MILK
The milk market is very concerning with no support being found in underlying cash. December, January and February Class III contracts have made new contract lows again Monday with lower futures prices through July. Class IV futures fared better but closed lower in numerous contracts.
USDA released the October Milk Production report which showed milk production in the top 24 states down 0.4%, totaling 17.9 billion pounds. Milk production per cow was 3 pounds below October 2022, totaling 2,013 pounds. Cow numbers declined 5,000 head from October with cow numbers 19,000 head less than a year ago. Milk production in the U.S. was down 0.5%, totaling 18.7 billion pounds. Milk production per cow was 1,997 pounds, down 1 pound from October 2022. The total number of cows in the country was 9.37 million head and was 42,000 less than a year ago.
Ten of the top 24 states show a decline in milk output. The largest percentage decline of milk production took place in New Mexico, down 9%. This was followed by Oregon with a decline of 4.1%. Colorado was down 3.4% with California down 2.6%. The rest of the states posting a decline were down less than 2%.
South Dakota showed the largest increase with milk production up 6.6%. This was followed by a 6.2% increase in Florida. Arizona gained 3.7% with all the other gains being less than 3%.
AVERAGE CLASS III PRICES
| 3 Month: | $16.68 |
| 6 Month: | $17.12 |
| 9 Month: | $17.51 |
| 12 Month: | $17.82 |
CHEESE
The barrel price fell 16 cents over the past two days, setting a very negative tone in the market. Sellers continue to offer cheese at lower prices to move supply. With current supply and the inability to raise prices during the time of year during which increased buying generally takes place, it is unlikely there will be much upside price potential for the foreseeable future. Supply is higher than demand.
BUTTER
The increase in butter price today is likely not going to hold. There is no reason for the butter price to rise as churning has increased due to an increased cream supply. Much of the buying for the holidays has already been done. Manufacturers have no interest in holding supplies for a possible price increase or a concern over a possible tighter supply. The cold storage report to be released Wednesday will provide a clearer indication of supply and demand in October.
OUTSIDE MARKETS SUMMARY
December corn closed up 2.50 cents per bushel at $4.6950, January soybeans closed up 27 cents at $13.6725 and December soybean meal closed up $6.90 per ton at $460.20. December Chicago wheat closed down 7.25 cents at $5.4350. February live cattle closed down $0.15 at $176.65. January crude oil is up $1.79 per barrel at $77.83. The Dow Jones Industrial Average is up 204 points at 35,151 with the NASDAQ is up 159 points at 14,285.
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