GENERAL OVERVIEW:
Class III milk began the year on a negative note, with double-digit losses in numerous contracts. Class IV futures fared better with mixed prices despite the decline in butter. The average soybean meal price for November was not released on Friday, leaving the calculation of the income over feed to Monday.
MILK:
The change of the year had no impact on the bearishness of the milk market. A new year does not change things, as it is just a continuation of what was taking place up to that point. Milk production is expected to continue along the path that has been set. Production is expected to remain higher than the previous year as the year progresses. It is uncertain what will take place to change the market direction and provide support to milk prices. Some areas indicated strong demand, but that is not widespread across the country, with overall demand mixed. Time of year is against the potential for a price increase, but unexpected events can take place. Increased dairy product output generally results in increased inventory of dairy products. The November Dairy Products report will be released on Tuesday, showing the level of dairy product production for the month.
AVERAGE CLASS III PRICES:
| 3 Month: | $15.33 |
| 6 Month: | $15.91 |
| 9 Month: | $16.43 |
| 12 Month: | $16.61 |
CHEESE:
For the week, blocks increased 5.50 cents with 37 loads traded. The weekly average price is $1.3738. Barrels remained unchanged with no loads traded. The weekly average price is $1.40. Dry whey decreased 0.50 cent with three loads traded. The weekly average price is 73 cents. Spot milk was available to manufacturers for as much as $9.50 below class during the holiday season. Now that schools are back in session, less milk will be available for manufacturing, but that will not tighten the market significantly. Cheese prices were lower before the holiday season, and that is not expected to change anytime soon.
BUTTER:
For the week, butter decreased 2.75 cents with 23 loads traded. The weekly average price is $1.3956. Grade A nonfat dry milk decreased 0.50 cent with three loads traded. The weekly average price is $1.1738. It was not a good beginning for the new year, as the butter price fell below the low of last year and back to the lowest level since Feb. 11, 2021.
OUTSIDE MARKETS SUMMARY:
March corn closed down 2.75 cents per bushel at $4.3750, March soybeans closed down 1.75 cents at $10.4575 and March soybean meal closed down $3.40 per ton at $296. March Chicago wheat closed down 0.50 cent at $5.0650. February live cattle closed up $4.40 at $236.00. February crude oil is down $0.10 per barrel at $57.32. The Dow Jones Industrial Average is up 319 points at 48,328, with the NASDAQ down 6 points at 23,236.
