Production is increasing with demand increasing as a result of government programs. The stimulus bill will provide more money for food programs. The 15% increase of funding for the Supplemental Nutrition Program has been extended through September, and more money will be available for administration to make sure the distribution of food will be done without difficulties. The Food Box program at this point will be finished once the month of April concludes. USDA left their estimate for the cheese price unchanged from February at $1.6950. Dry whey was raised 2 cents to an average of $0.50 per pound. Last year, the average cheese price was $1.9236 and dry whey was $0.3621.
BUTTER
Even though spot butter declined a bit Tuesday, butter futures were mostly steady to higher. Demand has increased, and buyers have been aggressive. That may not change anytime soon unless price will move to a level at which buyers and sellers are comfortable doing business. USDA estimates butter to average $1.6150 this year compared to $1.58 last year. The estimated price is $0.16 higher than the February estimate. The average nonfat dry milk price is $1.14, which is 1.50 cents above the February estimate.
OUTSIDE MARKETS SUMMARY
March corn declined 3 cents, closing at $5.62. March soybeans gained 3.50 cents, closing at $14.4125, with March soybean meal up $0.90 per ton, closing at $419.20. March wheat jumped 10 cents, ending at $6.5650. April live cattle gained $0.30. April crude oil fell $1.08, ending at $64.01 per barrel. The Dow gained 30 points, closing at 31,833, while the NASDAQ jumped 465 points, closing at 13,074.
.jpg)
