MILK
Class III milk futures were under pressure with lower closes each day in nearby months. December and January contracts made new lows. Class IV futures fell in line with the weakness of butter prices. Class IV futures have a significant price decline already factored into the market with January below $19 and likely to weaken further. December took a large hit this week with price down nearly $1 per cwt in response to the weakness of butter and nonfat dry milk. The September milk production, dairy cattle slaughter and cold storage reports did nothing to provide support to the market. Prices are trying to find a level at which buyers will step up to increase ownership for more than just holiday demand. Milk production is not expected to decrease much in the near term as producers focus on production and what it will take to maintain or improve production.
Farms continue to exit the dairy business with cows generally moving to other operations with culling less than expected.
AVERAGE CLASS III PRICES
| 3 Month: | $17.18 |
| 6 Month: | $17.54 |
| 9 Month: | $17.83 |
| 12 Month: | $18.05 |
CHEESE
For the week, blocks declined 5.75 cents with 12 loads traded. Barrels declined 2.75 cents with nine loads traded. Dry whey increased 0.50 cent with 19 loads traded.
Buyers have been more complacent this week, lowering bids to let sellers bring the market down to them. American cheese inventory in September was 1% above September 2022, which does not bode well for much strength in price through the end of the year. Demand will need to improve significantly by the end of the year or further price erosion could take place.
BUTTER
Price is on the defensive and will head lower in an attempt to find a level at which balance will return. There will be some buying as price slips lower, but the buying will be for immediate needs and not to build inventory. Cream is more available, which is increasing butter output. It is uncertain just how much demand will be maintained or increase over the next month, but September inventory above a year earlier leaves supply readily available.
OUTSIDE MARKETS SUMMARY
December corn closed up 1.50 cents per bushel at $4.8075, November soybeans closed up 17.75 cents at $12.9725 and December soybean meal closed up $12.90 per ton at $442.40. December Chicago wheat closed down 4 cents at $5.7550. December live cattle closed up $2.90 at $182.23. December crude oil is up $2.33 per barrel at $85.54. The Dow Jones Industrial Average is down 367 points at 32,418 with the NASDAQ up 48 points at 12,643.
