MILK
The weakness of cheese turned Class III futures lower with some contracts on the verge of moving to new lows. There is more questioning taking place as to how long these lower prices will last. After all, it was a year ago when milk prices were rising eventually making record highs even though supplies were sufficient and milk production only slightly below the previous year. The current attitude of the market is bearish and the market will need to prove that prices should move higher before the attitude might change. The March Class I price was announced today at $18.99, down $1.79 from February and $3.89 lower than March 2022. January dairy cattle slaughter was surprisingly high totaling 297,900 head. This was an increase of 31,600 head from December and 37,100 more than January 2022. This is a surprise due to the milk production report showing an increase of 9,000 cows from December. The only explanation would be that there would have been a lot of replacements entering the herd during the month. The slaughter level in January was the highest it had been since January 2020.
AVERAGE CLASS III PRICES
| 3 Month: | $17.80 |
| 6 Month: | $18.29 |
| 9 Month: | $18.82 |
| 12 Month: | $19.04 |
CHEESE
Cheese demand is variable. Consumers are active with purchases, but not quite to the level they were a year ago. Larger contract buyers are reportedly finishing up with second quarter bookings and are already turning their attention to the third quarter. Buyers on the immediate market purchase on price dips and step back at higher prices. This keeps the market range bound. USDA will release the January Cold Storage report tomorrow.
BUTTER
Butter supplies are plentiful with inventory growing. Demand is reported as steady to light with no real indication of any real interest developing for spring demand. Retail demand is light and weaker than forecast for this time of year. Buyers have been increasing ownership without having to chase the market. Inventory is expected to show strong growth during the month of January on the cold storage report tomorrow.
OUTSIDE MARKETS SUMMARY
March corn fell 13.75 cents closing at $6.6025. March soybeans declined 5.25 cents closing at $15.3425 with March soybean meal up $0.50 per ton closing at $493.10. March wheat gained 1.75 cents closing at $7.3825. February live cattle gained $0.25 ending at $165.15. March crude oil gained $1.44 closing at $75.39 per barrel. The Dow gained 109 points closing at 33,154 while the Nasdaq gained 83 points closing at 11,590.
