MILK
Milk production is lower than a year ago but is slowly improving from winter levels. USDA will release the milk production report on Monday, providing information on what took place in February. There could be a noticeable adjustment in production per cow, as it seemed as if they reduced production per cow too much in January. The report will give us an indication as to whether higher milk prices are slowing culling and improving milk production. Income over feed was very strong in January, which would be positive. However, income over feed does not reflect the substantial increase in cost other than feed. The increase of milk price may only result in keeping pace with rising costs and not really result in greater profitability. Milk futures are strong with traders maintaining optimism, which provides continued strong support under the market. Some plants report that they would like to have more milk for processing and are encouraging patrons to increase production. This is interesting since spot milk is available at $2 below class to class in the Central region. This may not be available in all areas, but it is a barometer of milk supply.
AVERAGE CLASS III PRICES
| 3 Month: | $23.12 |
| 6 Month: | $23.55 |
| 9 Month: | $23.51 |
| 12 Month: | $23.05 |
CHEESE
Export demand remains strong for cheese due to price being significantly lower than the world price. However, higher shipping costs may not make it a bargain but still very competitive, and we have it available. Overall, demand is steady with some areas seeing an increase in demand from restaurants due to warmer weather allowing for more outdoor activity and dining depending on the area. Ongoing demand will determine the strength of prices as time moves forward. Higher prices may limit some demand, which could leave the market in a sideways pattern.
BUTTER
Manufacturers have been producing butter in preparation of the Easter season. Orders have generally been filled with retail and food service taking delivery ahead of time to make sure it is available when needed. Demand for cream is increasing from ice cream manufacturers, but that is not causing any slowing in butter production. Plants continue to have challenges with maintaining a full workforce, leaving less production than desired in some cases. Nevertheless, demand is being filled with inventory slowly building.
OUTSIDE MARKETS SUMMARY
May corn jumped 24.50 cents, ending at $7.5450. May soybean gained 19.25 cents, closing at $16.6850, with May soybean meal down $3.90 per ton, closing at $474.10. April live cattle gained $0.12, ending at $139.47. April crude oil jumped $7.94 per barrel, closing at $102.98. The Dow gained 418 points, closing at 34,481, while the NASDAQ gained 178 points, closing at 13,615.
