Monday Midday Dairy Market Summary - Sellers Turn More Aggressive in Butter

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$0.60 Higher
LIVE CATTLE:	$2.32 Lower
DOW JONES:	702 Points Lower
NASDAQ:	245 Points Lower
CRUDE OIL:	$0.13 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 1.75 cents, closing at $1.5150 with six loads traded. The price initially declined 0.25 cent before buying interest took the price higher. The barrel cheese price remained unchanged at $1.49 with no loads traded. The dry whey price decreased 2.50 cents to close at 65.50 cents with no loads traded. Class III futures are mixed, ranging from 6 cents lower to 11 cents higher. Contracts through June are lower, while later contracts are higher in light trading activity. The butter price decreased 5.75 cents, closing at $1.8125 with 18 loads traded. The Grade A nonfat dry milk price decreased 4.00 cents to close at $1.6450 with two loads traded. Class IV futures are steady to 26 cents higher. Butter futures are 0.95 cent lower to 4.00 cents higher and are not reacting to the lower butter and nonfat prices. Dry whey futures are 0.55-2.00 cents lower. Cheese futures are 0.60 cents lower to 1.30 cents higher.

Monday Morning Dairy Market Update - Mixed Futures Price Activity Ahead of Spot Trading

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	6 to 9 Lower
Soybean Meal Futures:	$4 to $5 Lower
Wheat Futures:	3 to 4 Lower

MILK:

The milk production report was released Friday and showed continued strong milk production, production per cow, and higher cow numbers. The addition of 14,000 cows in the country indicates the retention of cows continues. With the recent increase in milk futures pointing to the potential for higher milk prices, the desire to hold onto cows will continue. Not only the potential for higher milk production, but also the continued high prices for calves. The USDA will release the January Monthly Cold Storage report on Tuesday, providing a good picture of demand for the month.

CHEESE:

Traders will be cautious due to the weakness of the block cheese price on Friday. This may indicate buyers have reached a threshold. If they are unwilling to bid higher to purchase cheese, sellers may become more aggressive as they want to sell at the highest price possible. This could push the price lower again.

BUTTER:

It is uncertain how much potential the market has after the substantial gains of last week. The government has indicated it will purchase $75 million of butter for food banks. This seems to have spurred the recent buying in the spot butter market. This purchase may now be factored in with limited upside potential from here.  

Friday Closing Dairy Market Update - January Milk Production Was Up 3.2%

GENERAL OVERVIEW:

Class III futures were lower but rebounded somewhat from the lows. Class IV futures retained their strength. January milk production was 3.2% above January 2025.

MILK:

Milk futures diverged with Class III futures lower following the block cheese and dry whey price weakness. Class IV futures showed substantial gains following the strength of butter and nonfat dry milk. It will be interesting to see where we go from here next week. The January Milk Production report was released on Friday and showed milk production in the top 24 states up 3.4%. Milk production per cow averaged 2,082 pounds, up 24 pounds from a year ago. Cow numbers increased by 15,000 head from December and up 200,000 head from January 2025. U.S milk production was 3.2% above January 2025, with milk per cow totaling 2,068 pounds, up 24 pounds above a year ago. Cow numbers increased by 14,000 head from December. U.S. cow numbers totaled 9.580 million head, up 189,000 from a year ago. Annual milk production was 2.6% higher than in 2024. Production per cow averaged 24,390 pounds, 218 pounds higher than in 2024. The annual average number of cows was 9.05 million head, up 153,000 head from 2024. There were four of the top 24 states that showed lower milk production in January. Washington was down 6.1%; New Mexico declined 3.8%; Pennsylvania declined 3.0%; and Illinois declined 1.4%. Kansas showed the largest gain of 26.1%, with South Dakota up 10.9%.

AVERAGE CLASS III PRICES:

3 Month:	$16.28
6 Month:	$17.06
9 Month:	$17.40
12 Month:	$17.45

CHEESE:

For the week, blocks increased 11 cents with 14 loads traded. The weekly average price is $1.4894. Barrels increased 5 cents with one load traded. The weekly average price is $1.4700. Dry whey decreased by 4 cents with no loads traded. The weekly average price is 72.50 cents. USDA will release the January Cold Storage report on Tuesday.

BUTTER:

For the week, butter increased 16.50 cents with 38 loads traded. This is the highest price since Sept. 11, 2025. The weekly average price is $1.7650. Grade A nonfat dry milk increased 8.50 cents with 10 loads traded. The weekly average price is $1.6238.

OUTSIDE MARKETS SUMMARY:

March corn closed up 1.75 cents per bushel at $4.2750, March soybeans closed down 3.50 cents at $11.3750, and March soybean meal closed up $5 per ton at $309.80. May Chicago wheat closed up 13.50 cents at $5.8025. April live cattle closed down $1.43 at $242.00. April crude oil is up $0.08 per barrel at $66.48. The Dow Jones Industrial Average is up 231 points at 49,626, with the NASDAQ up 203 points at 22,886.