Thursday Closing Dairy Market Update - May Dairy Exports Increase 14.0%

GENERAL OVERVIEW:

Traders had something to get excited over, resulting in milk futures increasing significantly. The strength in cheese and nonfat dry milk triggered strong buying interest. May dairy exports increased 14.0% from a year earlier, with year-to-date exports up 12.6%.

MILK:

Milk futures posted strong gains in response to the strength of cheese and nonfat dry milk. Volume was good in Class III futures but mostly confined to the August and September contracts. The August contract had over 1,000 contracts traded. May dairy exports on a milk solids equivalent basis were 14.0% above May 2025. Year-to-date exports were 12.6% higher. Year-to-date total export value increased 12.0%, totaling $4.32 billion. There had been concern that exports would struggle from the impact on shipping due to the Iran conflict, but that was not the case. Alternate ways were found as demand remained strong.

AVERAGE CLASS III PRICES:

3 Month:	$16.64
6 Month:	$17.21
9 Month:	$17.28
12 Month:	$17.32

CHEESE:

Cheese exports in May totaled 61,409 metric tons, up 18.4% from May 2025. Year-to-date exports are up 23.7%. The greatest increase in exports was seen for South Korea with a gain of 52%, followed by Mexico with a gain of 29%. Lactose exports increased 26.8%, totaling 40,267 metric tons, with year-over-year exports up 4.9%. Whey exports totaled 55,603 metric tons, up 53.2% from a year earlier. Year-to-date exports are up 24.1%. Whey protein concentrate +80 exports totaled 6,608 metric tons, down 9.5%, with year-over-year exports down 20.5%.

BUTTER:

Butterfat exports in May totaled 15,158 metric tons, up 102.5% over May 2025. Year-to-date exports are up 90.7%. Butterfat exports in May nearly doubled that of May 2025. Exports to MENA (Middle East/North Africa) jumped 767% from a year earlier. Nonfat dry milk/skim milk powder export totaled 49,669 metric tons, down 20.0% from a year earlier, with year-to-date exports up 0.3%. Whole milk powder exports totaled 4,179 metric tons, down 13.0%, with year-to-date exports up 29.8% compared to a year ago.

OUTSIDE MARKETS SUMMARY:

December corn closed down 4.25 cents per bushel at $4.5200, November soybeans closed down 10.75 cents at $11.8150, and December soybean meal closed up $4.20 per ton at $315.40. September Chicago wheat closed up 12.00 cents at $6.1975. August live cattle closed down $2.38 at $235.25. August crude oil is down $1.67 per barrel at $71.85. The Dow Jones Industrial Average is up 126 points at 52,487, with the NASDAQ up 336 points at 26,207.

Fluid Milk and Cream - Western U.S. Report 28

California milk production is seasonally decreasing but still supplying the needs of dairy commodity manufacturers. Processors report milk and cream production is high enough to push back any anticipated equipment downtime at their facilities. Stakeholders indicate no changes to spot milk load availability. 

Farm level milk output is lighter in Arizona. Some processing equipment issues are reducing manufacturing capacity, making spot loads of milk more available. 

Farm level milk output is lighter in New Mexico. 

Milk production in the Pacific Northwest is seasonally lighter. Manufacturers report contractual intakes are being received, but spot loads of milk are tight. 

Stakeholders note temperatures are heating up for dairy farms east of the Cascades and triple digits are forecasted for at least parts of Idaho, anticipating a toll on milk production. Utah and Colorado handlers indicate week-to-week milk production varies from steady to lighter. Spot loads of milk are available in the mountain states. 

Class I, II, III, and IV demands are steady. Cream production is meeting contractual commitments and spot load needs. Cream multiples moved lower at the top of both ranges. Cream demand is steady. Condensed skim milk loads are available and demand is steady, but some buyers note transportation availability is tighter.

Thursday Midday Dairy Market Summary - Milk Futures Jump

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	14 Lower
SOYBEAN MEAL:	$4.60 Higher
LIVE CATTLE:	$2.65 Lower
DOW JONES:	190 Points Higher
NASDAQ:	315 Points Higher
CRUDE OIL:	$1.97 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 6.00 cents to close at $1.5650 with 8 loads traded. The barrel cheese price increased 3.00 cents to close at $1.5500 with 3 loads traded. The dry whey price increased 1.25 cents to close at 68.50 cents with no loads traded. This provided a boost to Class III futures with contracts ranging from 5-66 cents higher. The butter price remained unchanged at $1.6500 with 2 loads traded. Grade A nonfat dry milk increased 5.00 cents with 35 loads traded. Buyers came out of the woodwork. There were 16 unfilled bids and 7 uncovered offers remaining at the close. Class IV futures are 12-31 cents higher. Butter futures are 1.50 cents lower to 1.25 cents higher. Dry whey futures are 0.25 -- 0.50 cent higher. Cheese futures are 0.20 -- 5.60 cents higher. Nonfat dry milk futures are 1.75 -- 4.30 cents higher.