Thursday Closing Dairy Market Update - Milk Futures Closed Mixed on Price Uncertainty

OVERVIEW:

Traders had little to determine price direction today. Traders are remaining cautious after initially thinking underlying cash was going to increase. Class IV futures show more optimism in later contracts.

MILK:

Milk futures prices may have reached a level of support, but that will be determined by the strength of the underlying cash. They have had a nice rebound, but whether they will hold is another topic of discussion. Milk production reached its low point of the year and has been improving. The milk supply is not overwhelming the market, but it is sufficient for demand. Class III demand is steady as cheese production remains at a strong pace. Class IV demand has slowed, which may impact the upside potential of butter. Spot milk prices in the Central region remain the same as last week, ranging from class to $2.00 above class. Class IV milk futures remain below Class III futures through June 2026. The October and November contracts remain below $16.00.

AVERAGE CLASS III PRICES:

3 Month:	$17.40
6 Month:	$17.25
9 Month:	$17.22
12 Month:	$17.25

CHEESE:

Cheese production is reportedly steady in much of the country. Output will increase over the next weeks as milk production continues to improve. Demand remains steady with inventory in line with a year ago. Spot cheese prices held much of the gains of Wednesday, possibly indicating that prices are low enough to increase the buying interest of end users.

BUTTER:

The butter price is likely to remain in a range near the current level. Buyers had been purchasing butter aggressively throughout the first half of the year, with bulk butter being manufactured and put into storage. Buyers do not need to be as aggressive now due to a sufficient supply already on hand, moving through the second half of the year. This may keep the price suppressed.

OUTSIDE MARKETS SUMMARY:

December corn closed down 3.00 cents per bushel at $4.2375, November soybeans closed down 6.25 cents at $10.3750 and December soybean meal closed down $1.00 per ton at $284.70. December Chicago wheat closed down 4.00 cents at $5.2425. October live cattle closed up $1.28 at $232.38. October crude oil is down $0.40 per barrel at $63.65. The Dow Jones Industrial Average is up 124 points at 46,142, with the NASDAQ up 209 points at 22,471.

Thursday Midday Dairy Market Update - Butter and Block Prices Slip

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	8 Lower
SOYBEAN MEAL:	$1.30 Lower
LIVE CATTLE:	$1.00 Higher
DOW JONES:	175 Points Higher
NASDAQ:	225 Points Higher
CRUDE OIL:	$0.64 Lower

MIDDAY MARKET UPDATE:

The block cheese price slipped 0.25 cent, closing at $1.6825 with no loads traded. The barrel cheese price remained unchanged at $1.64 with no loads traded. Buyers did not show up at the spot market, with only sellers posting offers. There was no follow-through buying from Wednesday. The dry whey price increased 2.00 cents, closing at 63.00 cents with two loads traded. Class III futures are mixed, ranging from 11 cents lower to 7 cents higher. The butter price slipped 0.50 cent, closing at $1.8050 with seven loads traded. There were three unfilled bids and 12 uncovered offers remaining at the close. Grade A milk remained unchanged at $1.1450 with nine loads traded. Class IV futures are 5 lower to 37 cents higher. Butter futures are 1.60 cents lower to 5.00 cents higher. Dry whey futures are 0.65 cent lower to 1.00 cents higher. Cheese futures are 2.00 cents lower to 0.70 cent higher.

Fluid Milk and Cream - Western U.S. Report 38

California week over week milk production varies from steady to stronger. Some processors note September milk intakes are slightly below anticipated volumes. Handlers convey September 2025 year over year milk production is comfortably up. Central Valley manufacturers are running closer to capacity, tightening open processing space. As of September 16, 2025, the California Department of Water Resources reports statewide precipitation total is 1.07 inches below the historical mean for the 2024-25 Water Year. 

Milk production in Arizona and New Mexico remain steady. Churn/processing equipment maintenance is tightening processing capacity. 

In the Pacific Northwest, farm level milk output varies from steady to stronger. Handlers indicate temperatures are lower than seasonal expectations this week. Some manufacturers convey milk intakes are above anticipated volumes. 

Milk production in the mountain states of Idaho, Utah, and Colorado is steady. Handlers note fat components continue to be strong. Stakeholders indicate plenty of milk is available for processing. Class I demand is strong. Class II demand varies from steady to lighter. Stakeholders report demand from ice cream manufacturers is losing some steam. Class III demand varies from steady to strong. Class IV demand is more mixed. 

Cream continues to be widely available in the region. Cream demand is somewhat lighter. Cream multiples had downward movement for the top end of both ranges. The bottom end of the All-Classes range remained at flat market. However, stakeholders indicate below flat market activity for distressed cream loads. No changes in condensed skim milk availability or demand are reported.