MILK
The Department of Agriculture announced today that dairy producers can sign up for the Dairy Margin Coverage (DMC) program for 2023. Supplemental Dairy Margin Coverage will also be available for 2023 which allows for farms that had increased production over the years to enroll the additional production in the program. Supplemental DMC is applicable to 2021, 2022 and 2023 to farms with production less than 5 million pounds able to enroll increased production. If you have already enrolled in Supplemental DMC, it will automatically roll over to 2023. Those who have not will be able to enroll during this signup period. The enrollment period will run through December 9. Class III milk futures were cautiously higher today. There is little incentive for traders to buy into the market for the long term. Milk production is improving, and cheese inventory is large. Inventory may be ending the year at a higher level than last year. Slower demand due to higher retail prices for food as well as other goods may impact prices more than anticipated unless production slows, and demand holds.
AVERAGE CLASS III PRICES
| 3 Month: | $20.72 |
| 6 Month: | $20.33 |
| 9 Month: | $20.26 |
| 12 Month: | $20.24 |
CHEESE
The rebound of barrel cheese indicates the price decline on Friday was overdone. Buyers came in to take advantage of the decline to pick up supply. Sellers were willing to move product rather than hold back waiting for a higher price. There will be limited upside potential with manufacturers willing to move product. It is unclear how much cheese is already purchased through the end of the year and how much has already moved to retail and food service outlets.
BUTTER
Price has a chance to retest the record highs of about two weeks ago, but it may be difficult to attain moving through the rest of this month. Demand has been good and expected to remain good through the holidays, but with some already forward purchased by consumers and end users, buying on the daily spot market may slow taking price down with it. Butter futures show traders anticipate the average November price to be below $3.00.
OUTSIDE MARKETS SUMMARY
December corn declined 6.25 cents closing at $6.8350. November soybeans gained 1.50 cents closing at $13.8525 with December soybean meal down $0.10 per ton closing at $411.00. December wheat gained 1.245 cents ending at $8.61. October live cattle gained $0.92 closing at $147.87. November crude oil declined $0.15 closing at $85.46 per barrel. The DOW increased 551 points ending at 30,186 while the NASDAQ jumped 354 points closing at 10,676.
