MILK:
Class III milk futures lost over 80 cents on the March contract this week, while Class IV lost over $1.40 from this time last week. We have seen a steady downtrend over the last few weeks. The January Milk Production report released on Friday painted a story of why we are trending lower. Even though 2024 was 0.2% lower on production at 226 billion pounds, a reduction of 53 million pounds, the herd size is growing rapidly. We had 54,000 head more milk cows in 2024 than last year, totaling 8.93 million head. What is more telling is the increase of 9,000 more cows just from December to January. The production per cow decreased, most likely due to the new influx of heifers to the herd to 2,054 pounds per cow, down 8 pounds from last year.
For January, we saw an increase in production of 0.2%, totaling 18.3 billion pounds of milk. The December revised production of 18.0 billion pounds was down 0.2% from December 2023. The December revision represented no change from last month's estimate.
AVERAGE CLASS III PRICES:
| 3 Month: | $19.48 |
| 6 Month: | $19.06 |
| 9 Month: | $18.95 |
| 12 Month: | $18.81 |
CHEESE:
For the week, blocks decreased 2 cents with three loads traded. Barrels decreased by 1.75 cents with five loads traded. Dry whey declined 1 cent with no loads traded. This was another new low for the year. The weakness in cheese and dry whey were highlighted by the trend lower for the week in Class III and IV futures as outlined above.
BUTTER:
For the week, butter increased by 3.75 cents with 36 loads traded. Grade A nonfat dry milk declined by 4 cents with only two loads traded. The weakness of nonfat dry milk kept pressure on Class IV futures, trending lower for the week. This is another new low for the year in both Class IV and Grade A nonfat dry milk.
OUTSIDE MARKETS SUMMARY:
March corn closed down 6.75 cents per bushel at $4.9125, March soybeans closed down 6 cents at $1039.50 and March soybean meal closed down $1.20 per ton at $294.80. March Chicago wheat closed up 4.5 cents at $5.90. April live cattle closed up $0.15 at $193.95. March crude oil was down $2.27 per barrel at $70.21. The Dow Jones Industrial Average was down 748 points at 43,428, with the NASDAQ down 438 points at 19,524.
