MILK
Dairy Market News reports that milk production in the West is increasing with February milk output running above January's level and ahead of last year. At the same time, demand for Classes I, II and III milk is strong with Class IV about steady. Spot milk availability is tight, indicating a good balance of supply and demand. Currently, there is no concern over milk supply for bottling and processing needs.
The brief hope in the market for milk prices to trend higher has dissipated for now with the decline of cheese prices. However, Class IV futures continue to hold well with a large premium over Class III. USDA released its Annual Outlook Forum report reducing grain prices and increasing ending stocks for the 2024-25 crop year. It estimates corn planted acres at 91 million with a yield of 181 bushels per acre. Last year, there were 94.6 million acres and a yield of 177.3 bushels per acre.
Ending stocks estimates are for 2.532 billion bushels with an average price of $4.40 per bushel, 40 cents lower than this year. Soybean planted acres are expected at 87.5 million with a yield of 52.0 bushels per acre. This is compared with 83.6 million this year and a yield of 50.6 bushels per acre. Ending stocks are expected to reach 435 million bushels. The average soybean price is expected to decline by $1.45 to an average of $11.20 per bushel. This is good news for feed prices but bad news if you produced extra grain to sell.
AVERAGE CLASS III PRICES
| 3 Month: | $16.70 |
| 6 Month: | $17.32 |
| 9 Month: | $17.78 |
| 12 Month: | $17.92 |
CHEESE
It is reported that block cheese is in a bearish posture with sufficient supply and slightly slowed demand. This is seasonal but not what we want to see when milk prices are this low. Some plants still indicate difficulty maintaining a full labor force which continues to create some production issues. The inverted block/barrel price spread is unusual at this time of year.
BUTTER
Price is expected to just hang out in the current price vicinity. Churning is active due to plentiful cream supplies. Demand is being met with extra frozen in storage for late demand. Current inventory remains below year-ago levels. Price is not expected to trend higher any time soon.
OUTSIDE MARKETS SUMMARY
March corn closed down 6.50 cents per bushel at $4.1775, March soybeans closed down 8.25 cents at $11.6225 and March soybean meal closed down $3.80 per ton at $339.50. March Chicago wheat closed down 18.50 cents at $5.6700. April live cattle closed up $1.60 at $185.60. March crude oil is up $1.39 per barrel at $78.03. The Dow Jones Industrial Average is up 349 points at 38,773 with the NASDAQ up 47 points at 15,906.
