MILK
Class III milk futures are nearly straight up as fear has gripped the market. It does not matter that milk supply is sufficient for demand at the present time. Traders are looking ahead to potentially declining milk production due to escalating cost of production. There seems to be no end to increasing feed and fuel prices. This will affect milk production as time moves forward for those who purchase much of their feed. Of course, it will affect the purchase of supplements for everyone, with some feeling the impact more than others depending on the rations. Not only that, but prices for everything will increase as fuel prices increase. Those will be passed on as surcharges in many cases or they will be added into the cost of purchased products. Thus, the increasing milk prices may not be as exciting, as higher milk prices will be needed to pay for the higher costs of everything else. Class IV milk was mixed Monday with limited trading activity as the weakness of nonfat dry milk offset the strength of butter.
AVERAGE CLASS III PRICES
| 3 Month: | $23.56 |
| 6 Month: | $23.63 |
| 9 Month: | $23.28 |
| 12 Month: | $22.70 |
CHEESE
Cheese supply is not tight with strong production and sufficient inventory. However, prices are working higher as buyers are again looking ahead to purchase for future anticipated needs. Prices had broken out of the long-term sideways trading range they had been in a while back and are slowly working higher. Buyers seem confident the market will not fall anytime soon and are increasing ownership of cheese that is not yet on the books as far as orders are concerned. They are buying to remain ahead of increasing prices.
BUTTER
Butter is a little different than cheese, as it does not go through the aging process. Butter can be frozen and then brought out later and sold on the spot market. Since March 1, only butter that has been produced since Dec. 1, 2021, can be traded on the CME daily spot market, which may tend to tighten what is available to the daily market for a short time. Earlier-produced butter can be bought and sold in the country and used for export, keeping demand satisfied and inventory moving.
Outside Markets Summary
May corn declined 7.25 cents, closing at $7.4925. May soybeans declined 2 cents, closing at $16.7425, with March soybean meal down $1 per ton, closing at $467.90. March wheat jumped 77.25 cents, closing at $14.2525. April live cattle jumped $2.12, ending at $137.90. April crude oil gained $3.72 per barrel, closing at $119.40. The Dow fell 797 points, closing at 32,817, while the NASDAQ fell 482 points, closing at 12,831.
