Milk production is holding well despite some adverse weather taking place in some areas. A few areas report a slight uptick in milk receipts. Component values remain strong, improving butter and cheese output. Milk production may hold steady for a time, continuing to run below the level of a year ago. However, the market is not expected to tighten due to slower demand. Demand is generally slower during this time of year but is currently running below a year ago. Milk futures do not show much price difference over the next year.
AVERAGE CLASS III PRICES:| 3 Month: | $19.83 |
| 6 Month: | $19.36 |
| 9 Month: | $19.20 |
| 12 Month: | $19.01 |
Demand varies for different types of cheese. Italian-type cheese sales are reported to be strong. Cheddar sales are mixed with barrels and cheese curds being weaker than usual for this time of year. Some plants indicate spot milk is hard to find with some plants having to run less production than desired. Some of this is due to many plants having reduced the amount of patron milk and positioning themselves as net buyers. When the milk supply is not as abundant as anticipated, they find themselves short on supply. It will be interesting what will happen when increased processing capacity comes online.
BUTTER:The cream supply is rather burdensome. Dairy Market News reports truckloads of cream are backed up and waiting to go into factories. This will limit the upside price potential for butter with the possibility of making new lows again.
OUTSIDE MARKETS SUMMARY:March corn closed up 6.25 cents per bushel at $4.9025, March soybeans closed down 15.75 cents at $10.2775 and March soybean meal closed down $2.50 per ton at $294.10. March Chicago wheat closed down 2.75 cents at $5.7425. April live cattle closed down $0.28 at $195.73. March crude oil is down $2.10 per barrel at $71.22. The Dow Jones Industrial Average is down 225 points at 44,369 with the NASDAQ up 6 points at 19,650.
