Thursday Closing Dairy Market Update - Class IV Futures Close Sharply Higher

GENERAL OVERVIEW:

Despite the weakness in spot cheese prices, the strength in dry whey supported Class III futures, allowing them to close higher. Class IV futures had a very strong day on the surprising strength of butter and nonfat dry milk.

MILK:

It was a positive day, rising out of the recent sea of despair. It is too early to tell whether prices are low enough to generate continued buying interest or if the strong buying interest in butter and nonfat dry milk is a response to immediate needs and prices will settle back once immediate demand is satisfied. Prices certainly are low enough to entice buyers, but it may be too early to generate sustained buying interest. There has been no change fundamentally in the market, with milk production remaining stronger than a year ago. It will be up to demand to increase more than usual over the next few months to maintain current price levels or support higher prices. Some processing facilities are assessing when the best time is to schedule maintenance due to strong milk volumes being received despite milk production being impacted by higher temperatures. USDA will release the June Agricultural Prices report showing most of the prices used in calculating income over feed for the Dairy Margin Coverage program.

AVERAGE CLASS III PRICES:

3 Month:	$16.43
6 Month:	$16.88
9 Month:	$17.06
12 Month:	$17.19

CHEESE:

Retail demand for cheese is steady to strong. However, food service demand is lighter than usual for this time of year. The demand from the food service industry may not increase much due to higher fuel prices and the cost of goods and services. Spot cheese prices may see further weakness before buyers step back up to purchase more aggressively.

BUTTER:

The large increase in the spot butter price today reversed the 9-cent decline seen on Tuesday. The price may have difficulty maintaining the strength if the sellers turn aggressive again. There were a large number of uncovered offers at the close of spot trading today, suggesting the supply of butter is heavy with manufacturers wanting to sell supplies.

OUTSIDE MARKETS SUMMARY:

December corn closed down 3.25 cents per bushel at $4.6850, November soybeans closed down 4.00 cents at $11.8875, and December soybean meal closed down $0.70 per ton at $322.80. September Chicago wheat closed up 2.75 cents at $6.6350. October live cattle closed up $3.48 at $227.45. September crude oil is down $0.49 per barrel at $83.97. The Dow Jones Industrial Average is up 614 points at 52,208, with the NASDAQ up 679 points at 25,122.

Fluid Milk and Cream - Western U.S. Report 31

Milk production in the West region is seasonally low, but several areas note a recent increase in farm milk output after some recent hot weather. The Central Valley of California milk volumes are down in July compared to June of this year, but year over year production is higher than 2025. Some contacts in California are concerned with scheduling downtime for regular maintenance with milk volumes this high. 

Arizona and New Mexico milk production is steady with no noted changes to volumes. 

The Pacific Northwest has no notable changes in milk production. 

The mountain states of Idaho, Utah and Colorado have seasonally steady milk production. 

Cream demand in the region is growing. Cream multiples increased at both ends of the range this week. Contacts indicate multiples could continue to rise if demand doesn't change. Demand for Class I milk is growing in some areas as schools prepare for the fall semester. Class II - IV demand remains unchanged in the region. Butter churns are receiving contracted volumes of cream as Class II facilities are taking the majority of spot cream. Condensed skim milk is readily available in the region.

Thursday Midday Dairy Market Summary - Butter Price Jumps

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	1 Higher
SOYBEAN MEAL:	$0.40 Higher
LIVE CATTLE:	$2.87 Higher
DOW JONES:	557 Points Higher
NASDAQ:	642 Points Higher
CRUDE OIL:	$0.50 Lower

MIDDAY MARKET UPDATE:

The block cheese price slipped 1.25 cents to close at $1.5325 with two loads traded. The barrel cheese price declined $0.50 to close at $1.5475 with one load traded. The dry whey price increased 1.25 cents to close at 68.25 cents with one load traded. This offset the decline of the block cheese price. Class III futures are mixed, ranging from 13 cents lower to 14 cents higher. The July contract is the lowest as the price adjusted to the weekly AMS prices. The butter price jumped 9.00 cents to close at $1.4800 with five loads traded. There were five unfilled bids and 83 uncovered offers. Grade A nonfat dry milk increased 5.25 cents to close at $1.5000 with eight loads traded. Class IV futures are 6-66 cents higher. Butter futures are 0.72 cent lower to 5.95 cents higher. Dry whey futures are steady to 0.35 cent lower. Cheese futures are 0.80 cent lower to 1.20 cents higher. Nonfat dry milk futures are 1.30 -- 4.95 cents higher.