MILK
Class III futures closed steady to lower compared to the end of last week even though there was quite a bit of volatility. It is interesting that futures did not push higher due to price increases in both block and barrel cheese for the week. The market seems to be anticipating more stability in the near term. December fluid milk sales totaled 3.9 billion pounds, which was 2.6% lower than December 2020. Whole milk sales declined 0.7%, flavored whole milk declined 5.8%, reduced-fat milk declined 7.9%, low-fat milk declined 9.1%, fat-free skim milk declined 11.0%, flavored fat-reduced milk sales jumped 35.3%, buttermilk increased 5.0%, with the sales of other fluid milk products up 7.2%. Organic whole milk sales declined 3.2%, organic flavored whole milk sales increased 9.9%, organic reduced-fat milk declined 3.2%, organic low-fat milk declined 3.7%, organic fat-free skim fell 19.9%. Organic flavored fat-reduced milk sales increased 4.6%, with sales of other organic fluid milk products up 57.1%. USDA will release the January Cold Storage report on Tuesday. Markets will be closed on Monday in observance of Presidents Day.
AVERAGE CLASS III PRICES
| 3 Month: | $22.04 |
| 6 Month: | $22.03 |
| 9 Month: | $21.83 |
| 12 Month: | $21.46 |
CHEESE
For the week, block increased 8 cents with seven loads traded. Barrels gained 2.50 cents with 14 loads traded. Dry whey declined 1.25 cents with nine loads traded. Milk supply remains available for cheese production, keeping plants busy at reduced levels. Plants continue to struggle with keeping manufacturing schedules at sufficient levels to process the milk to fill orders as well as build some inventory. The difficulty of maintaining the necessary workforce to keep operations efficient is an ongoing struggle. This is a challenge that does not seem to be getting any better. Extra milk is available for those who can process higher amounts at $2 under to class price. This indicates a market that is generally balanced and not short of milk.
BUTTER
For the week, butter declined 6.50 cents with 28 loads traded. Grade A nonfat dry milk declined 4.75 cents with 11 loads traded. Cream is sufficient for demand in all regions. Some cream is moving around due to some plants struggling with labor shortages. The amount of butter being produced is reported to be sufficient for filling orders as well as beginning to build inventory.
OUTSIDE MARKETS SUMMARY
March corn gained 4.25 cents, closing at $6.5425. March soybeans gained 9.50 cents, ending at $16.0150, with March soybean meal down $1.30 per ton, closing at $447.90. March wheat slipped a penny, ending at $7.97. February live cattle declined $0.15, closing at $143.25. March crude oil declined $0.69, ending at $91.07 per barrel. The Dow declined 233 points, closing at 34,079, while the NASDAQ declined 169 points, closing at 13,548.
