Friday Closing Dairy Market Update - Cheese Futures Make a New Weekly Low

GENERAL OVERVIEW:

It was a tough week for cheese futures. Thursday's low futures prices brought the lowest prices we've seen since April of 2024. While prices had a small bounce today, the damage had already been done with Thursday's declines. An increased interest in Block Cheese in the cash market could be a sign that the bottom is in.

MILK:

Class III Milk prices fell this week, due to pressure in the cheese market. While specialty product sales have increased, such as eggnog and holiday flavors of milk, have picked up overall, the supply of fluid milk available is abundant, and no relief is in sight for the American dairy farmer. Class III futures settled 2 cents higher today on the December contract and 13 cents lower on the week.

AVERAGE CLASS III PRICES:

3 Month:	$15.87
6 Month:	$16.18
9 Month:	$16.52
12 Month:	$16.75

CHEESE:

For the week, the block cheese price fell 3.00 cents with 45 loads traded. The barrel cheese price remained unchanged at 1.4125 with no loads traded. Continuing the trend of minimal to no loads traded for the fifth week in a row for barrels. Traders seem to have found a bottom in cheese with an increase in activity in blocks today after setting a new low for the year yesterday. The thinking may be that the market has limited downside from here. The dry why price increased 1 cent this week, with 3 loads traded.

BUTTER:

For the week, butter increased 0.50 cents with 8 loads traded. Grade A nonfat dry milk fell 1 cent with 6 loads traded. Butter futures closed the week out 1.975 cents lower, and traders anticipate lackluster trade with no bullish news in sight. Cream supplies are still plentiful heading into winter, with butterfat percentage high.

OUTSIDE MARKETS SUMMARY:

March corn closed down 5.75 cents per bushel at $4.4050, January soybeans closed down 16.75 cents at $10.7675 and January soybean meal closed down $1.40 per ton at $305.60. March Chicago wheat closed down 3.25 cents at $5.2925. February live cattle $0.4250 lower at $229.80. January crude oil is $0.16 per barrel lower at $57.44. The Dow Jones Industrial Average is 229 points lower at 48,474, with the NASDAQ down 401 points at 23,193.

Fluid Milk and Cream - Western U.S. Report 50

California handlers report steady or lighter week over week milk production. Some manufacturers note milk intakes are slightly below anticipated volumes for the first part of the month. December 2025 year over year milk production is up significantly. Some dairy producers note fat components continue to be strong. Stakeholders convey balancing plants continue to run full schedules and homes are being found for spot milk loads. 

Farm level milk output in Arizona and New Mexico is generally steady. 

Pacific Northwest handlers note warmer than typical winter temperatures thus far are contributing to steady milk production. Manufacturers convey milk intakes are at anticipated volumes. Dairy commodity production facilities that started receiving milk deliveries as of this year continue to gear up towards running at full capacities. 

Week over week milk production is mixed in the mountain states of Idaho, Utah, and Colorado. Some stakeholders note tighter spot milk load availability. All Class demands are steady throughout the region. 

Plenty of cream is available to cover demands. Reported cream multiples are lower for week 50. Condensed skim milk demand and availability is steady.

Friday Midday Dairy Market Summary - Block Cheese in Demand

OUTSIDE MARKETS SUMMARY:

CORN:	5 Lower
SOYBEANS:	14 Lower
SOYBEAN MEAL:	$0.02 Lower
LIVE CATTLE:	$0.60 Lower
DOW JONES:	168 Points Lower
NASDAQ:	328 Points Lower
CRUDE OIL:	$0.04 Higher

MIDDAY MARKET UPDATE:

The block cheese price moved slightly above the new low for the year set Thursday, with the 0.5-cent increase in the price closing at $1.35 with an astounding 28 loads traded. The barrel cheese price remained unchanged at $1.4125 with no loads traded. The dry whey price increased 0.5 cents at 76.50 cents with one load traded. Class III futures are 2 to 50 cents higher over the noon hour. The butter price remained unchanged at $1.48 with no loads traded. Grade A nonfat dry milk decreased 0.50 cent, closing at $1.16 with one load traded. Nonfat dry milk is currently trading anywhere from 0.025 cents lower to 0.95 cents higher. Class IV futures have not yet traded for the day. Butter futures are 0.55 cent lower to 0.025 cents higher. Dry whey futures are mixed from 0.275 cents higher to 0.25 cent lower. Cheese futures are 0.2 to 5.4 cents higher.