MILK
Both Class III and Class IV futures were lower with Class III affected by weakness of cheese while Class IV because of a concern the market may have reached a top. The anticipation of the milk production report likely had some influence as well. November milk production showed a decrease of production of just 0.1% in the top 24 states. There was some anticipation that the decline would be more substantial. It might have been, other than the fact that USDA revised October milk production up 110 million pounds, or 0.6%. So, instead of October production being down 0.3%, it was actually up 0.4%. That is a huge revision. This put October milk production higher than September, which changes the outlook somewhat. Instead of milk per cow being lower in October than the year before, milk per cow was actually higher by 7 pounds per cow rather than the reported decline of 6 pounds. Cow numbers in November declined 8,000 head from October. U.S. milk production was down 0.4%. This also had a huge revision. It had been reported that production in October was down 0.5%, but with the revision, it was actually up 0.1%. Milk production per cow showed an increase of 3 pounds with cow numbers down 10,000 head. The nation's dairy herd is now 47,000 head less than a year ago. Cow numbers continue to decline, but milk production per cow is holding well and making up for some of the loss.
AVERAGE CLASS III PRICES
| 3 Month: | $19.00 |
| 6 Month: | $19.29 |
| 9 Month: | $19.47 |
| 12 Month: | $19.52 |
CHEESE
Holiday cheese demand has been filled, and now it is up to consumers to purchase and consume what is on the store shelves. Buyers have been purchasing some cheese ahead for the first quarter of next year but may hold off on purchasing much more until after the New Year and outlets assess remaining inventory before reordering again. Cheese production will increase over the next two weeks as school milk will be diverted to manufacturing. This will be welcomed by manufacturers that desire to increase production and rebuild stocks.
BUTTER
Butter production will be increasing soon as more cream will be available for churning. However, strong demand will continue to support price through the end of the year. There is little evidence of demand slowing at this point.
OUTSIDE MARKETS SUMMARY
March corn declined 2.25 cents, closing at $5.91. January soybeans jumped 7 cents, ending at $12.9225, with January soybean meal up $6.70 per ton, closing at $386.20. March wheat gained 2.75 cents, ending at $7.7775. December live cattle slipped $0.27, closing at $134.47. January crude oil fell $2.63, ending at $68.23 per barrel. The Dow fell 433 points, closing at 34,932, while the NASDAQ declined 189 points, ending at 14,981 points.
