Wednesday Midday Dairy Market Summary - Butter Continues to Fall

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	12 Higher
SOYBEAN MEAL:	$7.00 Higher
LIVE CATTLE:	$2.00 Lower
DOW JONES:	288 Points Lower
NASDAQ:	117 Points Higher
CRUDE OIL:	$1.11 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 1.50 cents to close at $1.3650 with 15 loads traded. The barrel cheese price remained unchanged at $1.40 with no loads traded. The dry whey price decreased 1.50 cents to close at 70.00 cents with one load traded. Traders focused on the increase in blocks rather than the weakness of barrels. Class III futures are 2 cents lower to 21 cents higher. The butter price decreased 3.25 cents, closing at $1.3225 with 18 loads traded. This is the lowest price since Feb. 10, 2021. Grade A nonfat dry milk increased 2.00 cents to close at $1.2175 with four loads traded. Class IV futures have not yet been traded. Butter futures are 1.72 cents lower to 1.00 cents higher. Dry whey futures are 1.00 cents lower to 0.62 cent higher. Cheese futures are 0.10-2.40 cents higher.

Wednesday Morning Dairy Market Update - Spot Prices Expected to Remain Choppy

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	7 to 9 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	2 to 4 Higher

MILK:

Class III futures were able to rebound from prices below $15.00 on Tuesday, but that does not mean a bottom has been established in the market. The bearish attitude in the market will be difficult to overcome as long as milk production remains high and manufacturers want to move supply to the spot market to limit the inventory build-up at the plant level. The Global Dairy Trade auction trade-weighted average showed an increase after nine consecutive lower trading events. However, that is not expected to influence prices anytime soon. The final prices to determine the November income over feed for the Dairy Margin Coverage program have not been released.

CHEESE:

Cheese prices are expected to remain under pressure as manufacturers want to move supplies to the spot market rather than build inventory at the plant level. As long as cheese output remains strong, prices will have limited upside potential.

BUTTER:

The butter price is at the same level as block cheese rather than the substantial premium it has been holding for a few years. Heavy cream supplies will keep the butter price low as churns will continue to operate on a full schedule. More bulk butter is being produced and frozen.

Tuesday Closing Dairy Market Update - November Butter and Cheese Production Increased Significantly

GENERAL OVERVIEW:

Milk futures closed higher in most contracts with traders buying back their previously sold positions. Price changes in the spot market provided little for traders to get excited over. The November Dairy Products report showed significantly higher production than a year ago.

MILK:

Milk futures were higher, but it was not due to a change in the market fundamentals. Traders continue to scalp the market, attempting to make a profit. The substantial decline in futures on Monday was taken advantage of by selling their previously sold positions and buying to make a profit on a rebound is possible. Milk production remains strong and continues to result in a sufficient supply for bottling and manufacturing. This is expected to continue as the first quarter unfolds. Higher milk production has resulted in greater output of dairy products. The increased demand through the last quarter of 2025 was overwhelmed by the volume of milk available. Increased seasonal demand provided little support for prices due to sufficient supply.

AVERAGE CLASS III PRICES:

3 Month:	$15.24
6 Month:	$15.82
9 Month:	$16.37
12 Month:	$16.67

CHEESE:

The November Dairy Products report was released today. American cheese production totaled 474 million pounds, up 5.6% from November 2024. Italian-type cheese production reached 526 million pounds, up 6.8% from a year earlier. Total cheese production was 5.9% higher than in November 2024, totaling 1.22 billion pounds. Dry whey production increased slightly from a year ago at 64.8 million pounds. Lactose was 2.7% higher, totaling 87.2 million pounds. Whey protein concentrate production totaled 41.7 million pounds, up 4.9%.

BUTTER:

Butter production in November totaled 180 million pounds, up 2.2% from November 2024. Nonfat dry milk production totaled 108 million pounds, down 9.8%. Skim milk powder production totaled 40.5 million pounds, down 9.9%.

OUTSIDE MARKETS SUMMARY:

March corn closed down .50 cent per bushel at $4.4400, March soybeans closed down 5.75 cents at $10.5625, and March soybean meal closed down $.40 per ton at $299.50. March Chicago wheat closed down 2.00 cents at $5.1050. February live cattle closed up $0.75 at $236.63. February crude oil is down $1.37 per barrel at $56.95. The Dow Jones Industrial Average is up 485 points at 49,462, with the NASDAQ up 151 points at 23,547.