MILK
The bullish attitude in the market was clearly seen the last half of the week. Even though block cheese and butter prices fell, it had limited impact on milk futures. The decline has been more than expected, and yet buyers did not step back up to the plate more aggressively. Traders believe the weakness of blocks and butter will be short lived. Milk production and movement will be significantly hindered over the weekend as the winter storm blankets a large area of the country. Milk production is expected to be affected to some degree, but the greater problem will be plants being able to process the milk they receive as employees will have difficulty coming to work and then the delivery of that milk and cheese will be hindered due to hazardous road conditions. Fluid milk sales in November declined 0.9% from November 2020. Whole milk sales were unchanged, flavored whole milk declined 5.8%, reduced-fat milk declined 10.3%, low-fat declined 6.8%, fat-free skim sales were down 8.9%, flavored fat-reduced milk jumped 46.0%, buttermilk increased 8.1% with other milk products up 38.1%. Organic whole milk sales gained 2.2%, organic flavored whole milk increased 30.3%, organic reduced-fat declined 5.5%, organic low-fat increased 7.6%, organic fat-free skim sales fell 14.9%, organic flavored fat-reduced fell 27.0% with other organic products up 64.3%. Markets will be closed on Monday due to Martin Luther King Jr. day.
AVERAGE CLASS III PRICES
| 3 Month: | $21.60 |
| 6 Month: | $21.61 |
| 9 Month: | $21.48 |
| 12 Month: | $21.26 |
CHEESE
The block-barrel spread moved 17 cents this week, taking it from barrels being 13 lower than blocks to 4 cents higher than blocks by the end. Suddenly, barrels were in a tight position with buyers turning aggressive. Cheese price diverged significantly for the week with block down 7.50 cents with four loads traded. Barrels increased 9.50 cents with seven loads traded. Dry whey increased 1.25 cents with three loads traded.
BUTTER
With all the volatility, butter only declined 1.75 cents for the week. Price moved higher through Tuesday and then fell back into the weekend. There were 28 loads traded. Grade A nonfat dry milk was the star of the week with a price gain of 10.50 cents with 13 loads traded. A move of this magnitude over the course of one week is practically unheard of. This is what has been supporting Class IV futures.
OUTSIDE MARKETS SUMMARY
March corn gained 8.75 cents, closing at $5.9625. March soybeans declined 7.50 cents, closing at $13.6975, with March soybean meal down $3.30 per ton, closing at $405.60. March wheat declined 5.25 cents, ending at $7.4150. February live cattle gained $0.97, closing at $137.97. February crude oil gained $1.70, closing at $83.82 per barrel. The Dow declined 202 points, closing at 35,912, while the NASDAQ gained 87 points, closing at 14,894.
