Friday Morning Dairy Market Update - Cold Storage Report To Be Released Today

OPENING CALLS:

Class III Milk Futures:	10 to 35 Lower
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	1 to 2 Higher
Soybean Meal Futures:	$0.50 to $1.00 Higher
Wheat Futures:	1 to 4 Lower

MILK:

The September Milk Production report was released Thursday afternoon. While milk production was lower than last month, it was still well above September 2025 by 2.7%. We have a greater number of milk cows this year as well as more production per cow. The biggest states for growth were Kansas and South Dakota. The third quarter of 2026 produced 59.5 billion pounds of milk, which is 2.3% more than last year. The drop from September to October was somewhat expected, but it is well overshadowed by the big year-over-year increases we've seen nearly every Milk Production report this year.

CHEESE:

Overnight trade for cheese is weaker, trading 0.3 to 3.7 cents lower. The expectation for trade Friday is neutral given the weight the market is putting on the Cold Storage report set to be released Friday afternoon. If the spot market is any indication, inventories may be feeling pretty tight this month as buyers position themselves ahead of the holiday season.

BUTTER:

Overnight trade has been quiet, much like we expect to see in the day trade Friday. Just like cheese, the Cold Storage report will bring a lot of answers to questions on inventories for butter. The holiday baking season is around the corner and if the market feels overstocked or tight, it can make a big difference in how the futures markets trade. 

Thursday Closing Dairy Market Update - September Milk Production Up 2.7 Percent

GENERAL OVERVIEW:

Milk production in the 24 major States was up 2.7% from September 2025 totaling 18.7 billion pounds. From last month, milk production fell 580 million pounds in the selected 24 States.

MILK:

While milk production was higher than last year, it did decline from last month as expected but the total milk production for the year is trending well above last year's totals. For 3rd quarter, milk production totaled 59,529 million pounds, up 2.3 percent from 2025. The number of milk cows on farms in the 24 major States was 9.30 million head, 162, 000 head more than last year and 24,000 head more than last month. Production per cow was also higher, averaging 2,012 pounds for September, 18 pounds higher than September 2025. USDA also released their Livestock Slaughter report today. For dairy cows, September slaughter totaled 234,800 head, this is up 13,700 head from last month and up 7,600 head from September of 2025. Dairy cows accounted for 10 percent of all cattle slaughtered from January to September under federal inspection. So far this year, the United States has slaughtered 2,021,700 dairy cows through the month of September.

AVERAGE CLASS III PRICES:

3 Month:	$16.73
6 Month:	$16.91
9 Month:	$17.06
12 Month:	$17.24

CHEESE:

Cheddar blocks had a small rebound of 2.25 cents today in the cash trade. It was the only product on the spot market to have a daily change in price. Cheese futures were mixed this afternoon trading anywhere from 0.1 cents lower to 2.6 cents higher. Traders expect the market to be quiet ahead of Friday's Cold Storage report.

BUTTER:

Butter was unchanged in the spot market earlier today with 24 loads traded. There were a lot of buyers and sellers participating in the butter trade today despite the flat price action. Futures were trading lower by last call today, from unchanged to down 1.8 cents. Much like cheese, butter is waiting for the Cold Storage report for more market direction.

OUTSIDE MARKETS SUMMARY:

December corn closed down 2.75 cents per bushel at $4.6050, November soybeans closed up 7.75 cents at $12.5300 and December soybean meal closed down $1.00 per ton at $347.30. December Chicago wheat closed down 3.50 cents at $6.2475.

December live cattle closed steady. December crude oil is up 1.90 per barrel at $99.05. The Dow Jones Industrial Average is up 11 points at 52,867 and the NASDAQ is down 694 points at 26,008.

Fluid Milk and Cream - Western U.S. Report 43

In California, milk production is strengthening, while stakeholders indicate demand for spot milk loads is up this week. Handlers report milk production is bouncing back from higher than typical temperatures during the first week of October. However, some processors indicate October 2026 milk production is down somewhat compared to October 2025. 

Farm level milk output is stronger in Arizona and New Mexico. 

In the Pacific Northwest, milk production varies from steady to stronger. According to the latest milk production report from the National Agricultural Statistics Service, August 2026 milk production for Oregon is up 7.7 percent compared August 2025. 

Seasonal fall conditions have progressed more in the mountain states and farm level milk output is strengthening. Spot loads are available in the mountain states and Idaho stakeholders indicate inquiries have been more frequent. No changes in Class I, II, III, or IV demands are noted this week. 

Cream production is meeting needs and loads are more available for some parts of the region. Cream multiples moved slightly higher at the top of both ranges. Condensed skim milk availability is steady. Demand for condensed skim milk is stronger.