Monday Closing Dairy Market Update - January Dairy Export Increase 12%

GENERAL OVERVIEW:

Milk futures were higher due to the strength in block cheese and nonfat dry milk. The April and May Class IV contracts are now above $20.00. January exports increased 12%.

MILK:

Milk futures continued the strength of Friday, supported by higher block cheese and nonfat dry milk prices. Butter has a minor influence, but the real support came from Grade A nonfat, gaining 3.00 cents and moving to the highest price since July 1, 2022. Class IV futures have recovered all of the previous losses, with the April and May contracts above $20.00. Class III futures are expected to continue to chop around in a sideways pattern, moving through the spring flush. January dairy exports on a milk solids basis were 12% higher than January 2025. The value of exports increased by 4.0% to $740 million. There may be some challenges facing dairy exports as the conflict in Iran and elevated fuel prices may impact international demand.

AVERAGE CLASS III PRICES:

3 Month:	$16.82
6 Month:	$17.53
9 Month:	$17.86
12 Month:	$17.77

CHEESE:

January cheese exports totaled 51,688 metric tons, up 10.7% from January 2025. Lactose exports totaled 32,986 metric tons, an increase of 3.6% from a year earlier. Whey exports totaled 45,048 metric tons, up 7.4% from a year ago. Whey protein concentrate +80 exports totaled 5,320 metric tons, down 36.1% from January 2025.

BUTTER:

Butterfat exports totaled 13,776 metric tons, up 94.0% above January 2025. Strong exports are expected to continue as the U.S. price remains attractive to international demand. Nonfat dry milk/skim milk powder exports totaled 55,767 metric tons, up 19.2% from a year ago. Whole milk powder exports were up 161.5% over January, totaling 3, 242 metric tons.

OUTSIDE MARKETS SUMMARY:

May corn closed down 13.25 cents per bushel at $4.5400, May soybeans closed down 70.00 cents at $11.5525 and May soybean meal closed down $10.50 per ton at $312.20. May Chicago wheat closed down 16.50 cents at $5.9725. April live cattle closed up $2.35 at $233.25. April crude oil is down $4.39 per barrel at $94.32. The Dow Jones Industrial Average is up 388 points at 46,946, with the NASDAQ is up 269 points at 22,374.

Monday Midday Dairy Market Summary - Nonfat Dry Milk Moves Higher

OUTSIDE MARKETS SUMMARY:

CORN:	14 Lower
SOYBEANS:	70 Lower
SOYBEAN MEAL:	$10.70 Lower
LIVE CATTLE:	$2.40 Higher
DOW JONES:	379 Points Higher
NASDAQ:	284 Points Higher
CRUDE OIL:	$4.43 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 3.00 cents to close at $1.5600 with one load traded. The barrel cheese price remained unchanged at $1.53 with no loads traded. The dry whey price remained unchanged at 66.00 cents with no loads traded. Class III futures are one cent lower to 19 cents higher. The lower price is only in the March contract, as the trade basically has the market priced. The contract will move very little, mainly adjusting to the weekly AMS prices. The butter price increased 0.25 cent to close at $1.85 with no loads traded. The Grade A nonfat dry milk price increased 3.00 cents to close at $1.7950 with nine loads traded. This has been the highest level since July 1, 2022. Class IV futures are 12-32 cents higher. Butter futures are 0.35-6.77 cents higher. Dry whey futures are 0.25 cent lower to 0.50 cent higher. Cheese futures are steady to 1.60 cents higher.

Monday Morning Dairy Market Update - Mixed Price Activity Due to Uncertainty

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	4 to 5 Lower
Soybean Futures:	15 to 30 Lower
Soybean Meal Futures:	$5 to $7 Lower
Wheat Futures:	7 to 10 Lower

MILK:

Milk futures showed an interesting dynamic in overnight trade. The March and April Class III contracts showed weakness, while the September, October, and November contracts showed strength. Generally, trading is confined to the nearby contracts. The strength in later contracts should not be surprising, as there is the possibility of better milk prices by that time. Seasonally, those are the higher prices of the year. That was not the pattern we saw last year, but there is a good chance it will not be repeated this year. Strong milk production will need increased demand, or the supply will limit upside price potential.

CHEESE:

Cheese prices are expected to remain choppy. Cheese output is increasing, and more milk will be moving to manufacturing as milk receipts increase at the plant level. Milk production is not expected to slow down anytime soon. The current spot prices for milk range from $5.00 below to flat class. This may remain that way moving through the spring flush period.

BUTTER:

The sharp downturn in the butter price last week may increase buyer interest. Demand has improved domestically due to lower prices. Buyers will want to take advantage of the lower price to purchase supplies and freeze them for later use. Ice cream production is beginning to increase. This will increase the demand for cream and reduce the amount available for churning. However, that will not cause concern over a shortage.