MILK
Milk production seems to have stabilized over much of the country, while demand for both Class II and Class III milk is strong. Class II demand is expected to decrease soon as holiday product demand slows. Schools will be closing next week, which will put more milk into Class III production. This will be welcomed by many plants that have been unwilling to purchase milk from the spot market at prices higher than usual for this time of year. Demand has been strong, and it will be interesting if it can remain this strong through the end of the year and into the first quarter of 2022. The milk production report that will be released on Monday may provide a better idea as to whether heavy culling has continued or if farmers are holding back or in some cases adding cows due to the better outlook for milk prices. Some plants are looking for more milk and are aggressively trying to take patrons from other plants rather than relying on purchasing from the spot market. They sense that milk production may not turn the corner anytime soon, and they would rather position themselves for the longer term.
AVERAGE CLASS III PRICES
| 3 Month: | $19.35 |
| 6 Month: | $19.55 |
| 9 Month: | $19.62 |
| 12 Month: | $17.65 |
CHEESE
Reports from the Central region of the country indicate that retail demand is strong. The sense is that this strength may not dimmish anytime soon. Buyers of cheese are cautious and are not willing to purchase product too aggressively, yet they still want to increase ownership to fill orders and make sure they have sufficient supply on hand. The question in the mind of traders is whether demand will continue to remain stronger than usual after the holidays. It is possible demand may slow to some extent, but lower milk production may support the market as it will remain somewhat balanced.
BUTTER
Bulk butter is reported to be somewhat tight as demand has been, and continues to remain, strong. Cream supply has been tight, which has limited the production of butter. That is expected to change soon as supply should begin to be more available in early 2022. This would allow for more butter to be produced to meet demand as well as rebuild inventory.
OUTSIDE MARKETS SUMMARY
March corn gained 5.50 cents, closing at $5.9125. January soybeans jumped 14.75 cents, closing at $12.7725, with January soybean meal gaining $0.10, closing at $372.30 per ton. March wheat jumped 14.50 cents, closing at $7.7050. December live cattle gained $0.27, ending at $135.27. January crude oil gained $1.51, closing at $72.38 per barrel. The Dow declined 30 points, closing at 35,898, while the NASDAQ fell 385, closing at 15,180.
