Thursday Closing Dairy Market Update - Butter, Cheese Production Exceed a Year Ago

GENERAL OVERVIEW:

Class IV futures closed mostly lower despite the increase in butter and nonfat dry milk prices. Class III futures closed higher for the week. The February Dairy Products report showed an increase in the production of butter and cheese from February 2025.

MILK:

Class III futures closed higher for the week while Class IV futures closed lower. The outlook for Class III milk prices has improved significantly, with some contracts moving to new highs. However, caution needs to be exercised as increasing milk production may limit the upside price potential. But even with increasing cow numbers and milk output significantly higher than a year ago, prices are trending higher. The improved outlook will keep farmers pushing for higher milk production and increasing cow numbers. Beef-on-dairy calves continue to bring exceptional prices and are expected to continue to do so. Minnesota's largest dairy farm has applied to build the largest operation in the state. The application is for a feedlot and a dairy with a capacity for 18,855 milking cows. Of course, this expansion creates concerns about the environmental impact it may have.

AVERAGE CLASS III PRICES:

3 Month:	$18.13
6 Month:	$18.57
9 Month:	$18.63
12 Month:	$18.14

CHEESE:

For the week, blocks increased 9.00 cents with 15 loads traded. The weekly average price is $1.6306. Barrels increased 2.75 cents with no loads traded. The weekly average price is $1.5856. Dry whey slipped 0.25 cent with no loads traded. The weekly average price is 68.88 cents. The February Dairy Products report showed American cheese production totaling 451 million pounds, up 1.9% from February 2025. Italian-type cheese production totaled 506 million pounds, up 6.8% from a year ago. Total cheese output reached 1.16 billion pounds, up 3.9% from a year earlier. Dry whey output reached 67.3 million pounds, up 12.0%.

BUTTER:

For the week, butter declined 3.50 cents with 55 loads traded. The weekly average price is $1.7856. Grade A nonfat dry milk gained 5.00 cents with 5 loads traded. The weekly average price is $1.9450. Butter production in February totaled 221 million pounds. This was 9.1% above February 2025. Nonfat dry milk output reached 159 million pounds, up 8.7%. Skim milk powder output totaled 28.2 million pounds, down 8.3% from a year earlier.

OUTSIDE MARKETS SUMMARY:

May corn closed down 2.00 cents per bushel at $4.5225, May soybeans closed down 5.00 cents at $11.6350, and May soybean meal closed down $3.00 per ton at $315.20. May Chicago wheat closed up .75 cent at $5.9825. June live cattle closed up $1.98 at $246.33. May crude oil is up $11.63 per barrel at $111.75. The Dow Jones Industrial Average is down 61 points at 46,505, with the NASDAQ up 38 points at 21,879.

Wyoming Direct Hay Report

Fluid Milk and Cream - Western U.S. Report 14

Milk production is steady and cow comfort is stable in California. Central Valley manufacturers indicate milk output is pushing against processing capacities. Stakeholders indicate spot loads are available. 

Farm level milk output in Arizona is steady. Most stakeholders report being at the peak of spring production volumes, while some manufacturers have open processing capacities and are bringing in spot milk loads. 

Milk production is steady in New Mexico. 

Handlers in the Pacific Northwest report good cow comfort, spring weather, and stable milk production. Manufacturers note milk intakes are at anticipated levels, and some open processing is available. 

Milk production in the mountain states of Idaho, Utah, and Colorado varies from steady to stronger. 

According to the latest milk production report by the National Agricultural Statistics Service (NASS), the number of milk cows has increased for Arizona, California, Colorado, Idaho, Oregon, and Utah, while decreases are shown for New Mexico and Washington. 

Demands for Class I, II, III, and IV varies from lighter to steady throughout the region with the holiday weekend approaching. 

Cream loads are available to meet demands. Cream demand is mixed. Some stakeholders note increased delivery costs are slowing demand. Cream multiples increased this week. Condensed skim milk availability and demand are steady.