MILK
Milk futures weakened somewhat Wednesday, and rightly so. Block cheese and dry whey prices slipped. Not only that, but milk production increased in March about as expected. USDA reported milk production in the top 24 states increased 2.0% from March 2020, totaling 18.84 billion pounds. Production per cow averaged 2,104 pounds or 19 pounds more than the same month last year. Cow numbers totaled 8.95 million head. This was 7,000 head more than February and 93,000 more than March 2020. Milk output for the U.S. was 1.8% above March 2020, totaling 19.75 billion pounds. Milk production per cow reached 2,086 pounds, up 20 pounds per cow. Cow numbers totaled 9.468 million head, up 8,000 head from February and up 77,000 head from a year ago. The increase in milk production was expected, but the increase of cow numbers was quite a bit more than anticipated. First-quarter milk production increased 1.0% compared to the same period last year. Ten of the top 24 states showed production declines. Florida declined 7.3%, Vermont declined 4.3%, Arizona declined 3.1%, Utah declined 2.6%, Virginia declined 2.2%, Georgia declined 1.8%, Pennsylvania declined 1.5%, Washington declined 1.2%, New Mexico declined 1.1% and Oregon was down 0.9%. South Dakota showed the greatest percentage gain with an increase of 13.4% followed by Indiana, gaining 10.0%. The May Federal Order Class I price was announced at $17.10, up $1.59 from April.
AVERAGE CLASS III PRICES
| 3 Month: | $18.68 |
| 6 Month: | $18.92 |
| 9 Month: | $18.80 |
| 12 Month: | $18.57 |
CHEESE
Manufacturers are full of milk with some plants that have not implemented production restrictions urging their patrons to cut back on production or at least limit gains. Spot milk is running around $5 below class, primarily in the Midwest. Cheese demand is strong with buyers aggressively looking for supplies at times. The overall market is uncertain, which may move prices into a sideways range for a while.
BUTTER
There is some tightening of cream supplies, but for the most part, plants indicate there is steady supply of milk and cream to keep churns busy. Butter sales to the foodservice sector are improving while retail sales are showing some weakness. USDA will release the March Cold Storage report Thursday. It will be interesting to see how much inventory has increased or if the increase in restaurant demand has minimized the increase of stocks.
OUTSIDE MARKETS SUMMARY
May corn jumped 19 cents, closing at $6.2550. May soybeans jumped 25.25 cents, closing at $14.9725, with May soybean meal up $1.90, closing at $412.30 per ton. May wheat jumped 13.50 cents, closing at $6.3725. April live cattle declined $0.80, ending at $119.75. June crude oil fell $1.32 per barrel, closing at $61.35. The Dow gained 316 points, ending at 34,137, while the NASDAQ gained 160 points, ending at 13,947.
