Monday Morning Dairy Market Update - Milk Futures Find Strength

OPENING CALLS:

Class III Milk Futures:	10 to 20 Higher
Class IV Milk Futures:	5 to 1h Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 3 Lower
Soybean Futures:	1-2 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	5 to 6 Lower

MILK:

Traders supported milk futures overnight with nearby Class III contracts posting double-digit gains. This was a bit surprising due to the release of the February Milk Production report on Friday, which is considered bearish to the market. Milk production was 2.9% higher than a year earlier, with cow numbers up 15,000 head from the previous month. The maket focus might be on the record temperatures being experienced in the western half of the country and how it could impact overall milk output. Crude oil futures fell dramatically early Monday morning as some positive news came out of the discussions with Iran. President Trump delayed military strikes on power plants and energy infrastructure in Iran. However, dairy markets have been little impacted by the movement of crude oil, and this is likely to be the same.

CHEESE:

There is uncertainty as to the strength of cheese prices moving forward. Blocks have had a nice rally, but may see buyer resistance at this level. There is sufficient cheese available in the market, and inventories are building seasonally.

BUTTER:

It seems that butter is finding support at the current level. It may not turn the market to trend higher anytime soon, as manufacturers are maintaining a strong production level and selling butter to limit building inventory at the plant level.

Friday Closing Dairy Market Update - February Milk Output Up 2.9%

GENERAL OVERVIEW:

Milk futures were higher in light trading activity following the increase in spot prices. The USDA released the February Milk Production report showing production up 2.0% from February 2025. Cow numbers jumped by 15,000 head from January.

MILK:

Milk futures were higher in response to the increase in all categories in the spot markets except barrels. Trading volume was light in Class III futures. Traders looked ahead to the February Milk Production report and limited activity. The February report showed production in the top 24 states, up 3.1%, totaling 17.6 billion pounds. January milk production was revised 0.2% higher. Production per cow totaled 1,912 pounds and was 13 pounds higher than a year ago. Cow numbers were 13,000 head more than in January. Milk production in the U.S. was 2.9% above a year ago. Milk production per cow totaled 1,899 pounds, 12 pounds above February 2025. Cow numbers increased by 15.000 head from the previous month. The nation's dairy herd totaled 9.62 million head, 211,000 more than in February 2025. This is a negative report.

AVERAGE CLASS III PRICES:

3 Month:	$17.08
6 Month:	$17.69
9 Month:	$17.97
12 Month:	$17.86

CHEESE:

For the week. blocks jumped 13.25 cents with seven loads traded. The weekly average price is $1.6160. The barrel price increased 4.00 cents with no loads traded. The weekly average price is $1.5560. Dry whey remained unchanged at 66.00 cents with four loads traded. The weekly average price is 65.20 cents. The block price moved to the highest price since Nov. 3, 2025, keeping the uptrend intact.

BUTTER:

For the week, butter declined by 4.75 cents with 70 loads traded. The weekly average price is $1.8185. Grade A nonfat dry milk jumped 10.50 cents with 34 loads traded. The weekly average price is $1.8260. I do not believe the Grade A nonfat dry milk price has ever moved higher than the butter price as it did this week. The price is back to the highest level it has been since June 13, 2022.

OUTSIDE MARKETS SUMMARY:

May corn closed down 4.25 cents per bushel at $4.6550, May soybeans closed down 7.25 cents at $11.6125 and May soybean meal closed down $4.50 per ton at $328.00. May Chicago wheat closed down 12.75 cents at $5.9525. June live cattle closed up $1.73 at $233.43. May crude oil is up $2.26 per barrel at $97.81. The Dow Jones Industrial Average is down 444 points at 45,577, with the NASDAQ down 443 points at 21,648.

February Milk Production in the United States up 2.9 Percent

February Milk Production up 3.1 Percent        

Milk production in the 24 major States during February totaled 17.6 billion pounds, up 3.1 percent from February 2025. January revised production, at 19.1 billion pounds, was up 3.6 percent from January 2025. The January revision represented an increase of 37 million pounds or 0.2 percent from last month's preliminary production estimate.  Production per cow in the 24 major States averaged 1,912 pounds for February, 13 pounds above February 2025.   The number of milk cows on farms in the 24 major States was 9.18 million head, 217,000 head more than February 2025, and 13,000 head more than January 2026.  

February Milk Production in the United States up 2.9 Percent  

Milk production in the United States during February totaled 18.3 billion pounds, up 2.9 percent from February 2025.  Production per cow in the United States averaged 1,899 pounds for February, 12 pounds above February 2025.  The number of milk cows on farms in the United States was 9.62 million head, 211,000 head more than February 2025, and 15,000 head more than January 2026.