The hope of milk prices turning higher is becoming dimmer by the week. Underlying cheese prices are struggling to find support which so far remains elusive. Butter continues to hold up better leaving Class IV futures at a premium of around $4 over Class III.
Milk remains sufficient for demand even though output is below year ago levels. It is difficult to anticipate when prices will bottom out and turn higher. Milk supply will need to decrease which does not seem to be evident and may not be for a period. Farmers are doing the best they can to produce as much milk as they can and as efficiently as possible to hopefully pay the bills. Cow numbers may not decline significantly as farmers want to keep barns full. We saw this in the October dairy cattle slaughter report. International demand is reduced, and prices are not rising on a consistent basis. Even though U.S. cheese price is significantly below the World price, buying has not increased with lower exports than a year ago.
AVERAGE CLASS III PRICES
| 3 Month: | $15.60 |
| 6 Month: | $16.58 |
| 9 Month: | $17.16 |
| 12 Month: | $17.46 |
CHEESE
For the week, blocks declined 3.50 cents with four loads traded. Barrels increased a penny with 26 loads traded. Dry whey increased 2.75 cents with two loads traded. American cheese production in November totaled 469 million pounds and 0.7% above November 2022. Italian type cheese production totaled 485 million pounds and 0.7% above a year earlier. Total cheese output reached 1.16 billion pounds and was also 0.7% above November 2022. Dry whey output totaled 67.5 million pounds, down 6.4% from a year ago. Lactose production totaled 85.8 million pounds, down 3.1%. Whey protein concentrate production totaled 39.3 million pounds, down 1.%.
BUTTER
For the week, butter declined 9 cents with 11 loads traded. Grade A nonfat dry milk increased 0.25 cent with 19 loads traded. Butter production in November totaled 165 million pounds, 3.7% below November 2022. Nonfat dry milk production totaled 116 million pounds, down 28% from a year ago. Skim milk powder production totaled 57.9 million pounds, up 17.8%. Regular ice cream production totaled 52.1 million gallons, down 3.2%. Low fat ice cream output totaled 27.8 million gallons, down 4.5%.
OUTSIDE MARKETS SUMMARY
March corn closed down 5.75 cents per bushel at $4.6075, March soybeans closed down 11.25 cents at $12.5625 and March soybean meal closed down $6.80 per ton at $369.40. March Chicago wheat closed up 2.50 cents at $6.1600. February live cattle closed down $0.55 at $170.58. February crude oil is up $1.76 per barrel at $73.95. The Dow Jones Industrial Average is up 26 points at 37,466 with the NASDAQ is up 14 points at 14,524.
