MILK
Class III milk futures closed lower for the week with new lows in the April and May contracts. This was interesting as spot prices showed little change for the week. Class IV futures were generally higher. There was little change in milk production this week other than some impact from the winter storm. However, that was more confined to the movement of milk and dairy products. Much of the disruption is back to normal again. Milk production in January remained strong with increasing cow numbers. Even though cheese inventory did not grow as usual and expected, it may not have much impact on the current market direction. Milk production is being pushed to be efficient and to make up for lower milk checks with higher volume. It may take more time for culling to increase enough to change the perception of milk supply later in the year. Overall, the winter has been good for cow comfort with the outlook being somewhat mild moving into March.
AVERAGE CLASS III PRICES
| 3 Month: | $17.73 |
| 6 Month: | $18.19 |
| 9 Month: | $18.71 |
| 12 Month: | $18.93 |
CHEESE
The January Cold Storage report was a bit friendly with American cheese, Swiss cheese, and total cheese stocks decreasing from December. Generally, they would show an increase as demand slows and stocks build. American cheese inventory decreased 6.5 million pounds from December totaling 818.8 million pounds and 2% lower than January 2022. Swiss cheese inventory decreased 876,000 pounds from December totaling 23.3 million pounds, down 6% from a year ago. Other cheese inventory increased 3.3 million pounds totaling 598.9 million pounds, up 3% from January 2022. This put total cheese inventory at 1.441 billion pounds and slightly lower than a year ago. For the week, blocks were steady with six loads traded. Barrels decreased 0.75 cent with 37 loads traded. Dry whey increased 1.50 cents with four loads traded.
BUTTER
Butter inventory was expected to increase and increase it did. Stocks jumped 46.3 million pounds totaling 262.7 million pounds. This is 20% above a year ago. Stocks certainly have done an about-face since August moving from 22% below the previous year to now 20% above. This should keep butter prices in a range with limited upside potential. For the week, butter gained 5.50 cents with only one load traded. Grade A nonfat dry milk decreased 0.50 cent with 10 loads traded.
OUTSIDE MARKETS SUMMARY
March corn fell 10.25 cents closing at $6.50. March soybeans declined 5.25 cents ending at $15.29 with March soybean meal up $4.00 closing at $497.10 per ton. March wheat fell 30 cents closing at $7.0825. February live cattle gained $0.05 cents closing at $165.20. March crude oil gained $0.93 closing at $76.32 per barrel. The Dow lost 337 points closing at 32,817 while the Nasdaq lost 195 points closing at 11,395.
