Wednesday Closing Dairy Market Update - October Milk Production Up 0.2%

MILK

Class III futures closed higher, but those gains will need to be supported by underlying cash or further pressure could surface. USDA released the October Milk Production report today showing an increase in milk production. Production in the top 24 states totaled 18.0 billion pounds, up 0.4% from October 2023. September revised milk production to 0.5% from the previous year, up from a gain of 0.2% as they reported last month. This is the second month of a significantly higher revision. Milk production per cow averaged 2,013 pounds, up 4 pounds from a year ago. Cow numbers increased by 16,000 head from September. The U.S. milk production increased by 0.2% from the previous year totaling 18.7 billion pounds. Production per cow was 3 pounds higher than a year ago. Cow numbers were 19,000 head more than in September and were up 10,000 head than a year ago. The increase in cow numbers is impressive given the tight heifer replacement numbers and the impact of bird flu on dairy farms. This report is not friendly to the market in the long term as this could mean higher milk output.

AVERAGE CLASS III PRICES

3 Month:	$19.32
6 Month:	$19.24
9 Month:	$19.09
12 Month:	$19.04

CHEESE

The block cheese price has increased for four consecutive days which has not been seen for quite some time. This may not mean the trend has changed but it may indicate buyers want to take advantage of the low prices. However, there may be limited upside price potential as buyers are unconcerned over the supply. The bearish implications of the milk production report may solidify their complacency.

BUTTER

Plentiful cream supplies keep churns running on full schedules utilizing as much cream as possible. This leaves sufficient butter available for demand limiting the decrease in inventory. Butter stocks are 11% higher than a year ago according to the September Cold Storage report released last month. USDA will release the October Cold Storage report on Monday. Butter is under pressure with the current price below where it was at the beginning of the year.

OUTSIDE MARKETS SUMMARY

December corn closed up 3.00 cents per bushel at $4.3025, January soybeans closed down 8.00 cents at $9.9050 and December soybean meal closed up $.80 per ton at $289.40. December Chicago wheat closed up 2.75 cents at $5.5250. February live cattle closed down $0.08 at $187.93. January crude oil is down $0.49 per barrel at $68.75. The Dow Jones Industrial Average is up 140 points at 43,408 with the NASDAQ down 21 points at 18,966.

October Milk Production up 0.4 Percent

October Milk Production up 0.4 Percent        

Milk production in the 24 major States during October totaled 18.0 billion pounds, up 0.4 percent from October 2023. September revised production, at 17.5 billion pounds, was up 0.5 percent from September 2023. The September revision represented an increase of 52 million pounds or 0.3 percent from last month's preliminary production estimate.  Production per cow in the 24 major States averaged 2,013 pounds for October, 4 pounds above October 2023.   The number of milk cows on farms in the 24 major States was 8.92 million head, 21,000 head more than October 2023, and 16,000 head more than September 2024.   

October Milk Production in the United States up 0.2 Percent  

Milk production in the United States during October totaled 18.7 billion pounds, up 0.2 percent from October 2023.  Production per cow in the United States averaged 1,996 pounds for October, 3 pounds above October 2023.  The number of milk cows on farms in the United States was 9.37 million head, 10,000 head more than October 2023, and 19,000 head more than September 2024. 

Wednesday Midday Dairy Market Summary - Butter Continues to Slide

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	7 Lower
SOYBEAN MEAL:	$0.90 Higher
LIVE CATTLE:	$0.15 Lower
DOW JONES:	126 Points Lower
NASDAQ:	181 Points Lower
CRUDE OIL:	$0.33 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 0.25 cent closing at $1.7250 with four loads traded. This is the fourth consecutive day of gain. The barrel cheese price increased by 0.50 cent closing at $1.73 with two loads traded. There was an unfilled bid and uncovered offer remaining in each category. The dry whey price remained unchanged at 64 cents with one load traded. Class III futures are 8 to 19 cents higher. The butter price declined 3.25 cents closing at $2.55 with 12 loads traded. This is another new low and the lowest price since Jan. 23. The price is lower than it was at the beginning of the year and at the level it was during the first half of January. Grade A nonfat dry milk remained unchanged at $1.40 with no loads traded. Class IV futures range from 5 cents lower to 5 cents higher. Butter futures are 0.12 -- 2.35 cents lower. Dry whey futures activity has been confined to the January contract at 0.50 cent higher. The USDA will release the October Milk Production report Wednesday afternoon. I estimate milk production to be 0.2% above a year ago with cow numbers up 3,000 head from September. Milk production should have remained strong compared to a year ago.