By  E. W. Lang

Recent lower cheese values have prompted Chinese buyers to inquire about new purchases.

Blocks ended the week at $1.72 per lb., down 4 cents for the week, and 17 cents for the month of February. Barrels were even with last Friday at $1.59 and down 9 cents for February. Butter lost three cents this week to close at $1.72 per lb.

February Class III Milk Futures closed at $16.98 per cwt., down three for the week and down 77 cents for the month. September Futures ended the day at $17.07 and that was off 79 cents from a month ago. For the rest of this year Class III Futures average $16.72 and Class IV Futures average $15.96 per cwt.

USDA Dairy Market News reports that milk supplies are 'very available' and cream is 'low cost and very abundant.' Spot milk is generally running $1 to $5 per cwt. under class for homeless tankers of milk, with some at $7 under. Some milk being dumped. Note that the historic spring rush, and subsequent dumping, normally starts later than March 1.

Oh, and total cheese supplies are building at a very high rate, according to recent reports.

Wall Street saw its worst week since 2008 with the S&P 500 back to where it was in early October, a loss of 11% year to date. The crude oil industry suffered $9 per barrel losses this week, with crude now off 28% since January 1. Nearby corn is off 3.8% while soybean meal is off 2.3% for the year. Steers are off 8.8%.

Class III Milk, for reference, ended December, 2019 at $19.37 and looks like it will end February just short of $17 per cwt., a loss of 12.3% for the year. The MilkMilk-Feed Index, however, lost only 5.9% during January and February.

Government subsidies will stop losses on some dairies, particularly during an election year. Some dairies may have bought put options, or forward contracted at the right time and will enjoy market gains going forward.

The song of seven and nine percent loss in the number of U.S. dairy farms over last two years will, however, likely see a reprise as 2020 plays out.