Thursday Closing Dairy Market Update - February Exports Remained Strong

GENERAL OVERVIEW:

Class III futures were under pressure in contracts through September. Class IV futures exploded with the minor increase in butter and continued gains in Grade A nonfat dry milk. Dairy exports did well in February.

MILK:

Class III futures in contracts through September were lower in response to the weakness in cheese prices. Class IV futures exploded higher with the May contract reaching $0.79 higher and June $0.80 higher at one time during the day. The Grade A nonfat dry milk price continued to increase to another new high with no indication of price resistance.

Strong international demand continued to drive milk solids equivalent export volume 13% higher compared to February 2025. It was the ninth consecutive month of growth. In the first two months of 2026, export volume increased 12% compared to the first two months of 2025. The value of exports was 11% above February 2025, with year-to date export value up 8% compared to the same period a year ago.

AVERAGE CLASS III PRICES:

3 Month:	$17.24
6 Month:	$17.81
9 Month:	$18.03
12 Month:	$17.93

CHEESE:

The Western region indicates cheese production is steady to increasing. However, manufacturers indicate that cheese inventory is not building to any large extent. Domestic demand is steady to stronger as spring approaches. The Western region indicates milk production may be at its peak of the spring flush, while most of the rest of the country is seeing the early stages of it.

BUTTER:

The increase in the butter price today does not indicate that support has been achieved. The price was likely low enough to generate increased buyer interest, as it makes sense to buy butter at the low price. The Grade A nonfat dry milk price continued higher as buyer interest remains strong. There is no indication of price resistance. The market will find a level of resistance at some point where demand will slow down.

OUTSIDE MARKETS SUMMARY:

May corn closed down 3.25 cents per bushel at $4.4400, May soybeans closed up 3.25 cents at $11.6525, and May soybean meal closed up $3.50 per ton at $317.60. May Chicago wheat closed down 5.75 cents at $5.7450. June live cattle closed up $1.28 at $247.20. May crude oil is up $4.40 per barrel at $98.81. The Dow Jones Industrial Average is up 276 points at 48,186, with the NASDAQ up/down 187 points at 22,822. 

Fluid Milk and Cream - Western U.S. Report 16

California milk production is steady. Handlers report March 2026 milk production is up slightly from the prior month. Year over year milk production for March 2026 is up also. Processors are busily working through milk volumes. Central Valley manufacturers report milk volumes are more manageable and production is running well. 

Arizona farm level milk output is steady. Some manufacturers are bringing in spot milk to fill open processing capacity and run busier production schedules. 

Handlers in New Mexico report peak spring milk production is at hand. 

Pacific Northwest milk production varies from steady to stronger. Some manufacturers are bringing spot milk loads into their production facilities from sellers inside and outside of the Pacific Northwest. 

Farm level milk output in the Mountain States of Idaho, Utah, and Colorado is steady. Spot milk loads are readily available with some manufacturer downtime in the Mountain States. Stakeholders report that peak spring milk output volumes are good. Class I demand is stronger with many educational institution's spring breaks completed. Class II demand varies from lighter to steady. Class III and IV demands are steady. 

Cream loads are available to accommodate demands. Cream demand is steady. Cream multiples are unchanged this week. Condensed skim milk demand and availability is steady, however, some sellers report buyer interest is lower than the previous year due to available quantities of milk solids.

Thursday Midday Dairy Market Summary - Grade A Nonfat Dry Milk Shows No Price Resistance

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$4.00 Higher
LIVE CATTLE:	$0.02 Lower
DOW JONES:	395 Points Higher
NASDAQ:	192 Points Higher
CRUDE OIL:	$1.14 Higher

MIDDAY MARKET UPDATE:

The block price showed further weakness, indicating the weakness on Wednesday was not an aberration. The market sentiment seems to have changed. Blocks showed further weakness today, with the price declining 1.25 cents to close at $1.5525 with one load traded. The barrel cheese price declined 1.75 cents to close at $1.5725 with no loads traded. The dry whey price remained unchanged at 70.00 cents with no loads traded. Class III futures are 15 cents lower to 2 cents higher. The butter price gained 1.00 cents to close at $1.7375 with 27 loads traded. Grade A nonfat dry milk gained 3.50 cents to close at $2.06 with two loads traded. The strength of nonfat dry milk is incredible, with new all-time highs daily. Nonfat dry milk/skim milk powder export in February was 8.0 percent above a year ago. Strong domestic and international demand continues to support the market. Class IV futures are 22-55 cents higher. Butter futures are 0.65 cent lower to 0.72 cent higher. Dry whey futures are 0.55 cent lower to 0.70 cent higher. Cheese futures are 1.60 cents lower to 0.20 cent higher.