MILK:
Class III and Class IV milk futures diverged. Class III futures increased posting double-digit gains in numerous contracts while Class IV futures showed numerous contracts with double-digit losses. Class IV futures remain above Class III, but the spread is narrowing. The June Class IV contract is the only one below $20.00. Milk production for the fourth quarter of 2024 was down 0.1% compared to the fourth quarter of 2023. Milk production for the year was down 0.2%. Cow numbers in the fourth quarter totaled 9,359 million head, up 10,000 head from a year ago. Milk production totaled 55.470 billion pounds, down 59.0 million pounds from a year ago. Dairy cattle slaughter totaled 224,500 head in December. This was an increase of 14,200 head from November, but down just 200 head from December 2023.
AVERAGE CLASS III PRICES:
| 3 Month: | $20.21 |
| 6 Month: | $19.82 |
| 9 Month: | $19.56 |
| 12 Month: | $19.41 |
CHEESE:
Cheese prices increasing with no sellers showing up during spot trading today would suggest prices may move higher on Wednesday. However, increasing prices will bring sellers back into the market to move supply at higher prices. The current level of demand may not allow cheese prices to move much higher unless milk production declines. Demand is generally slower during the first quarter or even the first half of the year. Inventory generally increases during that time. Manufacturers will attempt to limit the building of inventory.
BUTTER:
The butter price falling to the lowest level since Dec. 16, 2024, does not bode well for the price outlook. The price a year ago was trending higher, but that is certainly not the case now. The price is expected to increase at some point, but the current heavy cream supply keeps sufficient butter available for demand.
OUTSIDE MARKETS SUMMARY:
March corn closed up 3.25 cents per bushel at $4.8525, March soybeans closed steady at $10.4500 and March soybean meal closed up $.80 per ton at $301.60. March Chicago wheat closed up 9.75 cents at $5.4525. April live cattle closed up $3.45 at $207.28. March crude oil is up $0.74 per barrel at $73.91. The Dow Jones Industrial Average is up 137 points at 44,850 with the NASDAQ up 392 points at 19,734.
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