MILK
Milk futures did put in quite a swing Thursday with substantial weakness through the morning. Once spot trading was finished, Class III futures rebounded from the lows still posting losses but trimming those losses. There are two questions that are being asked by many right now. One is just how far cheese prices will weaken before buyers will step back up to the plate more aggressively. The other is about the impact higher grain prices will have on milk production and milk prices as the year progresses. There is no way to predict either one of these right now. Block cheese has only had sellers offer price lower for the past three days without any interest from buyers. Unfilled bids in barrel indicate there may not be much buying interest until 6-8 cents lower. The impact of grain prices may not have much of an impact, as most of the crop has not yet been planted, and it is possible some percentage of feed has already been contracted for a portion of this year. We will not have any idea of production and inventory for several months, so there is much that can happen. Milk production is currently on track to remain higher than last year with increasing milk production per cow.
AVERAGE CLASS III PRICES
| 3 Month: | $18.21 |
| 6 Month: | $18.39 |
| 9 Month: | $18.33 |
| 12 Month: | $18.17 |
CHEESE
There is uncertainty in the market over what cheese purchases for government food programs might look like now that the Food Box program will be discontinued. The market is more unsettled now than it has been for some time. Dairy Market News reports that barrel cheese supplies have tightened, while blocks are more readily available. However, the current weakness is having an impact on both categories of cheese. Cheese production is strong with many plants running at capacity.
BUTTER
Churning is active, but with ice cream manufacturers increasing production, more cream will move toward that area, reducing the amount of cream that will be available for butter production. This may tighten supply and increase cream price, but this is seasonal and nothing out of the ordinary. There will remain sufficient cream for butter production and sufficient butter to meet demand.
OUTSIDE MARKETS SUMMARY
May corn declined 4 cents, ending at $5.90. May soybeans gained 8.25 cents, closing at $14.1825, with May soybean meal up $3.70 per ton, closing at $401.90. May wheat gained 5.75 cents, closing at $6.5375. April live cattle declined $0.50, ending at $121.60. May crude oil gained $0.31, closing at $63.46 per barrel. The Dow gained 305 points, closing at 34,036, while the NASDAQ gained 181 points, closing at 14,039.
