Friday Closing Dairy Market Update - WASDE Reduces Milk Production Forecasts

GENERAL OVERVIEW:

The USDA released the October WASDE report today, lowering expected milk production for 2026 and 2027, while simultaneously lowering export expectations.

MILK:

Class III milk futures drifted lower on the October contract this week while the November and beyond futures contracts steadily gained ground. Class IV had limited trading on the October contract, yet did manage to climb 13 cents from Friday's close. The WASDE report lowered the Class III projected price for 2026 to $15.80, a 40-cent drop from last month, and lowered the 2027 projected price by 20 cents to $16.90. Class IV saw a 35-cent increase for 2026, now at $18.90, and a $1.35 increase in 2027 to $18.90. The All Milk price was unchanged for 2026 at $19.90 while increasing 65 cents for 2027 to $20.45. Nonfat Dry Milk increased 6.5 cents to $1.735 per pound for the 2026 projected price, and saw a 19-cent increase for 2027 to $1.74. Dry Whey increased 1 cent in 2026 to 68 cents and 2.5 cents for 2027 to 71.5 cents.

AVERAGE CLASS III PRICES:

3 Month:	$15.85
6 Month:	$16.42
9 Month:	$16.73
12 Month:	$16.94

CHEESE:

For the week, the block cheese price increased by 7 cents with 41 loads traded. The weekly average price is $1.3480. The barrel cheese price remained unchanged for the third consecutive week, with no loads traded. The weekly average price is $1.4525. The dry whey price increased by 3.5 cents with one load traded. The weekly average price is 84.60 cents. The close today of 86 cents was the second-highest price of all time. The record was placed Feb. 8, 2022, at 86.75.

BUTTER:

For the week, the butter price decreased by 6.50 cents with 37 loads traded. The weekly average price is $1.2880. Grade A nonfat dry milk increased 4.75 cents with 16 loads traded. The weekly average price is $2.2500. This is the highest price since May 19.

OUTSIDE MARKETS SUMMARY:

December corn closed down 20.50 cents per bushel at $4.7975, November soybeans closed up 4.50 cents at $12.9200 and December soybean meal closed up $8.00 per ton at $365.60. December Chicago wheat closed down 12.25 cents at $6.7100. December live cattle closed up $3.50 at $227.05. November crude oil is up .36 per barrel at $91.85. The Dow Jones Industrial Average is up 423 points at 51,654 and the NASDAQ is up 172 points at 27,366.

Friday Midday Dairy Market Summary - Cash Prices Higher

OUTSIDE MARKETS SUMMARY:

CORN:	27 Lower
SOYBEANS:	11 Lower
SOYBEAN MEAL:	$0.60 Lower
LIVE CATTLE:	$3.275 Higher
DOW JONES:	93 Points Lower
NASDAQ:	371 Points Lower
CRUDE OIL:	$0.20 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 3 cents to close at $1.3850 with four loads traded. The barrel cheese price remained unchanged at $1.4525 with no loads traded. The dry whey price was 1 cent higher, closing at 86.0 cents with no loads traded. Class III futures are 4 to 14 cents lower. The butter price bounced 2.5 cents higher Friday, closing at $1.2750 with 11 loads traded. There were 17 unfilled bids and four uncovered offers remaining. Grade A nonfat dry milk increased 0.75 cents to close at $2.2675 with nine loads traded. Class IV futures are 5 to 10 cents higher. Butter futures are 0.1 cent lower in the October contract; however, 0.55 to 3.975 cents higher in the deferred contracts. Dry whey futures are 0.20 to 0.75 cents lower. Cheese futures are mixed from 0.007 cents lower to 0.003 cents higher. Nonfat dry milk futures are steady to 1.35 cents lower.

Friday Morning Dairy Market Update - Overnight Dairy Markets Quiet

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	1 to 5 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	5 to 7 Higher
Soybean Meal Futures:	$1 to $5 Higher
Wheat Futures:	1 to 2 Higher

MILK:

Class III futures had a big day on Thursday, rallying on some contracts as much as 28 cents near the end of the trading session. Overnight markets have stayed quiet to drifting lower, with many traders waiting for more direction from Friday's cash trade as well as the USDA's October WASDE report. Recent cheese demand is the driver for Class III milk's strength.

CHEESE:

Cheese continues to climb in the cash market, sparking a futures rally in both cheese and Class III futures. So far, the cash market has increased by over 4 cents on the weekly average price for blocks while barrels have remained steady.

BUTTER:

Butter prices have been hit hard this week, with cash loads falling 4 cents on Thursday alone. Cash prices have fallen 6.5 cents from Monday to Thursday while futures trail slightly behind.