Friday Closing Dairy Market Update - Forward Pricing Program Expired

GENERAL OVERVIEW:

Class III milk futures did not close the week positively. Strength in the block cheese price was met with skepticism. The block cheese price, nonfat dry milk price, and the dry whey price increased for the week.

MILK:

Traders are not convinced the increase in the block cheese price is going to hold for very long. The pattern has been that price increases are short-lived, and it may continue that way. There is sufficient supply to meet demand, and then some, as cheese inventory increased in August. Milk production continues to outpace a year ago and is expected to remain that way despite the outlook for low milk prices. Culling may increase as farms may reduce some of their cow numbers to reduce feed costs depending on the age of the cow and her milk output. At some point, some of the cows that have been kept in the herd will be culled as calf income may no longer be sufficient to offset the low milk prices. Due to the Farm Bill not having been passed by September 30th, the Dairy Forward Pricing Program has expired. Proprietary handlers establishing new forward contracts on or after October 1, 2026, will not be exempt from paying minimum Federal order prices on milk pooled in the order. This may eliminate proprietary milk plants from offering forward contracts to their patrons.

AVERAGE CLASS III PRICES:

3 Month:	$15.49
6 Month:	$16.10
9 Month:	$16.47
12 Month:	$16.74

CHEESE:

For the week, the block cheese price increased by 0.75 cent with 20 loads traded. The weekly average price is $1.2940. The barrel cheese price remained unchanged for the second consecutive week, with no loads traded. The weekly average price is $1.4525. The dry whey price increased by 2.00 cents with 3 loads traded. The weekly average price is 81.40 cents. This is the highest price since February 9, 2022.

BUTTER:

For the week, the butter price decreased by 6.00 cents with 99 loads traded. The weekly average price is $1.3444. Grade A nonfat dry milk increased 5.00 cents with 16 loads traded. The weekly average price is $2.1995. This is the highest price since May 19th.

OUTSIDE MARKETS SUMMARY:

December corn closed down 4.50 cents per bushel at $4.9775, November soybeans closed down 5.75 cents at $12.7825, and December soybean meal closed down $5.80 per ton at $347.50. December Chicago wheat closed up 0.25 cent at $6.8300.

December live cattle closed down $1.70 at $221.48. November crude oil is down $1.63 per barrel at $91.24. The Dow Jones Industrial Average is up 250 points at 51,177, with the NASDAQ up 319 points at 27,191.

Friday Midday Dairy Market Summary - Block Cheese Shows Further Strength

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$7.30 Lower
LIVE CATTLE:	$0.35 Lower
DOW JONES:	213 Points Higher
NASDAQ:	309 Points Higher
CRUDE OIL:	$1.57 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 1.25 cents to close at $1.3150 with 8 loads traded. The barrel cheese price remained unchanged at $1,.34256 with no loads traded. The dry whey price increased 1.00 cent to close at 82.50 with one load traded. Traders did not respond with higher Class III futures prices. Contracts range from 38 cents lower to 5 cents higher, with contracts through February posting losses. The butter price remained unchanged at $1.3400 with no loads traded. There were 10 unfilled bids and 34 uncovered offers remaining. Grade A nonfat dry milk increased 1.50 cents to close at $2.22 with 5 loads traded. This is the highest price since May 19th. Class IV futures are 14 cents lower to 30 cents higher. Butter futures are 0.25 cent lower to 2.47 cents higher. Dry whey futures are 0.30 cent lower to 0.25 cent higher. Cheese futures are 0.10 -- 3.70 cents lower. Nonfat dry milk futures are 0.85 cent lower to 1.45 cents higher. 

Friday Morning Dairy Market Update - Limited Price Movement Expected Ahead of the Weekend

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	5 to 8 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	6 to 7 Lower
Soybean Meal Futures:	$4 to $5 Lower
Wheat Futures:	3 to 4 Higher

MILK:

The strength in Class III milk futures may be short-lived if cheese follows the pattern it has over the past few months. Price strength has been short-lived, and that pattern may not change. There is little reason for cheese and butter buyers to be aggressive. Milk production is sufficient for both bottling and manufacturing demand. Both farm and manufacturing expansions continue to take place. Class IV futures showed trading activity overnight in the October and January contracts. It is unusual to see overnight trading activity in Class IV contracts.

CHEESE:

The block cheese price is expected to see limited upside potential. It is expected to be choppy and remain lower for the foreseeable future. Cheese production is sufficient for demand and maintain inventory. Demand will need to improve, or supplies will increase and keep cheese prices lower.

BUTTER:

Butter will follow the same pattern as cheese due to increasing production and sufficient supplies. Price should be increasing seasonally as buyers look ahead to holiday demand, but the volume of butter available to the market keeps buyer interest satisfied without them having to bid the price higher.