Thursday Closing Dairy Market Update - Cattle Slaughter Increased

GENERAL OVERVIEW:

Milk futures closed higher with Class IV futures again outpacing Class III futures. Cheese and butter prices continue to struggle. Dairy cattle slaughter in July increased from a year ago.

MILK:

The September Class IV price is nearly $3.00 over the Class III price for the same month. The nonfat dry milk price is not finding price resistance, which is providing substantial support to the market. Dairy cattle slaughter in July totaled 227,600, up 19,500 from June. Slaughter in July usually is higher than June. Some of it is due to there being one more day in July, and some of it is due to calendar composition depending on actual days of slaughter. It was 1,800 head higher than July 2025. The higher slaughter level did not impact cow numbers, as the milk production report showed cow numbers did not decline from June. Dairy Farmers of America Inc. topped the list of the 2026 top dairy companies ranked by sales in 2025. Saputo Inc. ranked second. Lactalis USA was third. Nestle North America was number four. The Magnum Ice Cream Co. was ranked number five.

AVERAGE CLASS III PRICES:

3 Month:	$16.62
6 Month:	$16.95
9 Month:	$17.13
12 Month:	$17.27

CHEESE:

There is no shortage of milk for manufacturing. There had been some anticipation that more milk moving to bottling would tighten the market to some extent, but that has not yet happened and likely may not. The reopening of schools has provided an increase in food service demand, but not enough to tighten supply. The block cheese price has declined to the lowest level since July 6.

BUTTER:

The butter price has been unable to find consistent support. Buyers have not had any difficulty finding supplies for immediate needs as well as building inventory for later demand. Sufficient supplies are expected to remain available through the end of the year.

OUTSIDE MARKETS SUMMARY:

December corn closed down 3.00 cents per bushel at $5.3350, November soybeans closed up 2.00 cents at $12.6800, and December soybean meal closed up $1.60 per ton at $340.90. December Chicago wheat closed up 12.50 cents at $7.6075. October live cattle closed up $2.15 at $212.93. October crude oil is up $1.30 per barrel at $83.53. The Dow Jones Industrial Average is up 106 points at 53,569, with the NASDAQ up 411 points at 26,541.

Fluid Milk and Cream - Western U.S. Report 35

Milk volumes continue to recover and improve week over week in the West. Improved weather conditions in California have made milk more available, and contacts report plants are able to secure the volumes they need. 

Arizona and New Mexico remain tight on milk, relying on spot availability from neighboring states to fill gaps. 

Milk volume in the Pacific Northwest and Mountain states is balanced; weather conditions continue to improve, increasing cow comfort. Across the region, contacts report decreases in milk fat components. Class I production is focused on filling school demands. Class II demand is strong, and some manufacturers are taking in spot volumes of milk and cream to maintain busy production schedules. Class III and Class IV demand is steady. 

Cream multiples have increased at the bottom end of both range. Cream spot loads are tighter. Condensed skim milk (CSM) availability continues to be tight in the West. Lower milk fat components following a period of hot weather and poor conditions, along with limited availability, are causing prices to increase week over week for CSM. Demand is improving while some production is becoming more limited, partly due to production facility downtime.   

Thursday Midday Dairy Market Summary - Milk Futures Post Higher Prices

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	3 Higher
SOYBEAN MEAL:	$3.00 Higher
LIVE CATTLE:	$1.75 Higher
DOW JONES:	190 Points Higher
NASDAQ:	384 Points Higher
CRUDE OIL:	$0.96 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 1.50 cents to close at $1.4950 with 13 loads traded. There were two unfilled bids and 13 uncovered offers remaining at the close. The barrel cheese price remained unchanged at $1.5750 with no loads traded. The dry whey price increased 1.00 cent to close at 73.00 cents with no loads traded. Class III futures are steady to 8 cents higher. The butter price declined 0.50 cent to close at $1.4600 with 19 loads traded. There were 11 unfilled bids and 53 uncovered offers remaining at the close of spot trading. The price initially declined to $1.4450 before buying lifted the price off the low. Grade A nonfat dry milk increased 1.75 cents to close at $1.8500. This is the highest price since June 9. Class IV futures are 10--25 cents higher. Butter futures are steady to 4.25 cents lower. Dry whey futures are 0.50 cent lower to 0.80 cent higher. Cheese futures are 0.20 cent lower to 0.80 cent higher. Nonfat dry milk futures are 0.25 cent lower to 4.70 cents higher.