Friday Closing Dairy Market Update - Production of Dairy Products Remained Strong

MILK:

Class III milk futures showed substantial declines for the week, pressured by the uncertainty of demand due to the sweeping implementation of tariffs. Class III futures suffered losses despite spot cheese prices increasing for the week. Traders did not care what the underlying cash did but were more focused on the impact tariffs might have on demand. It will be difficult for the current bearish attitude to change even during periods of stronger cash prices. Class IV futures were lower but did not suffer the losses of Class III contracts. This was somewhat surprising as both butter and nonfat dry milk spot prices declined. The Dow Jones Industrial Average was under substantial pressure for the second day as a result of the tariffs. It fell 2,231 points today and is down 10% over the past two days. This has rattled the equity and commodity markets, fueling fears of a recession.

AVERAGE CLASS III PRICES:

3 Month:	$16.83
6 Month:	$17.32
9 Month:	$17.53
12 Month:	$17.57

CHEESE:

For the week, blocks increased 0.50 cent with 47 loads traded. The weekly average price is $1.6455. Barrels increased 2.50 cents with 16 loads traded. The weekly average price is $1.6605. Dry whey decreased 1.00 cents with six loads traded. The weekly average price is 49.35 cents. American cheese production was 1.3% below February 2024, totaling 441 million pounds. This is understandable as there was one less day than a year ago. Italian-type cheese production totaled 474 million pounds, down 0.5% from a year ago. Total cheese output reached 1.11 billion pounds, down 2.2% from February 2024. Dry whey production totaled 60.1 million pounds, down 16.7%. Lactose output totaled 83.9 million pounds, down 4.2%. Whey protein concentrate production declined 6.8% to 30.8 million pounds.

BUTTER:

For the week, butter decreased 5.50 cents with 28 loads traded. The weekly average price is $2.3290. Nonfat dry milk decreased 0.50 cent with 12 loads traded. The weekly average price is $1.1665. Butter production was strong in February, totaling 203 million pounds. This was 2.6% above February 2024. Churns were actively producing more butter even though there was one less day in the month, Nonfat dry milk production was 0.3% lower at 147 million pounds. Skim milk powder production totaled 30.8 million pounds, down 15.1%. Ice cream production was 3.0% lower than at 55.6 million pounds.

OUTSIDE MARKETS SUMMARY:

May corn closed up 2.75 cents per bushel at $4.6025, May soybeans closed down 34.50 cents at $9.7700 and May soybean meal closed down $4.90 per ton at $283.10. May Chicago wheat closed down 7.00 cents at $5.2900. June live cattle closed down $6.50 at $198.20. May crude oil is down $4.62 per barrel at $62.33. The Dow Jones Industrial Average is down 2,231 points at 38,315 with the NASDAQ down 963 points at 15,588.

Friday Midday Dairy Market Update - Cheese Prices Rebound From the Lows

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	35 Lower
SOYBEAN MEAL:	$4.30 Lower
LIVE CATTLE:	$5.12 Lower
DOW JONES:	1657 Points Lower
NASDAQ:	805 Points Lower
CRUDE OIL:	$5.11 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased a penny, closing at $1.64 with eight loads traded. The price initially declined 1.50 cents before buying interest moved the price up to close higher. The barrel price closed unchanged at $1.66 with three loads traded. The price initially fell 3 cents before buyers stepped up aggressively. There were two unfilled bids and two uncovered offers for loads of blocks remaining at the close. The dry whey price slipped 0.25 cent, closing at 49 cents with no loads traded. Class III futures are 2 to 18 cents lower. Futures regained some losses shortly after spot trading, but buying interest dried up. The butter price decreased 3.50 cents, closing at $2.2950 with 11 loads traded. This is the lowest it has been since March 20. Nonfat dry milk decreased 1.00 cents, closing at $1.1575 with two loads traded. Class IV futures have only traded in the June contract at 5 cents higher, with that trade taking place early in the day. Butter futures are 4.92 cents lower to 0.55 cent higher. Dry whey futures are steady to 2.80 cents lower. USDA will release the February Dairy Products report Friday afternoon.

Friday Morning Dairy Market Update - Dairy Price Support Remains Elusive

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 5 Lower
Soybean Futures:	15 to 20 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	8 to 10 Lower

MILK:

The pressure on milk futures came not only from the decline in cash prices, but from weakness in the equity markets. The fears of a recession and its impact on dairy demand leave a bearish uncertainty in the market. Even though the tariff news is concerning, milk production continues to increase seasonally. China announced the addition of a 34% tariff on all imported goods from the U.S. This is in addition to the tariffs already in place. This may reduce exports of dairy products to China. They are not a large buyer of dairy products, but any demand reduction is not good. USDA will release the February Dairy Products report Friday afternoon, providing a breakdown of dairy products produced during the month.

CHEESE:

Cheese prices are expected to remain in a range. Cheese production is increasing as more milk is available to manufacturers. Spot milk is being offered as much as $4.50 below class. Prices are expected to weaken as the spring flush continues and more milk becomes available.

BUTTER:

Retail butter demand is improving as consumers purchase supplies for the Easter season. Low prices are increasing buying interest with some consumers purchasing extra supplies and freezing them for later use. Manufacturers are operating at capacity with sufficient supplies available to the market. Sellers continue to offer supply on the spot market despite the low price.