MILK
June and later Class III milk futures posted new contract highs again Monday. Traders remain bullish on the market with more fuel added to the fire with the increase of cheese and butter prices. Underlying cash prices have not surpassed the previous highs, but there is anticipation that will take place. USDA released the February Milk Production report Monday, which was somewhat of a surprise. Milk production in the top 24 states was down 0.7%, totaling 16.7 billion pounds. Production per cow gained 3 pounds from February 2021. This was a surprise since production per cow in January was down 16 pounds from a year earlier. This is quite a change. The most interesting aspect of the report is that cow numbers in the top 24 states increased 3,000 head from January. Milk production for the U.S. declined 1% totaling 17.5 billion pounds. Production per cow increased by 1 pound from February 2021 with cow numbers up 3,000 head from January. Cow numbers in the country are 96,000 head less than a year ago. This report may indicate that the heavy culling of cows may have run its course. Feed prices remain high, but farmers may begin to respond to the high milk prices as indicated by current futures contracts.
AVERAGE CLASS III PRICES
| 3 Month: | $23.56 |
| 6 Month: | $24.04 |
| 9 Month: | $23.91 |
| 12 Month: | $23.42 |
CHEESE
Cheese prices have a little way to go before moving above the most recent highs, but they continue to work higher. There is no frenzy in the market, as there currently is no shortage of milk or cheese. Much of the buying seems to be for future demand as well as for current demand. Buyers are thinking ahead more so than usual in order make sure they will be able to meet and satisfy demand.
BUTTER
It was a nice move higher in butter Monday, putting price back to the level it was on March 9. Price is consolidating within a sideways range. Demand is holding well despite a little slowdown in the food service industry. February inventory is expected to show an increase on the cold storage report that will be released on Wednesday.
OUTSIDE MARKETS SUMMARY
May corn jumped 14.50 cents, closing at $7.5625. May soybeans gained 23 cents, ending at $16.91, with May soybean meal up $4.30 per ton, closing at $481.30. May wheat jumped 55.50 cents, closing at $11.1925. April live cattle declined $0.45, closing at $140.05. April crude oil jumped $7.42, closing at $112.12 per barrel. The Dow declined 202 points, ending at 34,553, while the NASDAQ declined 55 points, closing at 13,838.
