MILK
Milk plants are receiving a steady supply of milk, which is keeping most running at full capacity. There have been a few reports of some challenges for milk haulers, as either they have a longer wait time before they can unload and/or reduce availability of trucks. Weather has been good for cows, keeping milk production steadily improving. Milk futures declined substantially over the past two days due to the decline of cheese prices. Now, it seems difficult for sellers to find buyers on the spot market. Increased pressure Wednesday likely came from a news report from Reuters that the Biden administration is canceling the Farmers to Families Food Box program. The fifth round of this program was set to expire at the end of this month, and it was unclear if this program would be extended. Secretary of Agriculture Tom Vilsack said they are not going to continue or replace the program. The focus will be on different initiatives that currently exist under government food distribution programs. The Food Box program provided quite a bit of support for the dairy industry over the past year, and the elimination of this program is likely to have a significant impact on dairy demand. However, some of this will be offset by increasing demand from the foodservice industry and some may be offset by the potential to expand already-exiting government food programs.
AVERAGE CLASS III PRICES
| 3 Month: | $18.42 |
| 6 Month: | $18.54 |
| 9 Month: | $18.43 |
| 12 Month: | $18.24 |
CHEESE
Manufacturing schedules have been increasing at many production facilities, as there is more milk to process and more demand to fill. There are reports that some plants are running behind on filling current orders. It will be interesting to see how the supply/demand balance will fare over the next few months as higher milk production will be available to the market. Block cheese developed a price void under the market with price declining 10 cents over the past two days with no buyers showing any interest in purchasing. This is not a good sign.
BUTTER
Butter has come under some selling pressure, but not nearly as much as cheese. The market is in a different posture and should remain stronger. Price is competitive on the world market, keeping exports strong. The overall butter market is firm as demand is good both domestically and internationally.
OUTSIDE MARKETS SUMMARY
May corn jumped 14 cents, closing at $5.94. May soybeans jumped 20.50 cents, closing at $14.10, with May soybean meal up $3.20 per ton, closing at $398.20. May wheat jumped 18.25 cents, ending at $6.48. April live cattle slipped $0.30, closing at $122.10. May crude oil jumped $2.97, closing at $63.15 per barrel. The Dow increased 54 points, closing at 33,731, while the NASDAQ fell 138 points, ending at 13,858.
