MILK
Milk futures have taken a beating and finally ran out of selling pressure today. This does not indicate cheese prices have finished the liquidation phase and prices will move back up again. Futures and cash are aligning themselves. USDA released the August Livestock Slaughter report which showed slaughter increased significantly. August slaughter totaled 275,500 head, up 31,300 head from July. This was an increase of 9,400 head from August 2022. This does not seem to make sense as it does not seem possible that cow numbers from July to August were unchanged according to the milk production report while federally inspected slaughter reports that much of an increase. Slaughter historically has increased substantially in January, but slaughter is generally not that heavy in summer. However, it is ironic that slaughter from July to August last year increased 33,000 head. This shows that there must have been a substantial number of replacements waiting in the wings that filled stalls during the month.
AVERAGE CLASS III PRICES
| 3 Month: | $17.54 |
| 6 Month: | $17.74 |
| 9 Month: | $17.92 |
| 12 Month: | $18.08 |
CHEESE
Cheese demand is good with some cheese manufacturers wanting to obtain extra loads of spot milk but are having a difficult time locating them. This does not mean milk production is tight or that plants do not have sufficient milk to keep plants operating on full schedules. Some plants would like more milk to make cheese to meet increased demand later in the year. Spot milk that is available is commanding a premium upwards of $1.50 over class. Cheese buyers have not felt the need to purchase supply more aggressively as sellers keep offering it to the market. If offers dry up, buyers may become more aggressive in their desire to purchase at these lower prices.
BUTTER
With the increase of price today, butter has moved back to the highest level since November 23, 2022. The strength has been a surprise as buyers desire to purchase for upcoming demand. There were 12 unfilled bids at the close of spot trading which might suggest strong buyer interest tomorrow as there were no offers in the market today. Butter supply is not short, but buyers are reacting to current demand and anticipating improving demand.
OUTSIDE MARKETS SUMMARY
December corn closed down 7.00 cents per bushel at $4.7525, November soybeans closed down 26.25 cents at $12.9375 and December soybean meal closed down $7.00 per ton at $388.10. December Chicago wheat closed down 13.00 cents at $5.7575.
December live cattle closed down $2.03 at $189.50. November crude oil is down $0.04 per barrel at $89.62. The Dow Jones Industrial Average is down 370 points at 34,070 with the NASDAQ down 245 points at 13,224.
