Friday Morning Dairy Market Update - Volatile Week for the Market

OPENING CALLS:

Class III Milk Futures:	1 to 10 Higher
Class IV Milk Futures:	1 to 10 Higher
Butter Futures:	0.50 to 1.50 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	1 to 3 Lower
Soybean Meal Futures:	$2.00 to $2.50 Higher
Wheat Futures:	7 to 9 Lower

MILK:

Dairy markets are quiet Friday morning as there has been very limited trading overnight. Class III milk futures are unchanged to up 1 cent. Class IV has not yet traded. Nonfat dry milk (NDM) is only pennies away from contract highs. Can they close the week off strong? NDM futures have not yet traded Friday morning. Milk supplies across the country are currently tight in the East, Central and Upper Midwest, while they are described as heavy in the West. Milk production is expected to increase this month as cooler temperatures improve cow comfort.

CHEESE:

Cheese futures are down 0.2 cents in the nearby contracts as the deferred contracts have not yet been traded. The spot market has weakened this week with the current weekly average for cheddar blocks trading 12 cents below last week's average with only Friday's trade left to go. Barrels have not traded this week. Grocery stores are pushing advertisements and sales for cheese, trying to encourage the consumers to add cheese and butter products to their shopping carts.

BUTTER:

Butter futures have not yet been traded Friday, but are expected to continue to be pressured until demand increases. The grocery stores are doing everything they can to encourage the baking season to get started. The Cold Storage report last month did show that butter stocks are down from the previous month. However with an increase of 16% from the previous year at this time, it is difficult to gain much ground.

Thursday Closing Dairy Market Update - Products Report Delayed

GENERAL OVERVIEW:

USDA was to release the Dairy Products report Thursday afternoon, however at the time of the closing comments, USDA's website still does not have the report posted.

MILK:

Class III futures dropped anywhere from 15 to 33 cents lower on Thursday. Class IV futures were 1 to 3 cents higher on the months that traded. Dry whey was mixed from 0.15 lower to 0.175 higher. Nonfat dry milk spent the day trading sideways with mixed trade near the close of the day, trading anywhere from 1 cent lower to 1.225 cents higher. Milk production has been higher in recent weeks with the cooler weather. Cows are liking the temperature, and cow comfort is optimum.

AVERAGE CLASS III PRICES:

3 Month:	$16.98
6 Month:	$16.93
9 Month:	$17.08
12 Month:	$17.24

CHEESE:

Cheese futures traded anywhere from 1.5 to 2.9 cents lower this afternoon, further continuing the weakness seen from earlier this week. Cash prices have traded lower to flat this week, with today's trade off 1 cent for cheddar blocks. Barrels have not traded yet this week.

BUTTER:

Butter futures were unchanged to 4.75 cents lower on Thursday, while the cash price was a little less dramatic, only falling 0.75 cents. There were a lot of buyers and sellers in Thursday's spot trade with 22 loads actually trading and substantially more players wanting to make a trade but prices were too far apart. Holiday baking season is around the corner so grocery stores have been pushing cheese and butter advertisements.

OUTSIDE MARKETS SUMMARY:

December corn closed down 4.25 cents per bushel at $4.4000, January soybeans closed down 14.00 cents at $11.8825 and December soybean meal closed down $1.40 per ton at $317.20. December Chicago wheat closed up .75 cent at $5.9925.

December live cattle closed down $3.60 at $214.40. December crude oil is up 2.40 per barrel at $90.52. The Dow Jones Industrial Average is down 1833 points at 51,523 and the NASDAQ is down 1422 points at 24,315.

Fluid Milk and Cream - Western U.S. Report 45

Contacts report strong milk production in California, with milk output increasing week over week. Farm-level milk production remains steady in New Mexico, Arizona, and Colorado. In the Pacific Northwest, milk production has declined somewhat as positive cases of Highly Pathogenic Avian Influenza have expanded across the region. Idaho reports balanced farm-level milk output as cooler temperatures continue to spread throughout the region. 

Classes demand remains steady week over week. Federal Milk Market data for Areas 51, 124, and 131 show Class I, II, and IV posting the largest year-over-year declines from 2025 to 2026, while Class III shows the strongest growth in fluid demand. Cream availability across the West remains balanced. Some spot loads are available, but contacts expect cream supplies to become more abundant as favorable fall weather conditions continue. Cream multiples moved slightly higher at the top of both regional ranges. 

Condensed skim milk remains tight, with contacts reporting limited availability. Buyers are negotiating contracts to secure condensed skim milk and, in some cases, must also contract for other, more readily available fluid products in order to secure the contract. Some manufacturers are turning to nonfat dry milk (NDM) to fill ingredient supply gaps. According to contacts, suppliers have left some 2027 condensed skim contracts unfilled because of current availability projections.