Friday Morning Dairy Market Update - Limited Price Volatility Expected

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	2 to 3 Higher
Soybean Meal Futures:	$0.50 to $1 Higher
Wheat Futures:	3 to 5 Higher

MILK:

There is not much to be said about the milk market that has not already been said. Bullish fundamentals are few and far between, leaving traders bearish. Though underlying cash prices show strength, it has limited impact on the market. For quite some time, price increases in the underlying cash market have been short-lived. It will take a monumental effort to change the current market, as it needs to prove that higher prices are warranted. It will take an unexpected event to change the market quickly. Plentiful feed supplies at low prices and continued high prices for calves will keep milk production strong and cow numbers large. The markets will be closed on Monday.

CHEESE:

The upside price potential for cheese is limited as strong output continues. Demand is being met without difficulty. Inventory is higher than a year ago and is expected to increase more rapidly than usual if milk production continues at the current pace. Buying interest in the spot market has been good, but buyers have not had to be aggressive.

BUTTER:

The strong interest in purchasing butter on the spot market has provided support to the price. However, the more butter that is being purchased now and put into storage may mean buyers will not need to be aggressive later. That is the pattern we saw in 2025. That, along with abundant cream supplies, kept production strong and the price lower.

Thursday Closing Dairy Market Update - Exports Increased 7.0% Compared to a Year Ago

GENERAL OVERVIEW:

Class III milk futures began to strengthen as the afternoon progressed, with most contracts moving into positive territory by the close of trading. Dairy exports in October continued at their strong pace.

MILK:

The block cheese price showed strength as the afternoon progressed. Traders determined that the block cheese price rebounding from initial losses provided some support to the market. The barrel cheese price declined slightly, but that was immaterial as barrels are not used in the Federal Order price calculations. However, traders remain cautious, and the increase in blocks did not trigger significant buying interest. Dairy exports in October increased substantially, with exports on a milk solids equivalent basis up 7.0% from October 2024. Year-to-date exports are 2.3% higher than the same period a year ago. The value of exports in October increased 17.0% to $837.1 million. The year-to-date value of exports totaled more than $8.0 billion. President Trump signed the bill to allow whole milk and 2.0% milk back into schools. The law also permits schools to serve nondairy milk that meets the nutritional standards of milk and requires schools to offer a nondairy alternative if kids provide a note from their parents, not just from doctors, saying they have a dietary restriction. This should improve milk consumption, as many did not like having a choice of only 1.0% and skim milk. However, that will not tighten the milk supply anytime soon.

AVERAGE CLASS III PRICES:

3 Month:	$14.92
6 Month:	$15.55
9 Month:	$16.19
12 Month:	$16.51

CHEESE:

Cheese exports in October totaled 55,060 metric tons, up 35.8% from October 2024. Year-to-date exports are 19.0% above the same period last year. Lactose exports totaled 34,825 metric tons, down 9.6% from a year ago. Year-to-date exports are 0.8% lower. Whey exports totaled 41,203 metric tons, up 2.5% from a year ago, with year-to-date exports down 3.0%. Whey protein concentrate +80 exports totaled 6,589 metric tons, down 17.4%. Year-to-date exports are 7.3% above a year ago.

BUTTER:

Butterfat export in October continued at a strong pace with an increase of 132.7% above October 2024, totaling 10,510 metric tons. Year-to-date exports are 147.2% higher than in the same period last year. Nonfat dry milk/skim milk powder exports totaled 61,523 metric tons, up 0.3% from a year ago. Year-to-date exports are down 12.2%. Whole milk powder exports reached 3,197 metric tons, up 120.6% from October 2024, with year-to-date exports up 45.5%.

OUTSIDE MARKETS SUMMARY:

March corn closed down 1.75 cents per bushel at $4.2025, March soybeans closed up 10.50 cents at $10.5300, and March soybean meal closed down $2.70 per ton at $289.20. March Chicago wheat closed down 2.00 cents at $5.1050. February live cattle closed up $0.90 at $236.05. February crude oil is down $2.73 per barrel at $59.29. The Dow Jones Industrial Average is up 293 points at 49,442, with the NASDAQ up 58 points at 23,530.

Fluid Milk and Cream - Western U.S. Report 3

California handlers note mixed week over week milk production. Although year over year milk production is up, some stakeholders convey it is below anticipated volumes. However, open processing time is tight, especially in the Central Valley. Stakeholders indicate plenty of milk is available for production managers. 

Farm level milk output in Arizona is steady. Some manufacturers are bringing in spot milk loads to utilize with open processing time. 

Milk production in New Mexico is steady. Handlers convey milk production is fairly balanced with processing capacities. 

Farm level milk output varies from lighter to steady in the Pacific Northwest. Handlers convey warmer than typical temperatures, adverse winter weather, or heavy rainfall have negatively impacted cow comfort and milk output in some cases. Spot milk load availability is tighter. 

Milk production in the mountain states of Idaho, Utah, and Colorado varies from stronger to steady. Idaho handlers convey warmer temperatures than what is to be expected is increasing cow comfort and milk production in some cases. Stakeholders note spot load availability grew this week for Idaho. Colorado handlers convey milk production is fairly balanced with processing capacities. Demand for all Classes is steady throughout the region. 

Plenty of cream loads are available. Reported cream multiples widened both ranges this week. Condensed skim milk production, availability, and demand are mixed. Some manufacturers are sending condensed skim milk production to the sideline while working through larger milk intake volumes.