GENERAL OVERVIEW:
Milk futures were mostly higher, with gains limited despite the strength in the block cheese price. The January Cold Storage report was neutral for cheese and bullish for butter.
MILK:
Class III futures were mostly higher, but the gains were moderate despite the strength of the spot block cheese price. There is some concern over continued strength in the market. However, buyers remain aggressive, and increasing prices may bring more buyers into the spot market. Phenomenal growth in milk production is taking place in Kansas and South Dakota. The January Milk Production report showed that production in Kansas increased 94 million pounds, up 26.2% from January 2025. Cow numbers increased by 45,000 head, with milk production per cow up 20 pounds from a year ago. South Dakota milk production increased by 46 million pounds, totaling 470 million pounds, up 10.8% from a year ago. The number of milk cows increased by 25,000 head, totaling 240,000 head. Milk production per cow was down 10 pounds. The increase in cow numbers offset the decline in production per cow.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.26 |
| 6 Month: | $17.11 |
| 9 Month: | $17.45 |
| 12 Month: | $17.48 |
CHEESE:
American cheese inventory decreased 1.5 million pounds from December, totaling 792.3 million pounds. This was very close to the same level it was in January 2025. Swiss cheese inventory increased 464,000 pounds, totaling 23.1 million pounds. This was up 2.0% from December and up 1.0% from January 2025. Other cheese inventory totaled 564.8 million pounds, up 3.4 million pounds from December. This was 1.0% higher than in December, but very near the same level as a year ago. Total cheese production reached 1.380 billion pounds, up 2.4 million pounds from December. Inventory was near the same level as it was in January 2025.
BUTTER:
Butter inventory in January totaled 215.4 million pounds. This was an increase of 28.8 million pounds or 15% from December. However, inventory was down 17% from January 2025. This is a bullish report for butter. Even though cream supplies have been abundant and butter output strong, stocks are substantially lower than a year ago.
OUTSIDE MARKETS SUMMARY:
March corn closed up .25 cent per bushel at $4.2775, May soybeans closed up 5.50 cents at $11.5525, and May soybean meal closed up $1.90 per ton at $314.40. May Chicago wheat closed down .50 cent at $5.7325. April live cattle closed down $0.15 at $239.10. April crude oil is down $0.68 per barrel at $65.63. The Dow Jones Industrial Average is up 370 points at 49,175, with the NASDAQ up 236 points at 22,864.
