MILK
Farmers desperately need milk prices to move higher, but underlying cash is not cooperating. Supply and demand have moved prices to the levels they are and there is little on the horizon to indicate a definite change anytime soon. The hope last week of stronger prices moving through the first quarter came to an abrupt halt with the weakness of barrels last week was followed by blocks today. The outlook for the foreseeable future is not showing signs of any change in current fundamentals. Most farms are holding cows and trying to obtain the most milk from them as they can to produce cash flow. Heifer prices are high, which makes it attractive for farms to purchase cows from other farms that are exiting the dairy business. That leaves a lighter number of cattle moving to slaughter. Class III milk futures moved higher into last week but have since fallen back near the lows again. Price increases remain short-lived.
AVERAGE CLASS III PRICES
| 3 Month: | $15.69 |
| 6 Month: | $16.58 |
| 9 Month: | $17.14 |
| 12 Month: | $17.44 |
CHEESE
Buyers are taking care of business but are not being very aggressive. Price increases continue to be met with selling as manufacturers want to move product. Their willingness to move product give the indication supply is heavy and limited upside is possible. They are not holding supply for higher price. The desire is to limit the growth of inventory for the time being. This will limit upside potential for a period.
BUTTER
Price has developed a wide sideways range since mid-November. This range is expected to tighten somewhat as time moves forward and should remain higher than it was during the first half of last year. As with cheese, buyers are willing but not interested in chasing the market. Sellers are not holding supply for a potential price increase as they want to limit the build of inventory. Thus, the market remains choppy.
OUTSIDE MARKETS SUMMARY
March corn closed down 3.50 cents per bushel at $4.4350, March soybeans closed up 3.00 cents at $12.2725 and March soybean meal closed up $9.00 per ton at $371.10. March Chicago wheat closed down 14.00 cents at $5.8200. February live cattle closed up $1.75 at $173.13. February crude oil is down $0.75 per barrel at $71.93. The Dow Jones Industrial Average is down 231 points at 37,361 with the NASDAQ is down 28 points at 14,944.
