MILK:
Dairy Market News reports milk production in the Northeast is steady to increasing. This is being welcomed by manufacturing plants as demand for cheese remains strong. Milk is being picked up but there remain some difficulties as far as handling all the milk due to employees being absent. Staffing should be improving as it seems the country is over the impact of COVID infections that resulted from the holiday period. Some milk is being shifted to other plants depending on the amount of milk a plant can handle. Spot cheese and butter prices are falling, which is leaving some plants holding higher-priced inventory and buyers sitting on higher-priced product after purchasing aggressively in December and the first half of January. It is hard to believe that February Class III futures reached a high of $22.95 two weeks ago and are now $3.50 lower with futures back down to where they were just before Christmas. Dairy cattle slaughter in December totaled 267,800 head. This was an increase of 22,500 head from November but 5,700 head less than December 2020. This is the third highest slaughter of this year.
AVERAGE CLASS III PRICES:
| 3 Month: | $19.99 |
| 6 Month: | $20.30 |
| 9 Month: | $20.39 |
| 12 Month: | $20.32 |
CHEESE:
Block cheese price has declined 7.75 cents so far this week with barrels down 15 cents. Even though barrels have fallen 30 cents from their highs while blocks are down 33.50 cents, buyers still show little interest in buying the break. There is the idea that the market may be overdone to the downside, but it seems that it likely was overdone to the upside, and now the market is trying to discover where the true value is based on supply and demand. Cheese plants remain busy as demand remains steady.
BUTTER:
The huge decline of butter Wednesday was a surprise. No one stepped in aggressively to purchase the break. This weakness may keep buyers on the sidelines. There are some plants and buyers holding a lot of higher-priced inventory right now. There was an idea that downside price risk would be minimal. Domestic demand for butter is steady but has slowed a little. International demand remains strong.
OUTSIDE MARKETS SUMMARY:
March corn gained 7 cents, closing at $6.27. March soybeans jumped 32.75 cents, closing at $14.40 with March soybean meal up $8.50 per ton, closing at $400.50. March wheat fell 23 cents, ending at $7.95. February live cattle gained $0.95, closing at $138.05. March crude oil gained $1.75, closing at $87.35 per barrel. The Dow declined 130 points, closing at 34,168, while the NASDAQ gained 3 points, ending at 13,542.
