MILK
One must wonder when the selling pressure will end. January through March Class III futures continue to make new lows following the weakness of cheese. Manufacturers intend to limit inventory through the end of the year and are selling what they produce at whatever price they can get.
It is not a factor of the milk supply being over-abundant but the fact that demand is not as great as it should be, and manufacturers are attempting to keep inventories from increasing. What may prolong this downturn in prices might be that there seems to be several expansions taking place from internal growth or from cows being moved from one farm to another.
The November Livestock Slaughter Report showed dairy cattle slaughter for the month below October and below November 2024. Dairy cattle slaughter totaled 229,700 head, down 13,200 head from October and down 21,200 head from November 2022. These numbers do not seem to be reflective of the decrease in cow numbers in the milk production report. It does show that farms are retaining cattle or cattle are moving to other facilities rather than being culled.
AVERAGE CLASS III PRICES
| 3 Month: | $15.68 |
| 6 Month: | $16.40 |
| 9 Month: | $17.04 |
| 12 Month: | $17.44 |
CHEESE
Cheese production has increased as more milk has moved to manufacturing as bottlers divert milk from school accounts. Increasing cheese production leaves plants with more product to move to the market as they want to limit inventory growth. Spot milk prices are so far much better than last year with prices ranging from $5 below class with some reports of spot milk still $0.25 above class. Last year at this time, spot milk was running upwards of $10 below class.
BUTTER
Cream availability is increasing with spot load more available. Retail demand is mixed with holiday orders filled. Food service demand has remained steady to stronger. Many plants are working on producing bulk butter contracts for the first quarter of 2024. The November Cold Storage Report will be released tomorrow and give indication as to stocks in comparison to a year ago. Butter inventory is expected to be about even with a year ago.
OUTSIDE MARKETS SUMMARY
March corn closed up 2.75 cents per bushel at $4.7250, January soybeans closed down 11.00 cents at $12.9725 and March soybean meal closed down $2.30 per ton at $386.40. March Chicago wheat closed up 2.50 cents at $6.1250. February live cattle closed down $1.63 at $168.68. February crude oil is down $0.33 per barrel at $73.89. The Dow Jones Industrial Average is up 332 points at 37,404 with the NASDAQ is up 186 points at 14,964.
