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: | $16.54 |
| 6 Month: | $17.20 |
| 9 Month: | $17.62 |
| 12 Month: | $17.74 |
CHEESE
Block cheese price declined to the lowest level since Feb. 16. All the price gains during the second half of February have been eliminated over the past four days. Price will have difficulty regaining this loss under the current market environment. The barrel price has not declined as much, resulting in the block/barrel spread widening to 13.50 cents. Buyers have been active but only at lower prices.
BUTTER
Butter prices may have found support as buyers stepped up at lower prices to purchase for upcoming Easter demand and to build some inventory for later demand. Manufacturers have been trying to build inventory to provide a cushion while keeping inventory manageable. Cream supplies are plentiful with churns actively using available cream with full production schedules.
OUTSIDE MARKETS SUMMARY
May corn closed down 3.75 cents per bushel at $4.2625, May soybeans closed down 6 cents at $11.4900 and May soybean meal closed down $3.60 per ton at $329.90. May Chicago wheat closed down 13 cents at $5.5100. April live cattle closed up $1.33 at $188. April crude oil is down $0.59 per barrel at $78.15. The Dow Jones Industrial Average is down 405 points at 38,685 with the NASDAQ down 268 points at 15,940.
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