MILK
USDA released the February Federal Order class prices today with declines for all categories. Class II was announced at $20.83, down $0.78 from January. This is $2.96 lower than a year ago. Class III price was $17.78, down $1.65 from the previous month and $3.13 lower than February 2022. Class IV price was $18.86, down $1.15 from January and $5.14 below a year earlier. This is going to hurt when the milk checks come out this month. There is a strong possibility price was move lower as we progress toward spring. May, June, and July Class III futures made new lows again today as premium erodes out of the market. It is interesting to note that Dairy Market News indicates milk production in the Northeast and Mid-Atlantic states is steady to higher with some indicating milk production is ramping up towards spring flush levels. Milk supply is abundant for processing needs. Class IV futures were hit hard today posting significant losses due to the fall of butter. Class III futures were lower but without the pressure. The average soybean meal price for January was released at $482.40 per ton, up $19.55 per ton over December. Income over feed for January was $7.94 providing a substantial payment under the Dairy Margin Coverage program.
AVERAGE CLASS III PRICES
| 3 Month: | $17.75 |
| 6 Month: | $18.37 |
| 9 Month: | $18.84 |
| 12 Month: | $18.95 |
CHEESE
Cheese manufacturers in the Midwest indicate steady to strong cheese demand. Demand is being met but inventory is not building. However, this is not supporting prices are they continue to struggle. Even with inventory below a year ago on the January Cold Storage report, supplies remain historically large and cheese production is ongoing. Buyers see sufficient supplies leaving them less aggressive.
BUTTER
Price giving back what it gained since last week was a bit of a surprise. Price was anticipated to erode but not all in one day. Cream supply is abundant keeping churning active. Demand is being met and inventory is building.
OUTSIDE MARKETS SUMMARY
March corn jumped 11 cents closing at $6.4050. March soybeans jumped 13.75 cents closing at $15.0425 with March soybean meal gaining $2.80 per ton closing at $490.40. March wheat gained 5.50 cents ending at $6.97. April live cattle lost $0.35 closing at $165.12. April crude oil gained $0.64 closing at $77.69 per barrel. The Dow gained 5 points closing at 32,662 while the Nasdaq declined 76 points closing at 11,379.
