Monday Closing Dairy Market Update - Product Production Was Mostly Higher Than a Year Ago

GENERAL OVERVIEW:

Class III futures tried to retain earlier gains but showed slight weakness as the day progressed. Class IV futures showed no trading activity. The August Dairy Products report showed butter and cheese output mostly higher than a year ago.

MILK:

There was little excitement in milk futures today. The underlying cash did not provide much reason for price movement. Class IV futures showed no trading activity. Market fundamentals show little reason for butter and cheese buyers to be concerned over supplies. Milk production is increasing seasonally as cow comfort improves. The current milk price and the income received from calves do not leave room for profitability, if there is any at all. Breeding beef to dairy cows is here to stay and may result in lower milk prices for an extended period of time. Cows may not be culled as aggressively as they have been in the past.

AVERAGE CLASS III PRICES:

3 Month:	$15.53
6 Month:	$16.14
9 Month:	$16.49
12 Month:	$16.78

CHEESE:

American cheese output in August totaled 477 million pounds, down 0.9% from August 2025, according to the Dairy Products report. Italian-type cheese production totaled 541 million pounds, up 3.7% from a year ago. Total type cheese output totaled 1.25 billion pounds, up 1.4% from August 2025. Dry whey output totaled 75.1 million pounds, up 8.2%. Lactose production reached 94.9 million pounds, down 1.3%. Whey protein concentrate output totaled 42.8 million pounds, up 4.6%.

BUTTER:

Butter production in August totaled 187 million pounds, up 6.3% from August 2025. Nonfat dry milk totaled 132 million pounds, up 9.6%. Skim milk powder totaled 28.9 million pounds, down 33.1% from a year ago. Regular ice cream production totaled 64.9 million gallons, down 2.3% from August 2025.

OUTSIDE MARKETS SUMMARY:

December corn closed down 0.50 cent per bushel at $4.9725, November soybeans closed up 2.50 cents at $12.8075, and December soybean meal closed down $.40 per ton at $347.10. December Chicago wheat closed up 9.25 cents at $6.9225. December live cattle closed down $1.50 at $219.98. November crude oil is down $2.06 per barrel at $89.05. The Dow Jones Industrial Average is up 91 points at 51,268, with the NASDAQ up 286 points at 27,477.

Monday Midday Dairy Market Summary - Butter Slides Further

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	6 Higher
SOYBEAN MEAL:	$1.80 Higher
LIVE CATTLE:	$2.00 Lower
DOW JONES:	101 Points Lower
NASDAQ:	184 Points Higher
CRUDE OIL:	$1.21 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 1.00 cent to close at $1.3250 with one load traded. The barrel price remained unchanged at $1.4525 with no loads traded. The dry whey price increased 1.00 cent to close at 83.50 cents with no loads traded. Class III futures are 5-18 cents higher. The butter price decreased 2.50 cents to close at $1.3150 with 24 loads traded. There were 16 unfilled bids with 125 uncovered offers remaining. That is the most uncovered offers ever remaining at the close of spot trading. Grade A nonfat dry milk remained steady at $2.2200 with one load traded. Class IV futures have not yet been traded. Butter futures are steady to 2.40 cents lower. Dry whey futures are 0.50-0.52 cents higher. Cheese futures are 0.30-1.30 cents higher. Nonfat dry milk futures are 0.97 cent lower to 1.00 cent higher. USDA will release the August Dairy Products report this afternoon.

Monday Morning Dairy Market Update - Market Fundamentals Show Little Change

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	9 to 10 Higher
Soybean Meal Futures:	Steady to $1 Lower
Wheat Futures:	8 to 10 Higher

MILK:

Milk futures are expected to follow a similar pattern as they have over the past weeks. There may be limited upside potential for Class III futures, and Class IV futures may remain supported as long as the nonfat dry milk price remains strong. Current market fundamentals indicate there will be little change anytime soon. Low milk prices and reduced calf prices are impacting farm income, but expansions are continuing, and cow numbers are expected to remain high. The August Dairy Products report will be released this afternoon. It will show the output level for dairy products, indicating demand.

CHEESE:

The block cheese price is expected to remain choppy with little upside price potential for the foreseeable future. Cheese production is increasing as milk production improves. Demand is steady but is expected to improve as the holiday season approaches.

BUTTER:

Butter will follow a similar pattern as cheese with limited upside price potential. Churning is active as more cream is becoming available. Retail demand is showing signs of improving, but it remains to be seen whether it will be sufficient to tighten supply and support the price.