MILK
It does not seem possible that the income-over-feed price for the month of January would be $11.54, but that is what the average prices for corn, soybean meal and supreme/premium hay price compared to the all-milk price indicated. The all-milk price was $24.20, up $2.40 from December, outpacing any of the gains in feed prices. A year ago, the price was $17.50, a gain of $6.70. The average corn price was $5.57, up $0.10 from the previous month and up $1.33 per bushel from January 2021. The soybean meal price was $421.21 per ton, up $21.60 per ton from December, but down $18.03 from January 2021. Meal being lower than a year ago was a little bit of a surprise. However, that is one reason why we had a substantial Dairy Margin Coverage program payment last year. The supreme/premium hay price was $262 per ton, an increase of $9 per ton from December and up $56 per ton from a year ago. In January 2021, the income-over-feed price was $7.14 and quite a difference from now. The price in December was $9.53. This is the highest it has been since November 2020.
AVERAGE CLASS III PRICES
| 3 Month: | $21.91 |
| 6 Month: | $22.15 |
| 9 Month: | $22.10 |
| 12 Month: | $21.75 |
CHEESE
Block cheese price likes to hang around the $2 price level. There is anticipation price will move above that level and trend higher. The milk production report showing a significant slowing of production in January was not enough to establish a steady trend higher -- at least not yet. If milk production continues to slow, it might result in significantly higher prices over time.
BUTTER
Butter futures are now carrying a slight premium to cash due to the market correcting and remaining more closely aligned with supply and demand. For quite some time, futures held a large discount to cash even though traders anticipated a tight supplies and higher prices. That may still come to fruition, but it may take some time before that unfolds.
OUTSIDE MARKETS SUMMARY
March corn jumped 38 cents, closing at $6.9750. March soybean meal jumped 54 cents, ending at $16.4425, with March soybean meal gaining $6.60 per ton, closing at $454.90. March wheat jumped 85 cents, closing at $9.28. April live cattle declined $0.50, closing at $141.42. April crude oil jumped $4.13 per barrel, closing at $95.72. The Dow declined 166 points, while the NASDAQ gained 57 points.
