MILK
The Federal Reserve on Wednesday indicated they are prepared to raise interest rates three times next year. Accelerating and broadening inflation is changing their earlier stance of not raising interest rates until 2023. It is unclear whether this will have an impact on the outlook for dairy prices next year. Either way we look at it, next year will be filled with many challenges. For the time being, milk prices look strong and may continue that way through the end of the year unless supplies begin to build and/or demand slows. There was a news story out Wednesday that indicated the omicron virus is spreading everywhere -- and quickly -- and that it could curtail some of the plans for holiday parties that were missed last year. Maybe some of the extra dairy products that had been ordered may not be completely sold to consumers that end up paring back again. Weather remains warmer than usual during this time of year and really has been good through the fall so far. Next week, we will officially come into winter. Many farmers indicate cows are doing well with milk production as they have good-quality feed in most cases. Higher feed prices have been difficult to swallow and will continue to remain that way possible all of 2022.
AVERAGE CLASS III PRICES
| 3 Month: | $19.39 |
| 6 Month: | $19.53 |
| 9 Month: | $19.54 |
| 12 Month: | $19.60 |
CHEESE
The weakness of barrel cheese Thursday does not suggest the market has reached the top. However, the widening of the spread indicates barrel demand is weaker. The question is whether the weakness of barrelsb will pull blocks down over time. Manufacturing plants will be busy over the holiday period as more milk will be available. This is being welcomed by those who want to increase production and continue to meet demand for fresh supply. Some plants will be actively looking for milk.
BUTTER
The increase of butter Wednesday was not surprising, but it does show that demand remains strong despite much of the orders for the holidays having been filled. The combination of strong domestic and international demand continues to provide support to the market. The strength of nonfat dry milk and the move to multi-year highs is providing strong support to Class IV milk.
OUTSIDE MARKETS SUMMARY
March corn declined 4.50 cents, closing at $5.8575. January soybeans gained 3 cents, closing at $12.6250, with January soybean meal down $4.70 per ton, closing at $372.20. March wheat fell 31 cents, ending at $7.56. December live cattle fell $1.77, closing at $135. January crude oil gained $0.82, closing at $71.55 per barrel. The Dow gained 383 points, closing at 35,927, while the NASDAQ gained 328 points, closing at 15,566.
