MILK:
Interest in purchasing cheese and butter surfaced to begin the week. It is uncertain how much strength the market might have moving through the end of the year. Holiday demand has been met with some buying to increase ownership ahead of the new year. The milk supply is sufficient for demand and not overwhelming the market. More milk will be available for manufacturing through the end of the year as schools close for the Christmas holiday season. Plants will not have difficulty processing the extra milk, but it will move more products to inventory. This may limit the upside price potential for cheese and butter prices. Cheese has had a nice increase recently, improving the outlook for Class III milk prices. Whether these prices will hold through the first quarter of next year is questionable when demand generally diminishes.
AVERAGE CLASS III PRICES:
| 3 Month: | $19.68 |
| 6 Month: | $19.65 |
| 9 Month: | $19.43 |
| 12 Month: | $19.27 |
CHEESE:
The block cheese price has been steady or higher over the past seven consecutive days. Demand for fresh cheese has improved with some buying to replenish aging programs. Buying may have been more aggressive due to the steady increase in prices resulting in more buyers stepping into the market to purchase ahead of further price strength. The cheese inventory is below a year ago, but the supply is sufficient for all areas of demand.
BUTTER:
The increase in the butter price certainly was welcomed, but the bounce is expected to be short-lived with lower prices to unfold before the end of the year. Retail demand has increased but demand for food service remains subdued. Cream supply remains heavier than a year ago with plants having difficulty finding buyers for the extra cream they have available.
OUTSIDE MARKETS SUMMARY:
March corn closed up 3.00 cents per bushel at $4.4500, January soybeans closed down 6.25 cents at $9.8200 and January soybean meal closed up $.70 per ton at $286.90. March Chicago wheat closed down 2.25 cents at $5.5000. February live cattle closed down $2.05 at $189.98. January crude oil is down $0.75 per barrel at $70.54. The Dow Jones Industrial Average is down 111 points at 43,717 with the NASDAQ up 247 points at 20,174.
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