MILK
California seems to have weathered the heavy rains earlier with milk production termed as mixed. Outside cow lots are still drying out, affecting the recovery from those farms with others seeing steady milk production. Spot loads are being purchased and brought in with those loads being purchased at prices below Class. Spot milk in the Central Region was reported to still see some spot milk at $10 below class last week. Lower spot prices are generally not seen this long after the end of the year. Milk production is being handled easily with both bottling and manufacturing receiving sufficient supply. Buyers of production are purchasing because of low prices and not because of a fear of supply tightness. Class III futures settled mixed even though block cheese and dry whey prices increased. Futures had the gain already factored in with the strength during the second half of last week. Class IV futures continue to find support from butter and nonfat dry milk.
AVERAGE CLASS III PRICES
| 3 Month: | $18.11 |
| 6 Month: | $18.67 |
| 9 Month: | $19.13 |
| 12 Month: | $19.29 |
CHEESE
Blocks and barrels continue to retain a large spread between them. Barrels are more abundant than blocks with neither in a tight supply position. The wide spread is not having any significant impact on price strength or weakness. However, block cheese may be more in demand as buyers are looking to rebuild aging programs and to increase ownership for later demand. Inventory is expected to increase over the next few months.
BUTTER
Price continues to increase steadily with it having moved back to the level it has been since Dec. 22, 2022. Buyers have been taking advantage of the low price to begin increasing ownership as well as forward contracting, thinking the low might be in. They want to hedge against higher prices. A large amount of bulk butter is reported to be moving to freezers for later use. With current production being heavy, there may be a limit to how aggressive buyers will be with prices maybe reaching a plateau soon.
OUTSIDE MARKETS SUMMARY
March corn gained 4.50 cents, closing at $6.85. March soybeans gained 0.25 cent, ending at $15.4275 with March soybean meal up $4.60 per ton, closing at $504. March wheat gained 6 cents ending at $7.92. March crude oil declined $0.57, closing at $79.16 per barrel. The Dow increased 377 points, closing at 34,246, while the Nasdaq gained 174 points, closing at 11,892.
