Thursday Midday Dairy Market Summary - Block and Barrel Cheese Down

Block cheese price was down 2 cents at $1.775 with 5 loads traded. Barrel cheese price was down 1 cent at $1.79 with 10 loads traded. Butter price was down 5.25 cents at $1.74 with 8 loads traded. Grade A nonfat dry milk price was up 1.25 cents at $1.2525 with 2 loads traded. Dry whey price was down 2.25 cents at 66.00 cents with 1 load traded. April Class III futures are unchanged at $17.65. Class IV futures have not yet traded.

Late Wednesday afternoon, the USDA released their March Milk Production reports showing milk production in the 24 major States during March totaled 18.8 billion pounds, up 2.0% from March 2020. February revised production, at 16.9 billion pounds, was down 1.1% from February 2020. However, production was 2.5% above last year after adjusting for the leap year. The February revision represented an increase of 36 million pounds or 0.2% from last month's preliminary production estimate.

Fluid Milk and Cream - Western U.S. Report 16

Milk production in California is approaching spring peak levels. Class I demand is level.     Facing another year of drought, Californians in some areas of the state have been asked to     voluntarily reduce residential water use. Cutbacks to irrigation water throughout the summer     are anticipated, and industry contacts are apprehensive that the cutbacks may be steep for     some farmers. 

Arizona milk output is plentiful. Class I demand is high, and some dairy processors with available capacity are bringing in additional milk from out of state. 

Milk production in New Mexico is steady. Class I demand is level. Some drivers and tankers are being diverted to other industries, which is creating some milk hauling delays within New     Mexico and throughout the Southwest. 

In the Pacific Northwest, component levels are high. Milk output is strong and so is Class I demand. Bottling and other dairy manufacturing operations are active, and overbase programs are also working to manage the abundance of milk. 

Week over week milk production is starting to decrease a little in the mountain states of Idaho, Utah, and Colorado. Class I orders are level. Local requests for condensed skim     spot sales are reported to be limited, although contracts are steady. Tanker availability is     a barrier to moving condensed skim out of the region. 

Cream supply is adequate to abundant in the West. Output is following seasonal patterns, with some areas starting to see slight decreases. However, supply is still meeting demand. Western cream multiples for all classes are steady.

     Western U.S., F.O.B. Cream
     Multiples Range - All Classes:               1.0500 - 1.2800


     Information for the period April 19 - 23, 2021, issued weekly

     Secondary Sourced Information:

     MONTHLY MILK PRODUCTION
The NASS Milk Production report noted March 2021 milk production in the 24 major states was     18.8 billion pounds, 2.0 percent higher than a year ago. Milk cows in the 24 selected     states totaled 8.95 million head, 93,000 head more than a year ago. The following table     shows western states included in the report and the monthly milk production changes compared     to a year ago:

     March 2021 Milk Production, (USDA-NASS)

                   (Million Lb.)   % Change From
                                     1 Year Ago

     Arizona           443            - 3.1
     California      3,732            + 1.5
     Colorado          451            + 4.4
     Idaho           1,392            + 0.8
     New Mexico        721            - 1.1
     Oregon            224            - 0.9
     Utah              187            - 2.6
     Washington        573            - 1.2

Thursday Morning Livestock Market Update - Cold Storage Report Coming Today

OPENING CALLS:

Class III Milk Futures:	Steady to 8 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	5 to 8 Higher
Soybean Futures:	12 to 19 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	5 to 9 Higher

MILK:

One thing is assured, and that is that milk production will continue to remain strong for a few months despite high feed prices. The Livestock Slaughter report will be released Thursday providing information of dairy cattle slaughter for March. However, even if slaughter has increased over the previous year or month, the Milk Production report showed an increase in cow numbers of 8,000 head over February. Production per cow was up 20 pounds and a moderate increase, but there is a strong potential for further increases as we move through spring flush. Most plants indicate they are already running at capacity and are urging patrons to hold the line on milk production. However, strong demand for dairy allows plants to move product quickly to the market, limiting the build of inventory. Rapidly increasing feed prices is a high concern moving into the growing year.

CHEESE:

Cheese prices are not expected to fall apart and trend lower, but they may have reached a level at which supply and demand may be somewhat balanced. There is sufficient cheese available for demand. Cheese plants are running at capacity, but having little difficulty moving product. The slight weakness of blocks and dry whey Wednesday might cause buyers to hold back for a bit.

BUTTER:

The March Cold Storage report will be watched for the amount of increase of butter inventory. Strong demand both domestically and internationally should have limited the growth of stocks. However, churning was active during the month with plentiful cream supplies. Price is expected to chop around at current levels.