MILK
Milk futures were able to rebound Thursday after two days of selling. Strength in block cheese and butter resulted in short-covering and new buying interest with traders anticipating a rebound in prices to some extent. The increase is not expected to last very long with prices likely remaining in a sideways range. It may be difficult for Class III futures to move back above $25 due to the weakness of dry whey. The decline of dairy herds in 2021 was at the slowest rate in four years. There were 1,794 dairy herds that stopped production last year. Over the past 20 years, the average decline of dairy herds has been 2,300 per year. However, all those cows did not go to slaughter last year, with many moving to other farms with the average dairy herd size totaling 316 head. The state with the largest average herd size was New Mexico with 2,752 head. The state with the smallest average herd size was Pennsylvania with 93 cows per herd. Milk production last year reached a record high of 226.0 billion pounds. Cow number began to decline during the second half of last year but may begin to rebuild again as indicated by the two recent milk production reports.
AVERAGE CLASS III PRICES
| 3 Month: | $24.54 |
| 6 Month: | $24.30 |
| 9 Month: | $23.88 |
| 12 Month: | $23.27 |
CHEESE
Demand for cheese remains strong both domestically and internationally. There are reports that buyers form Asia are purchasing loads of cheese to be shipped in the fourth quarter. That has been some of the reason cheese buyers have been purchasing ahead rather than just for near-term needs. I have reported numerous times that buyers have been purchasing much further ahead than usual in the attempt to increase ownership for anticipated demand as well as to prepare to fill orders that have been placed much more in advance than usual. End users are allowing more time to obtain supply by ordering earlier. This may reduce aggressive demand later in the year.
BUTTER
Churns have sufficient cream available for production. There is more demand from ice cream production, but with many plants suffering from the lack of employees, the balance has been good. Butter is being produced to meet demand, while at the same time, inventory is building seasonally. Export demand remains strong.
OUTSIDE MARKETS SUMMARY
May corn closed 0.50 cent higher at $8.16. May soybeans fell 20 cents, ending at $17.0650, with May soybean meal down $10.80 per ton, closing at $440.20. May wheat declined 6 cents, closing at $10.74. June live cattle declined $1.12, closing at $133.90. June crude oil gained $3.34, closing at $105.36 per barrel. The Dow jumped 614 points, closing at 33,916, while the NASDAQ gained 383 points, closing at 12,872.
