Milk Markets Dive as Milk Production Increases 3% Over 2019
December, 17 2020
Thursday’s milk market moved sharply lower. Speculations continue on what is included in the Covid-19 aid bill being negotiated in Washington. We also got the USDA Milk Production report for November. Price has encouraged dairyman to produce milk and we see it in numbers from November. In November, 12,000 cows were added to the herd and October was adjusted 5,000 head higher, for a net increase of 17,000 head to the U.S. dairy herd. Milk production grew 3% over 2019, the largest increase year over year since 2014.
Class III milk anticipated these bearish tones all day. December fell 14 to $15.63, January fell 49 to $15.64, and February fell 67 cents to $16.53/cwt. The balance of 2021 was 4-36 cents lower.
Class IV saw small gains in a few months. Dec and January held unchanged at $13.42, and $13.91. February gained 7 cents to $14.32/cwt.
The CME spot trade was mixed though. Butter was unchanged at $1.45 ¼, Cheddar blocks unchanged at $1.65/lb, and Barrels fell 2 ¼ cents to 1.43 1/2/lb. Grade A Non-Fat Dry Milk gained a quarter of a cent to $1.15 ¼, withy Dry Whey falling ¾ of a cent to $0.45 3/4/lb.
Grain markets witnessed our first close for soybeans over $12. January beans finished at $12.01 ¼, Corn at $4.32 ½, and soybean meal sitting at $397.90/ton.