Market News

Pretty good week in the dairy markets

Dairy markets closed a little higher on the Chicago Mercantile Exchange on Friday. Cash cheese blocks gained a penny, butter held steady, nonfat dry milk increased 2.25 cents and all of the Class III futures contracts for 2015 gained.

For the week: cash cheese barrels are down a half-cent, blocks are a penny higher, butter is unchanged and nonfat dry milk gained 3.25 cents. The February Class III contract increased 55 cents, March up 62 cents, April added 69 cents and July was unchanged.

The Base Class I price for February milk is $16.24 down $2.34 from the previous month. Base Skim Milk Price for Class I for February is $10.76 down 59 cents from the previous month.

Milk production is steady to slightly higher across the country with plants running at or near capacity. Cheese inventories are trending higher thanks to milk intakes, slim exports and buyers reluctant to pull-the-trigger as they wait to see if prices will go lower.  The December milk production report about as expected: milk production, cow numbers and production per cow were all higher for the month, the quarter and the year.  In fact the December production per cow was a record for December.

HighGround Dairy along with other analysts project milk prices will continue to decline to a bottom in May and then rebound. Expectations are the low milk prices and high cull-cow prices will prompt dairy producers to start reducing herds shortly.

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