MILK
The milk market remains bearish with demand as buyers of dairy products are not aggressive. April through July Class III futures contracts made new lows today. There are concerns over milk production and cow numbers moving forward but it is not influencing buyers presently.
Continued lower milk prices may impact milk production as more farms will potentially exit the business. The uncertainty will be how many of those cows will move to other farms. According to the U.S. Census of Agriculture for 2022, 65% of the nation's dairy herd is on dairy operations that contain 1,000-plus cows. However, 80% of the nation's dairy farms have less than 500 cows. This is changing rapidly as some large dairy farms are currently expanding if they have a place to send their milk. The tighter heifer supply is causing more interest and higher prices for milk cows from farms that are discontinuing dairying.
The change of dairy farm numbers and the size of farms will change during this year as farms are facing many challenges due to low prices.
AVERAGE CLASS III PRICES
| 3 Month: | $16.29 |
| 6 Month: | $16.96 |
| 9 Month: | $17.41 |
| 12 Month: | $17.56 |
CHEESE
There will likely be a further weakness of barrels Friday as buyers may have stepped back for now. Sellers were aggressive and wanted to move supply, indicating immediate demand may have been met. The block/barrel spread may move closer before prices settle again. Food service demand is variable with lower restaurant traffic in many areas due to increasing food prices.
BUTTER
The large decline in price today will send buyers to the sideline or bid lower to purchase butter for orders or inventory. The decline moved the price to its lowest since March 1. Price remains in an overall uptrend but may see plenty of volatility on the way.
OUTSIDE MARKETS SUMMARY
May corn closed up 9.25 cents per bushel at $4.3800, May soybeans closed up 18 cents at $11.6625 and May soybean meal closed up $4 per ton at $334.40. May Chicago wheat closed down 2.50 cents at $5.2850. April live cattle closed up $1.48 at $188.73. April crude oil is up $0.33 per barrel at $79.46. The Dow Jones Industrial Average is up 130 points at 38,791 with the NASDAQ up 242 points at 16,273.
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