Friday Closing Dairy Market Update - September Agricultural Prices Received Index Down 1.7 Percent

GENERAL OVERVIEW:

USDA released the Agricultural Prices monthly report which indexes prices received for commodities as well as the Prices Paid Index, which calculates the costs paid for interest, taxes wages, diesel and feeds. The September Prices Received Index was down 1.7% while the Prices Paid Index was up 0.4%.

MILK:

Class III futures closed the week off, trading 3 to 23 cents lower this afternoon. The November contract fell 23 cents from Monday's settlement. Class IV was up 13 cents on the week while dry whey was nearly unchanged at 0.10 cents higher, and NDM 6.62 cents higher. The September Prices Received Index was 1.7% lower than August but 0.5% higher than September of last year. The Crop Production Index was up 3.7% from last month but up 15% from 2025. Livestock was down 4.4% from August and down 10% from last year. Producers received lower prices for cattle, eggs, hogs, and milk but more for corn. There was decreased monthly movement for cattle, wheat and other products but an increase in movement for corn, soybeans, calves and apples. The September Prices Paid Index was up 0.4% from last month and 5.2% higher than last year. Diesel fuel, complete feed, other services and concentrates were up a higher degree than the amount paid was reduced for lower hay, forages, feeder cattle, feeder pigs and herbicide. Overall, for dairy farms, prices received were lower and prices paid were higher.

AVERAGE CLASS III PRICES:

3 Month:	$16.54
6 Month:	$16.70
9 Month:	$16.88
12 Month:	$17.10

CHEESE:

For the week, the block cheese price decreased by 3.75 cents with 15 loads traded. The weekly average price was $1.7095, down $2.90 from last week. The barrel cheese price closed 0.50 cents higher with no loads traded. The weekly average price was $1.7230, up 1.90 cents from last week. The dry whey price decreased by 0.25 cents with 3 loads traded. The weekly average price is 83.10 cents, down 4.25 cents from last week.

BUTTER:

For the week, the butter price increased by 1.75 cents with 46 loads traded. The weekly average price was $1.3145, down 3.45 cents from last week's average. Grade A nonfat dry milk increased 1.75 cents with 7 loads traded. The weekly average price was $2.0720, down 8.30 cents from last week's average.

OUTSIDE MARKETS SUMMARY:

December live cattle closed down $5.35 at $220.95. December crude oil is up .99 per barrel at $102.99. The Dow Jones Industrial Average is down 572 points at 51,770 and the NASDAQ is down 747 points at 25,43

Friday Midday Dairy Market Summary - Cheese Lower as Cheddar Blocks Fall Sharply

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	6 Higher
SOYBEAN MEAL:	$0.25 Lower
LIVE CATTLE:	$1.125 Lower
DOW JONES:	478 Points Lower
NASDAQ:	802 Point Lower
CRUDE OIL:	$2.71 Higher

MIDDAY MARKET UPDATE:

The block cheese price decreased by 13.75 cents to close at $1.5975 with three loads traded. There were two bids and two offers left at the close. The barrel cheese price was unchanged at $1.7250 with no loads traded. Dry whey increased by 2 cents closing at 84.0 cents with two loads traded. Class III futures are 8 to 29 cents lower. The butter price increased by 3.75 cents, closing at $1.3575 with 11 loads traded. Grade A nonfat dry milk increased 2.5 cents to close at $2.1125 with no loads traded. There were 10 bids and five offers left at the close. Class IV futures have not yet traded Friday. Butter futures are 0.1 to 2.2 cents higher. Dry whey futures are 0.125 to 0.875 cents lower. Cheese futures are 0.6 to 2.3 cents lower. Nonfat dry milk futures are 2.85 to 4.25 cents higher with expanded 8 cent limits Friday.

Fluid Milk and Cream - Western U.S. Report 44

In California, milk production is strong, with some reporting coops are not able to accept all the milk from handlers. Stakeholders note stronger-than-normal spot milk demand this week. According to the National Agricultural Statistics Service (NASS), in September 2026 milk production in California was stable year over year. Federal milk market order data shows producer butterfat tests increasing, rising from an average of 4.21 percent between September 2024 and September 2025 to an average of 4.25 percent between September 2025 and September 2026. 

Farm-level milk output is also stronger in New Mexico and Arizona. Some downtime at a Southwest cheese facility diverted milk to balancing plants this week. In contrast to other regions, September 2026 milk production in Arizona was reported down 4.9 percent year over year, totaling 350 million pounds. Regional contacts report herd sizes are being maintained and expected to remain stable into 2027. 

In the Pacific Northwest, milk production is steady. Additional farms in Washington reported positive Highly Pathogenic Avian Influenza (HPAI) tests in dairy cows. Producers are working closely with veterinary experts and regulatory agencies to ensure effective biosecurity measures to limit further transmission. No impact on overall milk output or availability is reported at this time. The Mountain States report balanced farm-level output. According to the latest NASS report, September 2026 milk production in Idaho increased 3.2 percent from September 2025. Idaho stakeholders indicate handlers plan to add cows and expand facilities in 2027. 

Holiday production is shifting demand across all classes. Class I eggnog demand is growing. Class II demand is increasing with stronger heavy cream and half-and-half sales. Class III production is moving towards cream cheese and Class IV butter demand is showing an uptick over the past week. Cream availability varies by region. Higher cream demand is reported in Arizona where spot supplies are minimal. Cream availability in California continues to improve week over week and Idaho reports plentiful supplies. Cream multiples moved slightly higher at the top of both regional ranges. Demand for condensed skim milk strengthened this week, highlighting limited availability.