GENERAL OVERVIEW:
Class III futures closed lower through the May contract, while later contracts closed higher. Class IV futures closed steady to higher. The Global Dairy Trade auction trade-weighted average declined 4.4%. Congress passed the Whole Milk for Healthy Kids Act, allowing schools to offer whole milk again.
MILK:
It seems as though there is some support under the market, at least for the time being. Some optimism may have come from Congress passing the Whole Milk for Healthy Kids Act. The passage of this act reverses the 2012 restriction on offering whole milk in schools. Statistics showed that school milk consumption decreased when schools were limited to offering only 1% and skim milk for lunch programs. Whole milk and reduced-fat milk were eliminated in 2012 with the intention of reducing childhood obesity. This had no impact on the growing problem of childhood obesity, with research showing that milk fat has a neutral or positive effect on health. This is a huge win for dairy.
The Global Dairy Trade auction trade-weighted average declined 4.4%, and the ninth consecutive decline. Anhydrous milk fat declined 5.2% to $5,602 per metric ton or $2.54 per pound. Butter declined 2.5% to $5,012 or $2.27. Cheddar cheese remained at 0.0% to $4,646 per metric or $2.11 per pound. Lactose jumped 14.4% to $1,430 per metric ton or $0.65 per pound. Skim milk powder declined 2.1% to $2,431 per metric ton or $1.10 per pound. Whole milk powder declined 5.7% to $3,161 per metric ton or $1.43 per pound. Mozzarella gained 6.7% to $3,395 per metric ton or $1.54 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $15.72 |
| 6 Month: | $16.05 |
| 9 Month: | $16.51 |
| 12 Month: | $16.79 |
CHEESE:
Cheese prices held during spot trading, but that does indicate the support has been established. There have been other times when cheese prices remained steady only to decline as aggressive selling resumed. There are sufficient cheese supplies available for buyers, which will limit the potential upside price.
BUTTER:
It was good to see buyers step in aggressively to purchase butter. Holiday demand is good and keeping a floor under the market for the time being. Strong butter production could mean lower prices moving post the holiday season if demand slows.
OUTSIDE MARKETS SUMMARY:
March corn closed up 4.00 cents per bushel at $4.4050, January soybeans closed down 4.50 cents at $10.5825 and January soybean meal closed down $4.20 per ton at $298.20. March Chicago wheat closed down 3.25 cents at $5.0625. February live cattle closed down $1.15 at $229.55. January crude oil is up $0.67 per barrel at $55.94. The Dow Jones Industrial Average is down 228 points at 47,886, with the NASDAQ down 418 points at 22,693.
