MILK:
Milk futures posted double-digit losses in most contracts. Class III declined due to further losses in cheese prices. Futures have had a significant price swing again Wednesday with ranges of 30-60 cents from high to low. Class IV declined as the market corrected from futures pushing too high and remaining that way even though butter price declined last week. Milk production is reported to be steady and, in some cases, higher. Weather had affected milk movement over the weekend, but there was little impact on overall production. Spot milk is less available in areas, prompting plants to look outside of their region to find available supply. Bottling for school accounts is steady with some school systems ordering less due to more at-home, virtual instruction recently due to the surge of COVID cases. There are some reports of expansions taking place, but that is the exception and not the norm. The price of cows has increased, as there is some increasing demand to add cows on farms. This is not widespread and will not change the market anytime soon. Heifer supplies are tighter, limiting the addition of cows with the exception of purchasing from another farm.
AVERAGE CLASS III PRICES:
| 3 Month: | $21.29 |
| 6 Month: | $21.45 |
| 9 Month: | $21.35 |
| 12 Month: | $21.13 |
CHEESE:
Dairy Market News reports that cheese sales are slowing in the Central region of the country. That was anticipated, but buyers were aggressive in their desire to purchase cheese ahead of time to make sure they had supply on hand for demand. Now that some have sufficient cheese on hand for the first quarter and maybe later demand, they are slowing their purchases. The high cheese prices have begun to affect demand a bit. However, price is not expected to decline very much due to overall continued strong demand.
BUTTER:
Some butter plants are ramping up production as cream supply is increasing. Some butter is now being added to lower inventories, but it will take some time to build up supply. Ongoing demand is strong. Generally, demand slows somewhat during the first quarter of the year, but it has so far remained strong. Some of it is the result of buyers purchasing ahead of time rather than purchasing on an as-needed basis.
OUTSIDE MARKETS SUMMARY:
March corn gained 11 cents, closing at $6.1050. March soybeans jumped 30 cents, closing at $13.9125, with March soybean meal up $8.20, closing at $398.30 per ton. March wheat jumped 27.50 cents, closing at $7.9650. February live cattle gained $0.87, closing at $138.55. February crude oil gained $1.53, closing at $86.96 per barrel. The Dow declined 340 points, closing at 35,029, while the NASDAQ declined 167 points, closing at 14,340.
