Class III Falls As Production Climbs
The January milk production report was released by the USDA on Wednesday with results in line with what we had seen all year long in 2017. Milk production grew 1.8% year-over-year as 18.45 billion pounds were produced. Milk cows totaled 9.405 million, 46,000 more than January 2017 and 5,000 more than December 2017. Milk cow productivity grew by 25 pounds per month as well.
CME product markets were all higher on Wednesday. Blocks added a half cent while barrels were up a quarter cent. Blocks ended at $1.55 per pound while barrels settled at $1.48 1/2. Butter continued on its hot streak this week, jumping another 5 cents to $2.19 per pound. Grade A nonfat dry milk gained a quarter cent to end at 68 1/2 cents per pound.
Early gains in Class III markets were lost by the product session and prices were sent lower after the milk production report was released. February fell 2 cents to $13.46 while March through May declined 10 to 15 cents. June and July were 3 to 7 cents higher. August onward declined 3 to 9 cents per cwt. Class IV markets were unchanged with only March having any trading activity.