MILK
Class III futures for January through March contracts hit new lows as further weakness in cheese surfaced. January fell below $16, closing at $15.90 and increasing the concern over just how low milk prices may go during the first part of 2024. It does not seem as if much will change over the next few weeks or possibly longer.
Class IV futures were mixed due to the increase in butter price. USDA will release the November Milk Production report on Monday. I estimate milk production to be down 0.4% from the previous year with cow numbers down 3,000 head from the previous month.
The South Dairy Trade results were released earlier this week. This shows the average prices and the change from the previous two-week period for dairy products moving through ports in Argentina and Uruguay. During Oct. 16-31, there were 12,571.27 tons moved through Argentina to 33 destinations at an average price of $3,221.34 per ton.
Whole milk powder priced 2.8% to $3,177.45 or $1.44 per pound. Skim milk powder declined 2% to $3,048.96 per ton or $1.38 per pound. Semi-hard cheese declined 1.1% to $4,086.69 or $1.85. Hard cheese increased 4.4% to $5,887.18 per ton or $2.67 per pound. Butter decreased 7.1% to $4,225.79 or 41.92 per pound. Buttermilk was unchanged at $1,925 per ton or $0.87 per pound. In Uruguay, there were 8075.01 tons shipped to 29 destinations at an average price of $3,209.91. Whole milk powder declined 1.9% at $3,109.81 per ton or $1.41 per pound. Skim milk powder increased 9% to $3,367.07 per metric ton or $1.53 per pound. Semi-hard cheese decreased 3.8% to $4,821.47 per ton or $2.19 per pound. Hard cheese increased 7.3% to $6,054.79 per ton or $2.75 per pound. Butter increased 6.5% to $4,877.76 per ton or $2.231 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $16.06 |
| 6 Month: | $16.73 |
| 9 Month: | $17.26 |
| 12 Month: | $17.57 |
CHEESE
For the week, blocks declined 1 cent with nine loads traded. Barrels fell 10.50 cents with 27 loads traded. Dry whey remained unchanged with two loads traded. The decline in barrels put pressure on Class III futures. Manufacturers are not interested in holding on to extra supply with the hopes that price will increase in the near term. They would rather move it rather than pay for storage since the potential price may not increase sufficiently to pay for the storage.
BUTTER
For the week, butter fell 18 cents with eight loads traded with the price moving back to the lowest level it has been since early July. Grade A nonfat dry milk slipped 0.50 cent with six loads traded. The bump in price today does not indicate support has been found. There is a strong potential price will move lower before the end of the year.
OUTSIDE MARKETS SUMMARY
March corn closed up 3.75 cents per bushel at $4.8300, January soybeans closed up 1.75 cents at $13.1575 and January soybean meal closed up $1.90 per ton at $405.60. March Chicago wheat closed up 13.50 cents at $6.2925. February live cattle closed up $1.43 at $169.35. January crude oil is down $0.15 per barrel at $71.43. The Dow Jones Industrial Average is up 57 points at 37,305 with the NASDAQ is up 52 points at 14,814.
