Monday Morning Dairy Market Update - May Milk Production Report to be Released

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	2 to 3 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	4 to 6 Lower

MILK:

Trading activity took place in all Class III contracts through the end of the year, with prices mixed. Trading volume was light, but it is unusual to see activity spread over multiple months after a three-day weekend. Traders see limited price direction from the spot market. USDA will release the May Milk Production report Monday afternoon. I estimate milk production to be 2.4 percent higher than in May 2025. I estimate cow numbers to increase by 6,000 head from April.

CHEESE:

Cheese prices are expected to be choppy with little direction. Cheese production is strong, and milk is available. This combination provides sufficient cheese to the market, limiting the need for buyers to be concerned about supply.

BUTTER:

Butter futures took a hit last week following the weakness of the spot price. Cream supplies have tightened somewhat, but the supply remains sufficient for demand. Manufacturers continue to offer supplies on the spot market to avoid building inventory.

Thursday Closing Dairy Market Update - The July Class I Price is $21.33

GENERAL OVERVIEW:

Class III ended the short trading week mixed. Class IV futures closed with double-digit gains. The July advanced Class I price declined from June.

MILK:

Milk futures stabilized for the most part, moving into the extended weekend. Underlying spot prices were mixed, providing some support. This does not indicate a change in trend, but a reprieve from the pressure of the week. Strong milk production will keep both bottling and manufacturing supplied. Spot milk prices have been better than usual for this time of year. The reason is that manufacturing capacity has increased over the past year or more, and plants are reaching out to the spot market for milk to utilize the increased capacity and keep plants efficient. This extra plant capacity is expected to be filled in time, but the current capacity is more than the usual number of patrons or suppliers can fill. Spot prices may increase significantly once schools reopen again and milk moves to bottling for school accounts. Maybe this could tighten the supply enough to increase milk prices. The July advanced Class I price is $21.33, down $0.85 from June, but $2.51 higher than July 2025. The markets will be closed on Friday for the Juneteenth federal holiday.

AVERAGE CLASS III PRICES:

3 Month:	$16.32
6 Month:	$16.97
9 Month:	$17.12
12 Month:	$17.15

CHEESE:

For the week, blocks declined 3.75 cents with 63 loads traded. The weekly average price is $1.4631. Barrels increased by 4.00 cents with no loads traded. The weekly average price is $1.4300. Dry whey remained steady at 68.00 cents with one load traded. The weekly average price is 68.31 cents.

BUTTER:

For the week, butter declined 11.75 cents with 51 loads traded. The weekly average price is $1.5838. Grade A nonfat dry milk declined 14.50 cents with 26 loads traded. The weekly average price is $1.6725. The slight bounce in the dry whey price today was the first increase after 11 consecutive days of declines.

OUTSIDE MARKETS SUMMARY:

July corn closed down 3.50 cents per bushel at $4.1750, November soybeans closed down 6.50 cents at $11.4275 and July soybean meal closed down $3.50 per ton at $301.30. September Chicago wheat closed down 7.25 cents at $6.1400. August live cattle closed down $2.23 at $246.63. August crude oil is down $0.16 per barrel at $75.85. The Dow Jones Industrial Average is up 128 points at 51,621, with the NASDAQ up 496 points at 26,518.

Fluid Milk and Cream - Western U.S. Report 25

California milk production is lighter, but stakeholders report decreases are not dramatic. Year-over-year milk production is up. Some manufacturers' milk intakes are above anticipated volumes, partly due to planned downtime at some manufacturing facilities. Spot loads of milk are available. 

Arizona and New Mexico farm level milk output is lighter. 

Pacific Northwest milk production is steady. Some manufacturers are bringing in spot milk loads. 

Week-to-week farm level milk output is mixed in the mountain states of Idaho, Utah, and Colorado. Idaho handlers note cooler than normal temperatures are keeping cow comfort close to ideal, contributing to a strong spring milking season. Manufacturers report milk output is readily meeting production schedule needs. Class I and III demand is steady. Class II and IV demands vary from stronger to lighter. 

Cream spot loads are available. Cream multiples increased at the bottom end of the AllClasses range. Demand is steady. Condensed skim milk availability is mixed. Demand is steady.