GENERAL OVERVIEW:
Most milk futures contracts close lower despite the spot prices suggesting otherwise. The block cheese price moved above the previous high, keeping the overall uptrend intact. The nonfat dry milk price is moving close to the high of 2022.
MILK:
Milk and dairy product movement moved back to normal after the winter storm that caused travel difficulties in numerous states. There has been no indication of milk being dumped, as roads were not impassable for very long, and power outages were minimal in the impact areas. Milk production has been and will continue to increase seasonally as the spring flush begins. The level of the increase in production is uncertain, as milk production has been strong up to this point. The increased milk receipts from farms will increase dairy product production, with most of the extra milk moving to the cheese vat. Spot milk prices strengthened a bit this week, with prices ranging from $3.00 under class to the class price. The Class I price for April is $18.66, up $3.19 from March, but $0.91 below April 2025. The USDA will release the February Milk Production report on Friday. The report is expected to show higher milk output than a year ago. I estimate milk production to be 3.5% higher than in February 2025, with cow numbers unchanged from January.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.92 |
| 6 Month: | $17.57 |
| 9 Month: | $17.85 |
| 12 Month: | $17.76 |
CHEESE:
The block cheese price moved above the previous high, keeping the uptrend intact. Traders were cautious and did not buy into the strength. The focus may turn to the February Milk Production report that will be released at 2 p.m. CDT Friday. Traders are uncertain whether there is much more upside potential remaining for the price. The supply of cheese is sufficient for demand, which may limit the aggressiveness of traders.
BUTTER:
The butter price may have finally found support as the spot price bounced from the low during trading today. The price certainly is low enough that it should generate more aggressive buying interest. Sellers have been aggressive as they moved butter to the market rather than holding onto it.
OUTSIDE MARKETS SUMMARY:
May corn closed up 6.50 cents per bushel at $4.6975, May soybeans closed up 6.75 cents at $11.6850, and May soybean meal closed up $10.80 per ton at $332.50. May Chicago wheat closed up 3.75 cents at $6.0800. April live cattle closed down $2.13 at $233.28. May crude oil is up $0.09 per barrel at $95.55. The Dow Jones Industrial Average is down 204 points at 46,021, with the NASDAQ down 62 points at 22,091.
