MILK
December milk futures contracts ended trading Wednesday with the trade anticipating a December Class III price of $16.07 and a Class IV price of $19.19, a price spread of $3.12. When looking at futures at the close today, the spread will be wider for January and February if current prices come to fruition. The December Federal Order prices will be announced on Thursday.
The FSA finally released the average soybean meal price for November. That was the missing price needed to calculate income over feed for November. The average soybean meal price for the month was $464.27 per ton. This was an increase of $48.11 from October and was down $27.52 from November 2022. This puts income over feed at $9.58, the highest it has been so far for the year and the highest income over feed price since December 2022.
There will be no payment under the Dairy Margin Coverage program. Even though there has been some challenging weather in the East and Northeast, it is reported that milk output is steady to higher. Overall temperatures have been good for cow comfort. Other areas of the country have also had good weather which has kept milk production strong.
AVERAGE CLASS III PRICES
| 3 Month: | $15.68 |
| 6 Month: | $16.66 |
| 9 Month: | $17.23 |
| 12 Month: | $17.52 |
CHEESE
Traders were correct in their assessment Tuesday that cheese prices will remain choppy and have limited upside potential as prices set back today. The market remains bearish with sufficient cheese supplies to meet current demand. Demand is termed as steady with retail cheddar cheese sales remaining strong. However, demand has not been strong enough to tighten supply. Current spot milk prices range as much as $8 below class. This is a bit better than it was last year at this time but still indicates milk supply is plentiful.
BUTTER
Butter plants are running at or near capacity which may limit the upside price potential as more butter will be available. Inventory has been increasing and running ahead of last year. Demand has been about steady but lower than it had been in the past number of weeks. Some cream is being offered at a discount due to the volume available after the demand from Class II manufacturers has slowed.
OUTSIDE MARKETS SUMMARY
March corn closed up 1.50 cents per bushel at $4.6525, March soybeans closed up 3.50 cents at $12.7700 and March soybean meal closed up $.90 per ton at $380.40. March Chicago wheat closed down 6.50 cents at $6.0025. February live cattle closed down $0.08 at $171.85. February crude oil is up $2.60 per barrel at $72.98. The Dow Jones Industrial Average was down 285 points at 37,430 with the NASDAQ down 174 points at 14,592.
