MILK
Class III prices were able to close higher despite the little negativity of the spot market. Blocks showing weakness and barrels not being able to hold the highs resulted in some pressure on the market but not enough to close lower. The market will need to prove itself before prices trend higher. It seems like some factors may provide support as the year progresses, but the current market may remain choppy. Concern over the disease on some farms in Texas and Kansas has been identified and press releases are available. It appears it is not widespread and is under control currently. There is no anticipation of heavy culling of cattle and no threat to the milk supply. Since the news became available, there has been little impact on milk futures or the underlying cash prices. Milk futures have reacted more to the perception of milk production or cold storage reports than the news of the disease.
February dairy cattle slaughter totaled 252,700 head which was an increase of 2,550 head from January, but down 13,800 head from February 2023. Slaughter is not increasing as had been anticipated due to the lower milk prices. Interestingly, this February had one extra day than February 2023, but the slaughter was lower.
AVERAGE CLASS III PRICES
| 3 Month: | $16.21 |
| 6 Month: | $16.96 |
| 9 Month: | $17.52 |
| 12 Month: | $17.67 |
CHEESE
Barrels moved higher during spot trading but could not hold the high and slipped back. Price remained higher but it did add a bit of caution to the market as buyers did not remain aggressive. It appears cheese prices may chop around for a period and the market seems to be balanced with supply and demand. Buyers and sellers will do business as they need. They are not concerned about supply later in the year at this point.
BUTTER
The weakness of butter indicates buyers and sellers are comfortable with the price where it currently is. Business is being done without any fanfare or concern over supply. The increase in inventory in February may have had some influence as buyers held back, but the weakness was likely the result of sellers being more aggressive as they needed to move supply.
OUTSIDE MARKETS SUMMARY
May corn closed down 5.25 cents per bushel at $4.3250, May soybeans closed down 10.25 cents at $11.9900 and May soybean meal closed down $1.90 per ton at $339.80. May Chicago wheat closed down 11.50 cents at $5.4350. June live cattle closed down $3.23 at $178.38. May crude oil is down $0.33 per barrel at $81.62. The Dow Jones Industrial Average is down 31 points at 39,282 with the NASDAQ down 69 points at 16,316.
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