MILK:
Class III milk futures finally showed some strength into the close. Higher cheese prices triggered some short covering resulting in the gains. That was likely much of the activity today rather than traders establishing long positions as price increases of underlying cash have not lasted very long for quite some time. Increasing milk production keeps sufficient milk available for demand with extra milk being offered on the spot market at substantial discounts to class prices. The Northeast Federal Milk Marketing Order 1 authorized the discarding of surplus milk beginning today. This decision was based on labor shortages, trucking and freight shortages, and equipment hindrances. There is quite a bit of time remaining for spring flush which could increase milk availability significantly.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.17 |
| 6 Month: | $18.09 |
| 9 Month: | $18.41 |
| 12 Month: | $18.45 |
CHEESE:
Cheese demand is variable depending on the variety of cheese and plant location. Spot milk prices are reported this week as low as $12 below class. A year ago, spot milk was $2.50 under to $0.50 over class. This leaves a plentiful milk supply for cheese production. However, some cheese production is being hindered by the lack of employees and trucking logistics. Some plants have the capacity to increase production but are not able to due to the available workforce. That may be a big reason why cheese inventory has not been increasing as usual during this time of year.
BUTTER:
Churns remain active as cream supply is available. There are reports the available supply is beginning to decrease and should decrease steadily over the next few weeks. Ice cream production is increasing, and hotter weather will have an impact. Butter demand is good but not exceptional.
OUTSIDE MARKETS SUMMARY:
July corn closed up 9.25 cents per bushel at $5.9400, July soybeans closed down 10.25 cents at $14.0400 and July soybean meal closed up $.50 per ton at $419.50. July Chicago wheat closed down 2.25 cents at $6.4125. June live cattle closed down $0.93 at $163.00. June crude oil is down $0.93 per barrel at $72.78. The Dow Jones Industrial Average is down 30 points at 33,531 while the NASDAQ is up 127 points at 12,306.
