MILK
It was a strong close for milk futures with Class IV futures showing good gains on the large increase in butter price. The March Class IV contract showed the largest gain of $0.50 with all other contracts through December posting double-digit gains. Class III futures were strong but not to the extent of Class IV. Trading activity in Class IV contracts was unusually high with June showing 98 contracts traded. Good volume was seen in all contracts through the end of the year.
USDA released the December Livestock Slaughter report which was bearish to the dairy market. Dairy cattle slaughter totaled 224,700 head for the month. This was down 5,000 head from November and down 41,600 head from December 2022. This is the lowest monthly slaughter since May 2021. This trend likely will continue for a time, even though milk prices are low.
AVERAGE CLASS III PRICES
| 3 Month: | $15.74 |
| 6 Month: | $16.44 |
| 9 Month: | $16 |
| 12 Month: | $17.27 |
CHEESE
Spot milk availability has changed with some spot milk commanding a premium to class this week. Most spot milk is still offered below class. This is different from a year ago when spot milk prices remained $10 below class for nearly the first half of the year.
There is not a huge amount of excess milk available but what is available is sufficient for demand. Cheese production is steady and cheese demand is steady. Prices are expected to remain choppy.
BUTTER
Price has moved to the top end of the price range that has developed since mid-November. It will be interesting to see if underlying cash will push higher after the large increase today. Sellers were not aggressive today. They may stand back to wait and see if buyers will be aggressive again tomorrow.
OUTSIDE MARKETS SUMMARY
March corn closed down .50 cent per bushel at $4.5175, March soybeans closed down 17.25 cents at $12.2300 and March soybean meal closed down $5.10 per ton at $358.20. March Chicago wheat closed up 1.50 cents at $6.1225. April live cattle closed up $2.35 at $180.70. March crude oil is up $2.01 per barrel at $77.10. The Dow Jones Industrial Average is up 243 points at 38,049 with the NASDAQ up 29 points at 15,511.
