MILK
USDA released the February Federal Order class prices Wednesday. The Class II price was $14, down $0.18 from January and down $2.84 from February 2020. The Class III price was $15.75, down $0.29 from January and down $1.25 from a year earlier. The Class IV price was $13.19, down $0.56 from January and down $3.01 from February 2020. Traders had underestimated the Class III price by $0.10, while they overestimated the Class IV price by $0.09. The year so far has not started out with great prices, but current futures are showing greater potential with May through November Class III futures now above $18. Although far from exceptional prices, they are showing quite a bit of improvement over what they had been a month ago. Milk production is improving along seasonal lines with spring flush drawing near for some areas of the country. Some areas of the Southeast report that milk demand is outweighing supply due to the lack of haulers and/or trucks available to haul the milk needed to supply the needs of some areas. That is expected to settle out and move back to normal in a week or so.
Average Class III Prices
| 3 Month: | $17.50 |
| 6 Month: | $17.85 |
| 9 Month: | $17.98 |
| 12 Month: | $17.84 |
CHEESE
Cheese plants are able to keep up with milk production at the present time. Increasing milk receipts are expected as the weeks unfold and the weather turns more spring-like. Cheese buyers are active but remain somewhat cautious due to increasing cheese supplies. Demand is improving from the foodservice industry but may slow a bit at the retail level if people begin to eat out more often again. However, many people have gotten more accustomed to eating at home and may not change very quickly. Either way, demand should remain strong.
BUTTER
Butter prices slipped back a bit Wednesday, but that certainly does not mean the top is in. Butter export interest is termed as steady, making the recent large increase of price somewhat suspect and potentially the effect of old-crop/new-crop butter restrictions on the daily CME spot market. That may now be worked through the system with volatility to settle back down again.
OUTSIDE MARKETS SUMMARY
March corn fell 10.50 cents, closing at $5.5025. March soybeans declined 3.25 cents, ending at $14.1075, with March soybean meal down $3.10 per ton, closing at $420.20. March wheat fell 11.25 cents, ending at $6.52. April live cattle slipped $0.02, closing at $119.40. April crude oil jumped $1.53, closing at $61.28 per barrel. The Dow declined 121 points, closing at 31,270, while the NASDAQ fell 361 points, closing at 12,998.
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