Friday Morning Dairy Market Update - Mixed Trade to Dominate

OPENING CALLS:

Class III Milk Futures:	5 to 10 Higher
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Lower
Soybean Futures:	Mixed
Soybean Meal Futures:	Mixed
Wheat Futures:	1 to 2 Higher

MILK:

There is not much to indicate a significant change in the maket anytime soon. The current fundamentals do not suggest much upside price potential unless there is a change in the current balance of supply and demand. Reduced production of American cheese in April did not support the cheese market, as production was sufficient to meet demand. There is little expectation for milk output to slow anytime soon, leaving it up to demand to determine milk prices.

CHEESE:

The block cheese price was higher on Thursday, but there is little expectation for a change in trend. Sellers will take advantage of a price increase to move more supplies to limit inventory at the plant level. Cheese prices are expected to remain in a range through the summer.

BUTTER:

The butter price declined on Thursday, but should hold most of the gains of the past two weeks. Buyers are purchasing what sellers are offering on the spot market. Demand is good, and buyers are purchasing for immediate needs as well as increasing ownership for later demand. 

Friday Closing Dairy Market Update - American Cheese Output Declined In April

GENERAL OVERVIEW:

Class III futures held up well today from the increase in block cheese. The weakness in dry whey partially offset the strength in cheese, limiting the upside potential. The April Dairy Products report showed American cheese production below that of a year ago.

MILK:

There was not much volatility in milk futures today. Class III futures closed mostly higher while Class IV futures closed lower. Each class reflected the movement of underlying cash. The milk supply has tightened somewhat, resulting in spot milk prices being stronger this week. Spot milk is $1.00 under to $2.00 over class this week. There is sufficient milk available for all categories of production, with most being utilized without difficulty. The milk that has been diverted from bottling to manufacturing has not put pressure on the spot market. The potential for milk prices throughout the rest of the year will be determined by demand.

AVERAGE CLASS III PRICES:

3 Month:	$16.71
6 Month:	$17.43
9 Month:	$17.53
12 Month:	$17.52

CHEESE:

American cheese production in April totaled 490 million pounds, down 1.2 percent from April 2025, according to the Dairy Products report. Italian-type cheese production totaled 556 million pounds, up 4.2 percent from a year ago. Total cheese output totaled 1.27 billion pounds, up 1.7 percent. Dry whey output totaled 76.9 million pounds, up 7.8 percent. Lactose output totaled 92.0 million pounds, down 3.2 percent. Whey protein concentrate production totaled 38.8 million pounds, down 11.0 percent from April 2025.

BUTTER:

Butter production totaled 224 million pounds, up 4.5 percent from April 2025. Nonfat dry milk output totaled 181 million pounds, up 11.4 percent from a year ago. Skim milk powder totaled 35.5 million pounds, up 0.2 percent from a year ago.

OUTSIDE MARKETS SUMMARY:

July corn closed down 7.00 cents per bushel at $4.2450, July soybeans closed down 24.50 cents at $11.2950, and July soybean meal closed down $7.10 per ton at $313.70. July Chicago wheat closed down 5.50 cents at $5.8175. August live cattle closed up $3.68 at $241.53. July crude oil is down $2.98 per barrel at $93.04. The Dow Jones Industrial Average is up 875 points at 51,562, with the NASDAQ down 23 points at 26,831.

Fluid Milk and Cream - Western U.S. Report 23

California milk production is seasonally lightening, but handlers indicate favorable temperatures in the evening are keeping significant declines in milk production at bay. Stakeholders indicate milk production in the state is covering processing capacities and spot loads are available. Arizona processors report week-to-week milk production varies from steady to lighter. Some manufacturers are bringing in spot milk loads. 

Farm level milk output in New Mexico is lighter. 

Pacific Northwest milk production varies from steady to lighter. Manufacturers report spot milk loads are tight in Washington. The latest milk production report from National Agricultural Statistics Service (NASS) shows the milk cow total and milk production for Washington decreased by 7 percent in April 2026 compared to the previous April, while neighboring Oregon and Idaho had year over year increases. 

In the mountain states of Idaho and Utah farm level milk output varies from steady to lighter. Spot milk loads are more readily available with some manufacturers planning downtime during parts of June for maintenance, projects, and/or upgrades. Stakeholders report water volumes are limited for certain uses. In Colorado farm level milk output is decreasing seasonally. Class I demand is seasonally lighter, Class II demand is somewhat stronger, and Class III/IV demand is steady throughout the region. 

Cream availability and demand are steady. Cream multiples increased this week. Condensed milk availability and demand are steady.