Milk production in the 23 major states during November totaled 14.9 billion pounds, up 1.1% from November 2011. Production per cow was 1,758 pounds in November, up 19 pound from November a year ago. There were 8.47 million cows, 3,000 less than November 2011, and 8,000 more than October. Revised October production was revised to down slightly from October 2011, a decrease less than 0.1% from the previous estimate. For milk production in the top 5 producing states, California was down 2.3% from October a year ago; Wisconsin up 4.7%; Idaho up 2.3%; New York up 3.2%; and Pennsylvania up 0.4%. Colorado was up 6.5%; and Kansas up 6.1%. New Mexico was down 4.0%; Texas down 3.7%; Florida down 2.3%; Arizona down 2.0%; Missouri down 1.8%; and Washington down 0.6%. At Smith Grove, Kentucky on December 18, supreme springers sold $1,460 to $1,660, up $15 from a month ago. US #1 springers sold from $1,475 to $1,800, up $150 from a month ago, on the Georgia Dairy Auction on December 10.

The Southeast Uniform milk price for November was $23.47, up $1.12 from October and $1.84 higher than November 2011. November’s Class III price was $20.83, down 19 cents from October, and $1.76 higher than November a year ago. The Class IV price was up 12 cents from October to $18.66, and 79 cents higher than November 2011. Class I utilization was 74.08%, down nearly 1% from October, and 3.88% higher than November a year ago. The butterfat price was $2.0738, down 1 cent from last month and 12 cents higher than November 2011. The November Class I price was $24.50. The December Class I price is $25.19, up 69 cents from November and $2.92 higher than December 2011. The Class I Mover price for December is $21.39, up 69 cents from November. Global dairy product prices have been declining. Milk production in New Zealand for July through September was up 8.5% from a year ago. Production in all the other major dairy regions has been declining. Lower product prices in the U. S. have some analyst’s predicting the December Class III price will be down $2.00 from November. Hay prices are expected to remain higher as the drought lingers in the plains and corn belt. USDA’s cost of production estimate for October was the highest ever. Purchased feed costs have increased 72% over the last ten months. The Class III futures average for 2013 was $18.51, up 6 cents from a month ago. Class III futures are mostly higher than a month ago for 2013 with except for January. Class III milk futures prices on December 19: December $18.65, down 65 cents from a month ago; January 2013 $17.93, down 89 cents; February $18.38, down 7 cents; March $18.69, up 19 cents; April $18.66, down 4 cents; May $18.70, up 19 cents; June $18.72, up 22 cents; July $18.69, up 9 cents; August $18.74, up 24 cents; September $18.72, up 26 cents; October $18.40, up 18 cents; November $18.28, up 18 cents; and December $18.20, up 19 cents. Total cheese production in October was up 3.2% from October a year ago. American cheese production was up 5.1%. NDM/SMP production in October was down 1.4% from a year ago due to lower milk production in the West. Butter production was up 3.4% from September, but near year ago levels. Year-over-year declines in butter production are expected as milk production in the West is expected to continue to decline. American cheese stocks on October 31 were down 6.1% from a year ago. Cheese and butter stocks were expected to decline in October, but the decline was higher than analysts predicted. Butter stocks were down 26% from October but still above year ago levels. NDM/SMP exports for October were down 4.6% from a year ago and 13.4% lower than September. This was the first back-to-back monthly declines since August and September 2009. The U. S. appears to be losing some powder markets in Asia. October cheese exports were up 12.9% from October last year. Cheese exports have now been higher than the prior year for thirteen straight months. October butter exports were up 48% from a year ago, driven by lower prices. Fluid milk sales for the first ten months of 2012 are down 1.7% from the same time period last year. This decline follows a 2.2% drop the previous year. Per capita cheese consumption in the U. S. has increased from 17.5 pounds in 1980 to 33.5 pounds in 2011. October dairy cow slaughter was 285,000 head, 34,000 more than September, and 42,000 more than October 2011. More cows went to slaughter in October than any month in the last ten years. Culling remains high in the western states, but has been down in the Mid-west.

Technically speaking – January futures $17.93 down 89 cents from a month ago. Support at $18.40 and $17.50. Resistance at $19.40 and $20.00. The RSI is 39.89. February futures $18.38 down 7 cents from a month ago. Support at $18.30 and $17.90. Resistance at $18.80 and $19.10. The RSI is 46.33. April futures $18.66 down 4 cents from a month ago. Support at $18.50 and $18.35. Resistance at $18.75 and $19.00. The RSI is 51.04.