MILK
It looks like milk futures are aiming to regain what was lost late last week. Even though cheese prices weakened somewhat, the anticipation is that it will be minimal and short-lived. Overall, demand for dairy products is holding well. The concern is whether increasing costs of production will override the desire to hold onto cows as well as add cows. The outlook for higher milk prices always increases the interest to increase production. However, it may take higher milk prices and a continued bullish outlook to turn the trend. Farmers will be cautious, as they do not want to lay out money to add cows only to have milk prices slide lower again while costs remain high. The market will need to prove itself, and it is uncertain how long that will take in the current market environment.
AVERAGE CLASS III PRICES
| 3 Month: | $21.12 |
| 6 Month: | $20.98 |
| 9 Month: | $20.85 |
| 12 Month: | $20.65 |
CHEESE
Traders seem to feel cheese prices are simply taking a breather before heading back higher again. Strong demand both domestically and internationally should support prices. A report out Monday indicated consumers are spending 25% more today than they were before COVID erupted. Increased home prices, increasing wages and higher stock prices are the result. This should keep demand for dairy products strong even at higher prices. Consumers can afford it, so they will continue to purchase.
BUTTER
If you can remember, years ago, the cry was that butter was no good for you. Margarine was the answer to better health. We do not hear any of that anymore, as butter is healthy and the preferred ingredient for cooking and baking. Many fast-food restaurants have switched to butter, as consumers prefer the taste. Increasing price will not deter that demand. It will take some time to rebuild inventory.
OUTSIDE MARKETS SUMMARY
March corn declined 7 cents, closing at $5.9975. January soybeans fell 26.75, ending at $13.7475, with January soybean meal down $5.90 per ton, closing at $427.60. March wheat gained 3.50 cents, ending at $7.62. February live cattle declined $1.07, closing at $136.25. February crude oil declined $0.67, closing at $78.23 per barrel. The Dow declined 162 points, closing at 36,069, while the NASDAQ gained 7 points, closing at 14,943.
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