Friday Closing Dairy Market Update - Butter Inventory Declines In June

GENERAL OVERVIEW:

The second half of the week was negative for Class III futures while the entire week was negative for Class IV futures. The butter price took the biggest hit this week. The June Cold Storage report showed lower butter and higher cheese inventories.

MILK:

Class III futures found support as the block cheese price increased. This improved futures prices immensely from July 7 to July 22. Futures prices weakened in response to the bearish milk production report, and they fell today as a result of the block price falling. Concern may be increasing that block cheese could follow the pattern of the previous time when the price fell back. Class IV futures have been under pressure the entire week in response to the weakness in butter and nonfat dry milk. The June Livestock Slaughter report showed there were 208,100 dairy cattle slaughtered. This was up 16,400 from May and up 19,400 head from June 2025. Even though slaughter was higher, the nation's dairy herd increased by 19,000 head from May according to the June Milk Production report.

AVERAGE CLASS III PRICES:

3 Month:	$16.82
6 Month:	$17.21
9 Month:	$17.28
12 Month:	$17.36

CHEESE:

For the week, the block cheese price decreased by 2.00 cents with 16 loads traded. The weekly average price is $1.6475. The barrel cheese price increased by 1.75 cents with no loads traded. The weekly average price is $1.6285. Dry whey decreased by 1.50 cents with 3 loads traded. The weekly average price is 68.25 cents. The June Cold Storage report showed American cheese inventory up 9.7 million pounds from May, totaling 822.8 million pounds. This is 2% below a year ago. Swiss cheese inventory decreased 886,000 pounds, totaling 24.0 million pounds, and was 5% above a year ago. Other cheese inventory increased 7.3 million pounds from May, totaling 586.2 million pounds. This was about even with a year ago. Total cheese inventory increased 16.2 million pounds, totaling 1.433 billion pounds. This was down 1% from a year ago.

BUTTER:

For the week, butter declined 8.25 cents with 77 loads traded. The weekly average price is $1.5410. Grade A nonfat dry milk declined 6.75 cents with 60 loads traded. The weekly average price is $1.4185. Butter inventory in June declined 3.2 million pounds from May, totaling 332.1 million pounds. This is 7% below a year ago. This indicates demand is strong and utilizing what is being produced.

OUTSIDE MARKETS SUMMARY:

December corn closed steady at $4.8750, November soybeans closed up 9.75 cents at $12.5350, and December soybean meal closed up $3.30 per ton at $335.20. September Chicago wheat closed down 18.25 cents at $6.7800. October live cattle closed up $1.13 at $222.50. September crude oil is down $2.88 per barrel at $89.31. The Dow Jones Industrial Average is up 236 points at 51,947, with the NASDAQ down 162 points at 24,976.

Friday Midday Dairy Market Summary - Block Cheese Falls Back

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	11 Higher
SOYBEAN MEAL:	$2.60 Higher
LIVE CATTLE:	$1.72 Higher
DOW JONES:	263 Points Higher
NASDAQ:	23 Points Lower
CRUDE OIL:	$3.28 Lower

MIDDAY MARKET UPDATE:

The block cheese price fell 6.25 cents to close at $1.6075 with two loads traded. This eliminated the gains of the past week. The barrel cheese price remained unchanged at $1.6300 with no loads traded. The dry whey price declined 1.00 cent to close at 68.00 cents with one load traded. Class III futures are 35 cents lower to 2 cents higher. The only gain is in the nearby July contract. The butter price slipped 0.25 cent to close at $1.5075 with 40 loads traded. There were 21 unfilled bids and 8 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk increased 0.25 cent to close at $1.4025 with 16 loads traded. Class IV futures are 15-35 cents lower. Butter futures are 0.02 -- 3.72 cents lower. Dry whey futures are steady to 1.00 cent higher. Cheese futures are 3.10 cents lower to 0.20 cent higher. The July contract shows the only gain. Nonfat dry milk futures are 1.07 cents lower to 0.20 cent higher. The June Cold Storage report will be released today.

Friday Morning Dairy Market Update - June Cold Storage Report Today

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	2 to 5 Lower
Butter Futures:	Steady to 1 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	5 to 7 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	4 to 5 Higher

MILK:

The bearish implications of the June Milk Production report influenced milk futures contracts through the end of the year. Whether this will impact spot cheese prices is yet to be seen. Some of the selling pressure was due to concern that the block cheese price would be unable to increase on Thursday. The possibility of cheese buyers having reached a threshold due to the outlook for strong milk production and thereby sufficient cheese supplies, increased the caution of traders. The June Cold Storage report will be released Friday afternoon. Inventories are expected to have increased. However, cheese invegtory may be near the levels of a year ago with butter inventory running well below a year ago. This would indicate strong demand as increased production is being absorbed.

CHEESE:

The block cheese price is at the highest level since early April while the barrel cheese price is at the highest level since mid-November 2025. With cheese production at its current level, it may be difficult to see much further upside in price in the near term.

BUTTER:

It is uncertain whether butter buyers will step up more aggressively at the low price or if they will remain content to hold back to see whether manufacturers will continue to move suppies on the spot market. More aggressive buying should increase seasonally, but that may be delayed this year due to the current supply.