Friday Closing Dairy Market Update - Fluid Milk Sales Increased 1.2%

GENERAL OVERVIEW:

Class III futures closed lower for the week, while Class IV futures closed mixed compared to the previous week. The block cheese price declined during the week, while barrels held steady. There has not been a significant change in fundamentals during the week.

MILK:

The volatility in milk futures during the week, at times, had milk futures moving in the opposite direction compared to the movement of spot prices. Those are times during which we scratch our heads, wondering why. Short-term traders like volatility as they have a better chance of making a quick profit from the market, and there was no shortage of that.

The fluid milk sales report for December was released, showing that packaged milk sales were 1.2% higher than in December 2024. Whole milk sales were 4.6% above a year earlier. Flavored whole milk increased 8.2%; reduced-fat milk sales were steady. Low-fat milk declined 4.2%; fat-free skim milk declined 5.5%; flavored fat-reduced milk declined 1.2%; buttermilk increased 0.7%; and other fluid milk sales increased 3.2%. Organic whole milk sales decreased 1.1%; organic flavored whole milk increased 13.0%; organic reduced fat decreased 2.5%; organic low fat decreased 2.5%; organic low fat decreased 19.7%; organic fat-free declined 3.6%; organic flavored fat-reduced increased 18.0%, while other organic fluid milk sales decreased 11.4%. The markets will be closed on Monday for Presidents Day.

AVERAGE CLASS III PRICES:

3 Month:	$15.82
6 Month:	$16.50
9 Month:	$16.98
12 Month:	$17.10

CHEESE:

For the week, blocks declined 8.50 cents with 10 loads traded. The weekly average price is $1.4110. Barrels remained unchanged with no loads traded. The weekly average price is $1.44. Dry whey declined a penny with one load traded. The weekly average price is 72.20 cents. The block cheese price declined each day this week.

BUTTER:

For the week, butter declined 0.50 cent with 113 loads traded. The weekly average price is $1.6705. It has been a long time since this volume of loads has been traded over the course of one week. The Grade A nonfat dry milk price declined 4.00 cents with 17 loads traded. The weekly average price is $1.5995.

OUTSIDE MARKETS SUMMARY:

March corn closed up .50 cent per bushel at $4.3175, March soybeans closed down 4.25 cents at $11.3300 and March soybean meal closed up $1.30 per ton at $309.20. March Chicago wheat closed down 3.75 cents at $5.4875. April live cattle closed down $0.03 at $240.63. March crude oil is up $.02 per barrel at $62.86. The Dow Jones Industrial Average is up 49 points at 49,501, with the NASDAQ down 50 points at 22,547.

Friday Midday Dairy Market Summary - Butter Weakens

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	4 Lower
SOYBEAN MEAL:	$0.90 Higher
LIVE CATTLE:	$1.00 Higher
DOW JONES:	275 Points Higher
NASDAQ:	113 Points Higher
CRUDE OIL:	$0.26 Higher

MIDDAY MARKET UPDATE:

Both block and barrel cheese remained unchanged at $1.3875 and $1.44, respectively. There were no loads traded in either category. The dry whey price remained unchanged at 72.00 cents, with no loads traded. This should have resulted in Class III futures remaining somewhat steady, but contracts are 51 cents lower to 3 cents higher, with the March contract showing the greatest loss. The butter price declined 3.00 cents to close at $1.7050 with 29 loads traded. There were 23 unfilled bids remaining at the close of spot trading, but the buyers were not aggressive. Grade A nonfat dry milk gained 0.25 cent to close at $1.60 with seven loads traded. Class IV futures are 12 cents lower to 20 cents higher. Butter futures are 1.45 cents lower to 1.52 cents higher. Dry whey futures are 0.25 cent lower to 0.50 cent higher. Cheese futures are 0.30-4.50 cents lower.

Friday Morning Dairy Market Update - Overnight Trade Showed Little Interest

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	10 to 20 Higher
Butter Futures:	2 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Lower
Soybean Futures:	4 to 5 Lower
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	2 to 3 Lower

MILK:

Milk futures have declined from the highs, but should find support above the previous lows that were established before the strong price increase. The hope is demand will slowly raise the floor with each price increase, establishing a higher level. However, the upside price potential may be limited due to continued strong milk production. If the outlook for milk prices improves, milk output will not slow. The discussion of whether there are sufficient replacement heifers available to the market continues. What we do know is that cow numbers continue to increase. Expansions continue to take place, and heifers seem to be available if one wants to pay the high price. The markets will be closed on Monday in observance of Presidents Day.

CHEESE:

One would like to think the block cheese price was near its low, and buyer interest would increase. However, buyers seem to have little reason to be aggressive as cheese supplies are sufficient for demand, and there is little expectation of lower supplies. Many plants are running on full schedules, with cheese output higher than a year ago.

BUTTER:

The butter price is expected to show further strength due to the large volume of unfilled bids remaining at the close of spot trading on Thursday. Butter is available, but sellers may hold for higher prices due to the strong buying interest. Churns are operating seven days a week to process the cream supplies, but inventory is not building.