Thursday Closing Dairy Market Update - December Exports Remain Strong

MILK:

Traders firmly believe milk prices will continue higher and are not following the weakness of barrel cheese and dry whey over the past few days. They have chosen to focus more on the estimates released by USDA on the World Agricultural Supply and Demand Estimates report. Estimated prices may come to fruition as the year progresses, but in reality, those prices are already there. Both the average Class III and Class IV futures are already above the estimated average prices. Product prices are already above the estimated levels. Prices could settle where futures are anticipating right now, and prices would be near where they are right now. However, we know that there will be significant volatility throughout the year. Dairy exports have done well in 2021 with the value of exports reaching a record-high $7.751 billion, up 18% over 2020. Total dairy exports were 10% higher than 2020. There was a little slowing in December with total exports slipping 3.8% from December 2020. Yet, the value of those exports increased 17.5% to $602.2 million.

AVERAGE CLASS III PRICES:

3 Month:	$21.80
6 Month:	$21.96
9 Month:	$21.85
12 Month:	$21.51

CHEESE:

Exports of cheese in December totaled 31,041 metric tons, up 20.1% for December 2020. Total cheese esports for the year reached 404,675 metric tons, surpassing the previous record set in 2014. Dry whey exports fell back in December, declining 24.9% compared to a year ago with a total of 39,471 metric tons exported. However, for the year, whey exports are up 10% from 2020.

BUTTER:

Butterfat exports were good in December, posting a gain of 28.5%, totaling 4,781 metric tons. It was the leader for the year with overall exports up 121% compared to 2020. Even with some issues with shipping, exports were able to improve substantially. Skim milk powder/nonfat dry milk exports declined 3.9% in December, totaling 57,600 metric tons. For the year, exports gained 10%. Whole milk powder in December jumped 39.1%, totaling 4,316 metric tons and were up 10% for the year.

OUTSIDE MARKETS SUMMARY:

March corn declined 5 cents, closing at $6.4175. March soybeans fell 20.50 cents, ending at $15.7425, with March soybean meal down $7.90 per ton, closing at $454. March wheat declined 13.50 cents, closing at $7.7150. February live cattle declined $0.55, closing at $142.35. March crude oil gained $0.22, settling at $89.88 per barrel. The Dow fell 526 points, closing at 35,242, while the NASDAQ fell 305 points, closing at 14,186.