MILK
Manufacturing facilities in the Central Region of the country report they are receiving sufficient milk supplies with spot milk still being offered as much as $10 below class. Discounts should erode next week as bottling will increase as schools will be open and more milk will be bottled, leaving less available to manufacturing. This does not mean milk supply will tighten, but it will mean that spot milk will not be discounted as much and not quite as available. Plants will receive sufficient milk from patrons and regular channels keeping schedules busy. Cheese prices increased Thursday after a day of steady prices, but that had limited impact on Class III futures. Gains were confined to January and February. Traders remain bearish of price potential over time. It is interesting to see continued interest in trading front-month December, as price movement is very limited with the contracts showing a price movement of 5 cents Thursday and 155 contracts traded with price remaining unchanged. The December Federal Order prices will be announced on Wednesday. The November Agricultural Prices report will be released Friday, providing average prices used in the calculation of income over feed for the Dairy Margin Coverage program.
AVERAGE CLASS III PRICES
| 3 Month: | $19.65 |
| 6 Month: | $19.24 |
| 9 Month: | $19.41 |
| 12 Month: | $19.59 |
CHEESE
Cheese prices were anticipated to show some weakness into the end of the year, but that has not yet been the case. It will be interesting to see what will transpire on the final trading day of the year, Friday. Obviously, the attitude of the market will not switch from the last trading day of 2022 and the first trading day of 2023, but the impact will be seen from supply and demand. Inventory of American cheese may close the year near the level of last year, while total cheese inventory may close the year above the end of 2021.
BUTTER
The concern over a butter shortage and some of the frenzy surrounding it is now just a memory. Butter prices have declined in the domestic market as well as overseas. Prices in the United Kingdom have also fallen with prices near the same level they were a year ago. Milk prices in the U.K. are being lowered due to plants selling butter below what they are paying for milk and cream. There is no indication where the market may find a bottom. Price fell 2.6% on the recent Global Dairy Trade auction. The average price of butter moving through ports in Argentina during the first half of November was down 0.3% with the average prices through ports in Uruguay during the first half of December down 3.3%.
OUTSIDE MARKETS SUMMARY
March corn declined 3.25 cents, closing at $6.7950. January soybeans gained 2.25 cents, closing at $15.0875, with January soybean meal down $2.20 per ton, closing at $464.10 per ton. March wheat declined 11.50 cents, closing at $7.74. December live cattle gained $1.05, ending at $158.50. February crude oil declined $0.56, ending at $78.40 per barrel. The Dow gained 345 points, closing at 33,221, while the NASDAQ gained 265 points, closing at 10,478.
