Wednesday Midday Dairy Market Update - Spot Prices Decline

OUTSIDE MARKETS SUMMARY:

CORN:	10 Higher
SOYBEANS:	17 Higher
SOYBEAN MEAL:	$3.70 Higher
LIVE CATTLE:	$0.12 Lower
DOW JONES:	31 Points Lower
NASDAQ:	68 Points Lower
CRUDE OIL:	$0.24 Higher

MIDDAY MARKET UPDATE:

Block cheese price declined a penny closing at $1.90 with one load traded. Barrel cheese price declined 3.75 cents closing at $1.5525 with two loads traded. There were two uncovered offers for blocks remaining at the close Those who came to purchase barrels went home satisfied. Dry whey price declined a penny closing at 44.75 with one load traded. Class III futures are steady to 24 cents lower with March showing the greatest pressure. Butter price fell 7 cents closing at $2.38 taking back what was gained since last week. Grade A nonfat dry milk price slipped 0.25 cent ending at $1.1775 with one load traded. Class IV futures have not yet traded with wide bids and offers posted. Butter futures are 3.50-6.45 cents lower. Dry whey futures have not yet traded. USDA will release the February Federal Order class prices today.

Bipartisan DAIRY PRIDE Act Reintroduced

Senate lawmakers this week reintroduced the DAIRY PRIDE Act of 2023. The bill is titled The Defending Against Imitations and Replacements of Yogurt, milk, and cheese to Promote Regular Intake of Dairy Everyday Act of 2023. The legislation would require non-dairy products made from nuts, seeds, plants, and algae to no longer be mislabeled with dairy terms such as milk, yogurt or cheese. The reintroduction follows last week's Food and Drug Administration proposal allowing nut, oat, soy, and other non-dairy products to use the name "milk." Senate Democrat Tammy Baldwin of Wisconsin says, "The Biden Administration's guidance that allows non-dairy products to use dairy names is just wrong." Current FDA regulations define dairy products as being from dairy animals. However, last week the FDA released draft guidance allowing plant-based products to continue to use dairy terms despite not containing dairy, nor having the nutritional value of dairy products.

Wednesday Morning Dairy Market Update - Traders Wait for Further Cash Direction

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Steady to 5 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	5 to 9 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	2 to 4 Higher

MILK:

Overall, Class III futures continue to struggle with contracts testing the lows or making new lows. The choppiness of underlying cash leaves the market floundering. Strong milk production continues keeping the market well supplied with milk for both bottling and manufacturing. Class IV futures continue to hold a premium over Class III, but that premium has eroded recently as nonfat dry milk price has weakened. The average soybean meal price for January has yet to be released by the FSA. My anticipation is for there to be a payment for those who chose the $9.50 price level for the Dairy Margin Coverage program.

CHEESE:

A wide block/barrel spread continues and is not expected to change anytime soon. Barrels are more available to the market, keeping buyers less aggressive. Blocks are trying to move back up to the price they were a week ago but may have a difficult time achieving that level. Unchanged prices Tuesday did not provide market direction as buyers and sellers never showed up. They may be waiting to see who will be more aggressive.

BUTTER:

Price seems to be supported but expected to have limited upside potential. Active churning leaves sufficient supply available for demand as well as to build inventory. Some buyers are already working on third quarter expected demand. Nonfat dry milk is a different story as sufficient supply keeps buyers satisfied with no need to be aggressive on the spot market. Price could retest the lows 3 cents lower. This is keeping pressure on Class IV futures.