Thursday Closing Dairy Market Update - Limited Volatility Results in Light Trading Volume

GENERAL OVERVIEW:

Class III futures were able to post minor gains. This was likely the result of traders making minimal profits due to limited volatility. Trading activity was very light in milk futures.

MILK:

Traders had limited movement to take advantage of. Recent previously established positions were not going to net much profit if the right direction was chosen. This may have partly been the reason for limited volatility, as traders may have decided to hold positions in the hope for a better day on Friday. The inability of underlying cash cheese and butter prices to find a bottom and sustain strength is getting old. Prices generally see strength this time of year as buyers are looking ahead to upcoming holiday demand. The fact that it is not happening now is of grave concern for what prices may do once holiday demand is satisfied. Milk output is not slowing and may not slow in the near term.

AVERAGE CLASS III PRICES:

3 Month:	$16.06
6 Month:	$16.33
9 Month:	$16.63
12 Month:	$16.84

CHEESE:

Milk continues to move around the country to satisfy the demand for fluid milk for school accounts and to find manufacturing capacity. Manufacturing capacity is sufficient as plant expansions have taken place, but milk sometimes needs to move to where extra capacity is located. Cheese exports remain strong but have not been sufficient to tighten the domestic supply. Domestic demand has been steady to higher.

BUTTER:

The Western region reports that butter demand is somewhat weak. Retail sales are weak while demand from the food service industry is steady. International demand remains strong but will not see a strong increase over the high levels of exports in 2025. However, maintaining a strong export pace will be critical for prices over time.

OUTSIDE MARKETS SUMMARY:

December corn closed down 3.75 cents per bushel at $5.3050, November soybeans closed down .75 cent at $13.1975, and December soybean meal closed up $5.70 per ton at $371.30. December Chicago wheat closed down 3.75 cents at $7.2700. December live cattle closed down $3.95 at $216.25. October crude oil is down $1.17 per barrel at $101.26. The Dow Jones Industrial Average is up 316 points at 51,778, with the NASDAQ up 440 points at 26,418.

Fluid Milk and Cream - Western U.S. Report 38

The fluid milk market tone in the West is firm to tight. Milk supply remains generally consistent, with minor declines reported in California and Arizona due to warm temperatures; contacts expect this to be short-lived. Milk availability is also tightening in the West because of increased Class I milk movement to the Midwest and Northeast regions. Contacts report that buyers are offering premium prices, but express concern about how long this will be sustainable given rising freight costs. 

Class I demand is up, with a marked increase week over week. Some contacts also anticipate contractual changes in milk demand due to geopolitical shifts in 2027, which may alter long-term milk-draw needs from the West. Class II demand is steady, with plants kept full for ice cream and cheese production. Class III demand remains stable. Class IV demand is consistent, and contacts report manufacturing facilities are operating at full capacity. 

Cream availability is steady, with loads available across the region. Availability has increased in the Southwest following equipment upgrades, and contacts in the Mountain region report cream is moving out steadily. Condensed skim milk remains tight in the Southwest, while availability in California is reported as adequate and stable with demand. No changes in milk-fat components were reported.

Thursday Midday Dairy Market Summary - Spot Prices Show Limited Movement

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	3 Higher
SOYBEAN MEAL:	$11.30 Higher
LIVE CATTLE:	$2.82 Lower
DOW JONES:	371 Points Higher
NASDAQ:	427 Points Higher
CRUDE OIL:	$0.55 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined one cent to close at $1.3450 with 6 loads traded. The barrel cheese price remained unchanged at $1.4525 with no loads traded. The dry whey price gained a penny to close at 77.25 with no loads traded. Class III futures are mixed, ranging from 10 cents lower to 14 cents higher. The butter price declined a penny to close at $1.3450 with 6 loads traded. There were 3 unfilled bids and 26 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk remained steady at $2.05 with one load traded. So far, there has only been trading activity in the October Class IV contract, with the price 11 cents higher. Butter futures are steady to 1.97 cents lower. Dry whey futures are 1.00 -- 2.00 cents higher. Cheese futures are 0.10 cents higher to 1.20 cents lower. Nonfat dry milk futures are 0.70 cent lower to 1.25 cents higher.