MILK
June Class III futures joined the May contract, closing above $25. There was good trading volume in closer futures contracts with sellers taking advantage of these higher prices. The action of the market over the past few weeks would seem as if there were a shortage of milk, but that is not the case. Milk is available and milk production is increasing seasonally. The strength stems for the desire of buyers to purchase supply in the event of tighter milk production as the year progresses. Buying of supply is taking place earlier than usual rather than later, as the just-in-time mentality has changed over the past two years. There is a desire of have more than enough this year and obtain it earlier rather than clamor for supply later when supply is tighter. Dairy cattle slaughter increased in February, according to the Livestock Slaughter report released Thursday. Dairy cattle slaughter for the month totaled 265,5000 head. This was 4,700 head higher than January and 1,300 head more than a year ago. This was a little surprising due to the milk production report showing an increase of 3,000 cows since January. More heifers must have come into the dairy herd.
AVERAGE CLASS III PRICES
| 3 Month: | $24.06 |
| 6 Month: | $24.37 |
| 9 Month: | $24.17 |
| 12 Month: | $23.68 |
CHEESE
Export demand is termed as strong with international buyers already purchasing supply for fourth-quarter needs. Domestic buyers are looking at purchasing for third-quarter needs. This is a big reason why prices are strong now. Buyers are not following the usual patterns due to the change in the marketplace and the difficulties being faced with hauling and exporting. Market participants are looking further ahead than usual and preparing accordingly.
BUTTER
Increasing demand for cream from ice cream manufacturers as well as other products is increasing the cost of cream. Butter churning remains active and sufficient to meet demand as well as build inventory. The growth of inventory was a little surprising during February, but even with that, it did little to close the gap between current supply and the level it was a year ago.
OUTSIDE MARKETS SUMMARY
May corn declined 9.50 cents, closing at $7.4825. May soybeans fell 18 cents, ending at $17.0075, with May soybean meal up $0.80 per ton, ending at $485.90. May wheat fell 20 cents, closing at $10.8575. April live cattle gained $0.25, ending at $139.67. May crude oil fell $3.46 per barrel, closing at $111.47. The Dow gained 349 points, closing at 34,708, while the NASDAQ gained 269 points, closing at 14,192.
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