MILK
Milk futures have regained what they lost last week and then some. The strength has been incredible due to what could be termed the frenzy of buying in the spot market. It is unclear whether the strong buying in the spot market is due to increasing demand during the time of year in which demand is generally slower or if it is a fear of the potential of not having enough down the road. This may be triggering a sense of hoarding to some extent. The big question is how this will be perceived by dairy farmers. Will milk prices become attractive enough to stop the high rate of culling and begin to turn cow numbers around? Or will it not make any difference as farmers will need to see more of the impact of inflation and how it will affect the cost of production before any definite changes or plans are implemented. What may have triggered the expansion of farms and the increase of cow numbers in the past may no longer trigger that desire now. However, there are reports that processing plants have informed some of their patrons that they would be able to expand if they so desire. They would need to let the plant know of their intentions before planning to do it. If you are a farm that is considering this and your plant has indicated that if they would accept the extra milk, please get it in writing. Do not increase cow numbers and milk output without getting it signed, sealed, and delivered in order to protect the extra investment. USDA will release the World Agricultural Supply and Demand, Quarterly Stocks and Crop Production reports Wednesday.
AVERAGE CLASS III PRICES
| 3 Month: | $21.55 |
| 6 Month: | $21.42 |
| 9 Month: | $21.26 |
| 12 Month: | $21.03 |
CHEESE
It seems like cheese prices have rocketed higher based on how the Class III milk futures price are moving. However, cheese prices have been trending higher without too much excitement. Barrel cheese has moved back to the highest level it has been since late October and the top end of the range it had been in for over a year. Dry whey has been a strong influence supporting milk futures.
BUTTER
There is no price resistance for butter with buyers stepping in to purchase nearly on a daily basis. Buyers that have held back waiting for price weakness to purchase have regretted that decision as price has moved relentlessly higher. Price continues to move ever closer to the record high of $3.1350 in September 2015.
OUTSIDE MARKETS SUMMARY
March corn increased 1.25 cents. closing at $6.01. January soybeans gained 2 cents. closing at $13.7675. with January soybean meal down $0.30. closing at $427.30 per ton. March wheat gained 8.25 cents. ending at $7.7025. February live cattle gained $1.42, closing at $137.67. February crude oil closed at $81.22, up $2.99 per barrel. The Dow gained 183 points, ending at 36,252, while the NASDAQ gained 211 points, closing at 15,153.
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