Wednesday Closing Dairy Market Update - GDT Trade-weighted Average Increased by 4.8%

MILK

It was another rough day for Class III futures. The weakness of cheese prices put further pressure on futures with contracts posting double-digit losses across the board other than the front-month November contract. It is concerning to see this weakness at this time of year. It increases the concern for milk prices once demand is met through the end of the year. The weather has improved cow comfort but so far has not spurred greater milk production. The Global Dairy Trade auction took place on Tuesday and showed an increase of 4.8% for the trade-weighted average from the previous event. This is the largest increase since the event on August 20.

There were 36,595 metric tons sold at an average price of $3,997 per metric ton. Anhydrous milk fat increased 4.6% to $7,558 per metric ton or $3.43 per pound. Butter jumped 8.3% to $6,990 per metric ton or $3.17 per pound. Buttermilk powder increased 2.1% to $3,238 per metric ton or $1.47 per pound. Cheddar cheese gained 4.0% to 4,973 per metric ton or $2.36 per pound. Lactose fell 6.1% to $843 per metric ton or $0.38 per pound. Skim milk powder increased 4.0% to $2,850 per metric ton or $1.29 per pound. Whole milk powder gained 4.4% to $3,713 per metric ton or $1.68 per pound. Mozzarella increased by 0.9% $4,607 per metric ton or $2.09 per pound.

AVERAGE CLASS III PRICES

3 Month:	$19.41
6 Month:	$19.28
9 Month:	$19.18
12 Month:	$19.16

CHEESE

Cheese demand is reported to be all over the board. Some plants report tight supplies while others indicate demand is seasonally slow. Much of this is variety-specific and depends on the location. Cheese production is active with some looking for more milk and paying as much as $1.25 over class.

BUTTER

The butter price seems comfortable at the current level and may remain that way for the rest of the year. There is no butter shortage due to strong churning activity and higher inventory levels than a year ago. Some end users are making contracts for the first quarter of 2025 to take advantage of the lower price. Butter futures trading has been active throughout much of 2025 as processors and end users are positioning themselves for the long term.

OUTSIDE MARKETS SUMMARY

December corn closed up 7.75 cents per bushel at $4.2625, January soybeans closed up 2.00 cents at $10.0375 and December soybean meal closed down $1.10 per ton at $298.40. December Chicago wheat closed up 0.75 cent at $5.7325. December live cattle closed up $0.63 at $185.40. December crude oil is down $0.10 per barrel at $71.89. The Dow Jones Industrial Average is up 1,508 points at 43,730 with the NASDAQ up 544 points at 18,983.

Wednesday Midday Dairy Market Summary - Cheese Continues to Fall

OUTSIDE MARKETS SUMMARY:

CORN:	8 Higher
SOYBEANS:	1 Higher
SOYBEAN MEAL:	$0.90 Lower
LIVE CATTLE:	$0.60 Higher
DOW JONES:	1,464 Points Higher
NASDAQ:	499 Points Higher
CRUDE OIL:	$0.11 Lower

MIDDAY MARKET UPDATE:

The election is over, and it has had no impact on the cheese market nor was it expected to have any impact. The weakness of cheese continued with buyers holding back and purchasing at lower prices. The longer the duration of lower prices, the less upside potential prices will have as buyers can pick up supply for later demand. The block cheese price declined 4 cents closing at $1.75 with three loads traded. This is the lowest price since April 30. The barrel cheese price declined 2 cents closing at $1.81 with one load traded. The dry whey price remained unchanged at 61.75 cents with no loads traded. Class III futures are 23 cents lower to 1 cent higher. The butter price remained steady at $2.6750 with no loads traded. Nonfat dry milk remained steady at $1.3950 with no loads traded. Class IV futures are unchanged to 23 cents lower with the greatest loss in the January contract. Butter futures are 0.75 cent lower to 0.27 cent higher. Dry whey futures are 0.25 cent lower to 0.15 cent higher.

Wednesday Morning Dairy Market Update - Dairy Markets Continue to Struggle

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Lower
Soybean Futures:	17 to 20 Lower
Soybean Meal Futures:	$4 to $6 Lower
Wheat Futures:	7 to 9 Lower

MILK:

Milk futures do not have much support. Nearby Class III futures have erased all of the gains since mid-July with December Class III futures nearing the $19.00 level. Demand for dairy products has been good but has not increased as anticipated moving toward the end of the year. Even though cheese inventory is below a year ago, milk production has been stronger than expected. Cow numbers have not decreased as anticipated. The impact of bird flu has not been as great as expected. Consumer demand has not improved due to high food prices and not only food prices, but also the cost of durable goods and services. The weakness of prices at this time of year is concerning as this is the higher demand period.

CHEESE:

Cheese buyers continue to hold back in the spot market anticipating further weakness. Manufacturers continue to offer cheese to keep it moving rather than leaving it in inventory and hope for a higher price. Prices should be near a level at which buyers may feel comfortable and will take advantage of the low prices.

BUTTER:

The butter price may be in a precarious position as demand from food service is lighter than usual, and inventory continues to grow relative to a year ago. Retail demand is improving but may not be sufficient to offset the increased production due to heavy cream supplies. This could put further pressure on the butter price over time.