MILK
Class IV futures fell more than Class III futures again today. This moved March through November Class IV prices below Class III. The weakness of butter and nonfat dry milk is now outpacing the decline of cheese and dry whey with the most pressure stemming from nonfat dry milk. Fundamentals do not suggest a change anytime soon. Dairy Market News reports that milk production in California is steady to lighter feeling some impact from the heavy rains. So far, the impact has not been as much as feared but there could certainly be some lingering effects once the weather settles down. However, much of the rest of the country continues to hold or increase milk production. The February Advanced Class I price was announced at $20.78, a decrease of $1.63 from the previous month and $0.86 lower than February 2022. This may keep some fluid milk buyers less aggressive until February when they will be able to take advantage of the lower pricing.
AVERAGE CLASS III PRICES
| 3 Month: | $18.56 |
| 6 Month: | $18.62 |
| 9 Month: | $18.92 |
| 12 Month: | $19.13 |
CHEESE
Demand is mixed depending on variety and location. Cheese prices indicate buyers are not concerned over supply and are buying as needed and at lower prices. There is some rebuilding of aging programs with some of it taking place due to increased production and supply beginning to become greater than demand. Inventory seasonally builds during the first half of the year and that is just beginning. Strong milk output is expected to continue for a period which will keep cheese output strong.
BUTTER
With plentiful cream supply, churning remains active. Plants are utilizing normal supplies without having to reach out into the spot market aggressively. More contracts are being made for the first quarter, but little contracting is being done for later in the year due to the potential for further price weakness.
Outside Markets Summary
March corn declined 4 cents ending at $6.7725. March soybeans declined 9.75 cents ending at $15.1475 with March soybean meal down $6.90 per ton closing at $471.20. March wheat declined 8 cents ending at $7.3450. February live cattle declined $0.85 closing at $155.95. February crude oil gained $0.85 closing at $80.33. The Dow lost 252 points ending at 33,045 while the Nasdaq lost 105 points closing at 10,852.
