MILK:
Milk futures fell significantly for the second consecutive day. The pressure today stemmed from the decline of cheese, butter, and dry whey prices. Traders reacted negatively to President Trump moving forward with implementing tariffs on Mexico and Canada. There is much uncertainty going into the weekend and traders did not like it. A retaliation by Mexico could be a huge deal for dairy if they reciprocate with tariffs on dairy products. Mexico is a large importer of dairy products from the U.S. The Cattle Inventory report showed milk cow numbers on Jan. 1 at 9,349,300 head and milk replacement heifers at 3,914,300 head. The ratio of milk replacements to milk cows is 41.9% and the tightest ratio for January ever recorded. This was not surprising as the heifer supply is tight. The December Agricultural Prices report showed an average corn price of $4.23. An alfalfa hay price of $164 per ton. The average soybean price at $9.79 per bushel. The average premium/supreme hay price at $230 per ton. The All-milk price was $23.30 per cwt.
AVERAGE CLASS III PRICES:
| 3 Month: | $19.89 |
| 6 Month: | $19.46 |
| 9 Month: | $19.26 |
| 12 Month: | $19.14 |
CHEESE:
For the week, blocks increased 4.50 cents with 17 loads traded. The average price for the week is $1.9005. Barrels decreased one cent with 13 loads traded. The average price for the week is $1.8490. Dry whey decreased 5.75 cents with two loads traded. The average price for the week is 67.70 cents. Buyers pulled back on cheese today in fear of the impact the tariffs on Mexico and Canada would have on dairy exports.
BUTTER:
For the week, butter decreased 9.75 cents with 20 loads traded. The average price for the week is $2.4745. Grade A nonfat dry milk slipped 0.25 cent with nine loads traded. The average price for the week is $1.3460. This is the lowest butter price since July 23. Further weakness is possible.
OUTSIDE MARKETS SUMMARY:
March corn closed down 8.25 cents per bushel at $4.8200, March soybeans closed down 2.00 cents at $10.4200 and March soybean meal closed down $3.60 per ton at $301.10. March Chicago wheat closed down 7.00 cents at $5.5950. April live cattle closed up $0.80 at $202.30. March crude oil is up $1.01 per barrel at $73.74. The Dow Jones Industrial Average is down 337 points at 44,545 with the NASDAQ down 54 points at 19,627.
