Wednesday Closing Dairy Market Update - Spot Milk Prices Strengthen as Demand Improves

GENERAL OVERVIEW:

Milk futures closed significantly higher in response to higher spot prices. Milk production is seasonally strong across much of the country.

MILK:

Milk production is seasonally strong. Some plants in the Eastern region of the country indicate that they are having difficulty finding spot loads of milk, as some of the new facilities that came online during the past year are pulling more of the available milk. Fluid milk demand is strong, with bottlers running on full schedules. Class III milk futures pushed higher in response to the increase in the underlying spot prices. Cheese prices increased with limited trading activity. Butter increased with no loads traded. The spot market has good support for the time being and is improving the outlook for milk prices. May through December Class III contracts are now above $18.00. Class IV March through November contracts are above 19.00, with the March and April contracts knocking on the door of $20.00.

AVERAGE CLASS III PRICES:

3 Month:	$16.52
6 Month:	$17.35
9 Month:	$17.69
12 Month:	$17.68

CHEESE:

Spot milk prices are increasing, with prices ranging from $1.00 under to $2.00 over class. Some of the newer facilities are purchasing spot milk to increase their production, which is tightening the availability of spot milk. Cheese production is strong and is expected to increase as the spring flush begins next month. Retail cheese demand has improved while demand from food service has remained steady.

BUTTER:

The price increased with no loads traded. Sellers have butter available but are holding for higher prices as long as buyers remain aggressive. Price weakness may be short-lived as inventory in January was 17% below a year ago. Low prices have cured low prices, but the upside potential is uncertain.

OUTSIDE MARKETS SUMMARY:

May corn closed up 3.50 cents per bushel at $4.4200, May soybeans closed up 9.75 cents at $11.6500, and May soybean meal closed up $7.40 per ton at $321.80. May Chicago wheat closed down 3.50 cents at $5.6975. April live cattle closed up $1.18 at $240.28. April crude oil is down $0.07 per barrel at $65.56. The Dow Jones Industrial Average is up 308 points at 49,482, with the NASDAQ up 288 points at 23,152.

Wednesday Midday Dairy Market Summary - Spot Prices Push Higher

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	6 Higher
SOYBEAN MEAL:	$7.20 Higher
LIVE CATTLE:	$0.80 Higher
DOW JONES:	284 Points Higher
NASDAQ:	265 Points Higher
CRUDE OIL:	$0.10 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 4.25 cents, closing at $1.6015 with two loads traded. This is the highest price since Nov. 11, 2025. The barrel cheese price jumped 7.00 cents, closing at $1.56 with no loads traded and one unfilled bid posted with no interested sellers. The dry whey price remained unchanged at 63.75 with no loads traded. Class III futures are steady to 65 cents higher, with the April contract showing the greatest gain. The butter price increased 2.25 cents, closing at $1.8350 with no loads traded. There were two unfilled bids and two uncovered offers remaining at the close. Grade A nonfat dry milk increased 2.25 cents to close at $1.6725 with two loads traded. Class IV futures are 25-50 cents higher. Butter futures are 2.63-7.50 cents higher with the April, May and July contracts limit up. Dry whey futures are 1.30 cents lower to 0.50 cent higher. Cheese futures are 0.10-5.30 cents higher.

Wednesday Morning Dairy Market Update - Spot Butter Price May Find Support

OPENING CALLS:

Class III Milk Futures:	8 to 15 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	1 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Class III milk futures were higher in overnight trade with double-digit gains in the March through May contracts. The February contract is up a penny and will show limited movement, with the contract mostly priced. The June and later contracts have not traded overnight. The Milk Production report was bearish to the market due to continued strong milk production and higher cow numbers. The Cold Storage report was neutral to cheese and bullish for butter. A reminder that the final day of the signup period for the Dairy Margin Coverage Program is Thursday. Historically, the USDA has extended the signup period, allowing for more time. However, if you intend to take part in the program, make sure you sign up by the deadline, as it may not be extended.

CHEESE:

The block cheese price has increased 27.75 cents since the low set on Jan. 12. This has been an unusual counter-seasonal move. However, it may not be counter-seaaonal, but rather a market correction of the bearishness that prevailed during the fourth quarter of 2025. It just seems counter-seasonal due to the price trend. Buyers have been taking advantage of the lower prices to hedge against higher prices late in the year. Fresh cheese demand has been good, keeping buyers aggressive in the spot market.

BUTTER:

Spot butter may find further support due to the Cold Storage report showing inventory down 17% from a year ago. Inventory increased in January but at a slower pace than last year. Demand has been good and absorbed increased production.