Tuesday Closing Dairy Market Update - February Cheese And Butter Inventories Increased

MILK:

Class III futures were mostly higher with traders remaining cautious. It has been two days of gains in cheese prices, and traders are wary of a price decline. The pattern has been that prices have increased for two or three days and then fall back. Sometimes to new lows, as took place in barrels recently. Milk production is seasonally increasing, adding to the potential for limited upside price potential unless demand keeps up with the increasing milk supply. Spot milk prices are mostly below class with a few reports of slightly higher prices. Time is running out for producers to sign up for the Dairy Margin Coverage program this year. Signup runs through March 31 at the local FSA office.

AVERAGE CLASS III PRICES:

3 Month:	$17.76
6 Month:	$17.79
9 Month:	$18.06
12 Month:	$18.03

CHEESE:

The USDA released the February Cold Storage report today. American cheese inventory increased by 12.1 million pounds from January, totaling 782.9 million pounds. This is 6% below February 2024. Swiss cheese inventory increased 749,000 pounds to a total of 23.7 million pounds and 11% above a year ago. Other cheese inventory totaled 574.2 million pounds, up 11.9 million pounds from January and is 5% below a year ago. Total cheese supply reached 1.3801 billion pounds, up 24.7 million pounds from January and 5% below January 2024. The gains from January were a bit surprising as February had three fewer days.

BUTTER:

Butter inventory in February increased by 44.8 million pounds to a total of 305.5 million pounds. This is a large increase for a month that had three fewer days than January and one less day than February 2024. Inventory is 3% above a year ago and 17% above the previous month. This is likely to keep a lid on the butter price for the foreseeable future.

OUTSIDE MARKETS SUMMARY:

May corn closed down 6.75 cents per bushel at $4.5775, May soybeans closed down 5.50 cents at $10.0175 and May soybean meal closed down $2.50 per ton at $295.10. May Chicago wheat closed down 5.00 cents at $5.4325. June live cattle closed up $0.18 at $202.33. May crude oil is down $0.11 per barrel at $69.00. The Dow Jones Industrial Average is up 4 points at 42,588 with the NASDAQ up 83 points at 18,272.