MILK:
Class III milk futures declined through the time when the CME settled the market for the day. After the settlement, further selling pressure took place with contracts through the first half of the year falling significantly. The only possibility of this pressure could be that President Trump announced he will decide whether to place 25% tariffs on imports of Mexican and Canadian oil. The reason for this is to curb the flow of migrants and fentanyl into the U.S. The fear is that these countries could retaliate with tariffs of their own. This could impact dairy exports to these countries and further slow demand. They are two of the top trading partners of the U.S. Dairy exports may not be affected but the perception impacts the market. Milk output over the past week is termed as steady in some areas while slowly improving in others. Heifer prices have been increasing as the supply remains tight. The Bi-annual Cattle Inventory report on Friday will show the ratio of milk replacements to milk cows.
AVERAGE CLASS III PRICES:
| 3 Month: | $20.00 |
| 6 Month: | $19.65 |
| 9 Month: | $19.37 |
| 12 Month: | $19.23 |
CHEESE:
The action of the spot cheese market today could either indicate support has developed in the market as buyers are willing to purchase at current levels or the possibility that prices have reached levels at which it is attractive for sellers to offer cheese on the spot market. The current supply of cheese is not tight, but also not overabundant.
BUTTER:
The butter price declining to the lowest level since June 30, 2023, indicates there is sufficient supply of butter available for demand. Manufacturers continue to move supply to the market to limit the building of inventory. Inventory seasonally increases during the first half of the year before demand improves utilizing current production supplemented with inventory. Buyers see no need to be aggressive at the present time.
OUTSIDE MARKETS SUMMARY:
March corn closed down 6.75 cents per bushel at $4.9025, March soybeans closed down 16.50 cents at $10.4400 and March soybean meal closed down $5.10 per ton at $304.70. March Chicago wheat closed up 4.00 cents at $5.6650. April live cattle closed down $3.45 at $201.50. March crude oil is up $0.50 per barrel at $73.12. The Dow Jones Industrial Average is up 169 points at 44,882 with the NASDAQ is up 49 points at 19,682.
