The component values of milk remain higher than a year ago, with some areas reporting record component levels. This has allowed for more cream to be available for manufacturing due to higher butterfat content and increased cheese yields due to higher protein levels. Fluid milk demand is steady to higher. Spot milk in the Central Region is $1.00 to $1.50 above class, indicating a substantially tighter market than a year ago. It is surprising to see that milk production in California is improving from week to week, as reported by Dairy Market News. However, it is running significantly below a year ago, with some reports that the milk supply is tight. Overall milk output in the state continues to be impacted by bird flu and may remain that way for a time. Class III futures followed a similar pattern to Wednesday, with nearby contracts higher and later contracts lower. Futures are trying to find an equilibrium amidst the volatility of cheese prices. Class IV futures were mostly lower as the butter prices eroded.
AVERAGE CLASS III PRICES:| 3 Month: | $20.09 |
| 6 Month: | $19.76 |
| 9 Month: | $19.53 |
| 12 Month: | $19.38 |
The fundamentals of the cheese market are following recent trends indicating the supply of cheese is not tight or overwhelming. Some demand improvement is being seen from pizza supplies as they gear up for the playoffs and the Super Bowl. Other than that, demand is termed as steady. Some areas report that the supply of certain varieties of cheese is tight, while most indicate that supply and demand are balanced.
BUTTER:It was a little surprising that the butter price has fallen to the level it was on December 19, 2024. It was anticipated buyers would have been more aggressive on the weakness, but sufficient butter supply leaves buyers somewhat complacent. The heavy cream supply that was backed up over the holidays has been processed, with the cream supply remaining abundant but not overwhelming.
OUTSIDE MARKETS SUMMARY:March corn closed down 4.25 cents per bushel at $4.7450, March soybeans closed down 23.75 cents at $10.1900 and March soybean meal closed down $7.60 per ton at $294.40. March Chicago wheat closed down 9.50 cents at $5.3750. February live cattle closed down $1.93 at $196.60. February crude oil is down $1.30 per barrel at $78.74. The Dow Jones Industrial Average is down 68 points at 43,153 with the NASDAQ down 173 points at 19,338.
