Dairy markets continue to slide, cash cheese barrels fell another 3.75 cents to close at $1.5325 on the Chicago Mercantile Exchange on Tuesday. Blocks held steady but Class III futures fell, the February, March and April contracts are all under $17.00.
Bottom line is there is a lot of milk being produced especially in the Midwest and East and a lot of that milk is going into cheese. Cold storage cheese stocks increased 5 percent in December and with the Super Bowl buying behind us, there are no real “big demand” days coming until summer grilling starts.
The market also pressured from the news last week that while dairy cattle slaughter was up in 2012, the number of dairy cows in the nation did not decrease accordingly meaning a strong influx of replacement heifers brought into the milking line this past year. Dairy Market News reports with feed prices high and milk futures for February through April below $17.00, an increasing number of producers are taking a serious look at the number of cows they have. Some also face the fact their forage supplies are going to run-out in the next couple of months.