Friday Closing Dairy Market Update - Week of Spot Excitement, Dairy Outlook

GENERAL OVERVIEW:

This week's spot market has been the main feature to watch as cheese rallies, Dry whey sets new all-time highs, and nonfat dry milk fails to make new highs. USDA released the October Dairy Outlook this afternoon with lower expectations of milk production from the September report.

MILK:

Class III milk futures climbed more than 34 cents on the October contract over the week. The November contract rallied $1.15 from last Friday's close to today's close. Class IV futures fell 9 cents this week on the October contract, while the November contract fell 32 cents from last week. The Dairy Outlook report was released this afternoon with a small drop in expectations of milk production from last month's report. The 2026 expectations were lowered by 0.3 billion pounds to 236.9 billion pounds. This is still an increase of 5.2 billion pounds over 2025's milk production of 231.7 billion pounds. For 2027, it is projected that the U.S. will produce a total of 238.4 billion pounds of milk, while an increase year over year, this is coming in 0.2 billion pounds than last's months projections.Milk produced per cow was the cause of the reduction, as USDA cut expectations for 2026 by 25 pounds, coming in at 24,475 annually in 2026, and cut 2027 projections by 20 pounds. The All-Milk price is unchanged at $19.90/cwt for 2026 and raised 65 cents to $20.45 in 2027. Class III prices were lowered by 40 cents for 2026 to $15.80 and down 20 cents to $16.90 for 2027. Class IV was projected at $18.90 for both years. That is a 35-cent increase for this year and a $1.35 increase for 2027.

AVERAGE CLASS III PRICES:

3 Month:	$16.59
6 Month:	$16.95
9 Month:	$17.15
12 Month:	$17.33

CHEESE:

For the week, the block cheese price increased by 29.25 cents with 17 loads traded. The weekly average price is $1.5395. The barrel cheese price increased by 16.75 cents with no loads traded. The weekly average price is $1.5095. The dry whey price increased by 3.5 cents with four loads traded. The weekly average price is 88.3 cents. The close today was the new highest record spot price at 89.50 cents.

BUTTER:

For the week, the butter price increased by 9.50 cents with 27 loads traded. The weekly average price is $1.3110. Grade A nonfat dry milk decreased 10.75 cents with 29 loads traded. The weekly average price is $2.2105. Butter futures increased 3.65 cents on the October contract this week, while the November contract increased 4.8 cents.

OUTSIDE MARKETS SUMMARY:

December corn closed down 3.75 cents per bushel at $4.7425; November soybeans closed down 1.75 cents at $12.6125 and December soybean meal closed down $2.70 per ton at $357.10. December Chicago wheat closed down 9.50 cents at $6.6050.

December live cattle closed up $1.10 at $228.35. November crude oil is up 3.44 per barrel at $101.41. The Dow Jones Industrial Average is down 175 points at 52,002 and the NASDAQ is down 572 points at 26,140.

Friday Midday Dairy Market Summary - Cheese Rally Still Going Strong

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	2 Lower
SOYBEAN MEAL:	$3.20 Lower
LIVE CATTLE:	$1.375 Higher
DOW JONES:	119 Points Lower
NASDAQ:	418 Points Lower
CRUDE OIL:	$2.30 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 3 cents to close at $1.6825 with no loads traded. The barrel cheese price increased 5 cents to close at $1.6200 with no loads traded. Only bids were left standing at the close with blocks seeing four remaining and barrels seeing eight. The dry whey price set another new record high for the third time this week, at 89.5 cents, an increase of 0.50 cents. There were two loads traded. Class III futures are 2 to 26 cents higher. The butter price closed 2 cents higher at $1.3650 with five loads traded. There were three bids remaining and 60 offers at the close. Grade A nonfat dry milk increased 1.25 cents to close at $2.1625 with no loads traded. Class IV futures are 3 cents lower in the nearby contracts to 42 cents higher in the deferred. Butter futures are 1.475 to 2.95 cents higher. Dry whey futures are 0.375 to 1.25 cents higher. Cheese futures are 0.1 cent higher nearby to 0.2 cents lower on the December contract. Nonfat dry milk futures are 0.025 cents lower in October to 7.95 cents higher on the November.

Friday Morning Dairy Market Update - Livestock, Dairy and Poultry Outlook Report Today

OPENING CALLS:

Class III Milk Futures:	8 to 13 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	0.5 to 1.5 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	3 to 4 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	5 to 10 Lower

MILK:

Class III milk futures have been on a big run higher this week. Since Friday's (Oct. 9) settlement, the November contract has climbed $1.15. Thursday, we saw a big start to the day with futures slowly pulling back by the final bell. The speed at which the market has rallied makes sense that we could be due for a small setback during Friday's trade. Class III futures started the night down 11 to 16 cents. By morning, futures were mixed from 15 cents lower to 6 cents higher. Nonfat dry milk has struggled midweek. After the spot market denied reaching new record highs, pressure set in and sellers took over letting product or positions go. This has weighed heavily on Class IV futures.

CHEESE:

What a day cheese had in the spot market Thursday. Blocks launched 12.25 cents higher while barrels finally decided to join in on the fun and rallied 11.75 cents. Holiday buying is the most likely cause for the sudden interest in cheese. Much like many other dairy products, futures rallied early on into midday but lost ground by the afternoon. Overnights are trading 0.2 to 1.3 cents lower.

BUTTER:

Butter has been less flashy about its rally this week as it has been overshadowed by cheese and dry whey momentum. The strength has been impressive in the face of high cream volumes available. Most likely, buyers are looking at the calendar and the shrinking 82% butterfat butter and are done waiting for a better opportunity to get needs bought.