Tuesday Closing Dairy Market Update - Higher Price Projections

GENERAL OVERVIEW:

USDA released the WASDE report Tuesday with higher projected prices for cheese, nonfat dry milk (NDM), dry whey and higher milk prices across the classes. Butter was the only product left out on the optimistic projections.

MILK:

Class III futures were mixed Tuesday with strength in the nearby months and weakness after the first of the year and beyond. The WASDE report was positive for all classes of milk it projects prices for. Class III projections were raised 25 cents per cwt for 2026 to $16.05. For 2027, the price dropped from last month's report 5 cents to $16.85. Class IV projected price is now $19.10, up 20 cents from last month, for both 2026 and 2027. The All-Milk price is $20.10 for 2026, up 20 cents and $20.50 for 2027, up 5 cents. Milk production for the year is projected at 237.7 billion pounds, up 0.8 billion pounds from last month's report. The 2027 projections also increased to 240.7 billion pounds, up 2.3 billion from last month.

AVERAGE CLASS III PRICES:

3 Month:	$17.12
6 Month:	$17.02
9 Month:	$17.15
12 Month:	$17.32

CHEESE:

Cheese futures also saw strength nearby Tuesday while the deferred months were weaker. The WASDE report predicted cheese prices 2.5 cents higher for 2026, coming in at $1.55. For 2027, the projected cheese price decreased 2.5 cents at $1.59. On a fat basis, supply increased 0.8 billion pounds while ending stocks decreased 1.2 billion pounds on lower exports and domestic use for 2026. In 2027, supply increased 4.5 billion pounds from last month's report to 263.5 billion pounds. Ending stocks were raised only 2.9 billion pounds with higher exports and domestic use projected.

BUTTER:

Butter happened to be the only product with a poorer outlook on Tuesday's WASDE report. The projected butter price fell 1 cent per pound for 2026 to $1.55 and decreased 8.5 cents for 2027 to $1.465. Nonfat dry milk price saw a 2-cent gain from last month at $1.755 for 2026 and a 6-cent gain for 2027 at $1.80. On a skim solid basis, supply increased 0.7 billion pounds while ending stocks jumped 1.1 billion pounds on mixed demand with lower domestic use but higher exports. For 2027, ending stocks increased 1.9 billion pounds from the higher projected carry in, higher production but offset slightly by higher demand both domestically and internationally.

OUTSIDE MARKETS SUMMARY:

December corn closed up 9.75 cents per bushel at $4.4900, January soybeans closed up 39.75 cents at $12.2800 and December soybean meal closed up $5.80 per ton at $326.50. December Chicago wheat closed up 4.75 cents at $5.9275.

December live cattle closed up $3.00 at $219.20. December crude oil is down 50 cents per barrel at $86.35. The Dow Jones Industrial Average is down 157 points at 52,231 and the NASDAQ is down 187 points at 25,065.

Tuesday Midday Dairy Market Summary -

OUTSIDE MARKETS SUMMARY:

CORN:	10 Higher
SOYBEANS:	38 Higher
SOYBEAN MEAL:	$4.90 Higher
LIVE CATTLE:	$3.00 Higher
DOW JONES:	255 Points Higher
NASDAQ:	306 Points Lower
CRUDE OIL:	$0.93 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased by 5.25 cents to close at $1.6250 with 5 loads traded. The barrel cheese price was unchanged to close at $1.70 with no loads traded. Dry whey decreased 1.5 cents to close at 83.5 cents with no loads traded. Class III futures are trading 14 cents lower to 18 cents higher. The butter price increased by 0.5 cents, closing at $1.2650 with 5 loads traded. Grade A nonfat dry milk decreased 3.25 cents to close at $2.15 with 1 load traded. Class IV futures have not yet been traded Tuesday. Butter futures are 0.925 to 2.3 cents higher. Dry whey futures are unchanged to 0.25 cents lower. Cheese futures are 1.4 cents lower to 1.5 cents higher. Nonfat dry milk futures are 0.5 to 1.4 cents higher.

Tuesday Morning Dairy Market Update - WASDE Report Today

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	0.10 to 0.50 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	4 to 5 Higher
Soybean Meal Futures:	$2.80 to $3.30 Higher
Wheat Futures:	1 to 2 Higher

MILK:

Milk production has been on an amazing run with volumes growing steadily. The number of milk cows has continued to grow, with many articles speculating about whether we can reach 10 million milk cows. With this abundance of milk available, it has created a unique opportunity for the market to grow in product diversity as new product developments seem to be the norm of the market anymore. On top of that, we have exported products to many countries we otherwise would have never reached. Despite trade issues with China and Canada, export totals have continued to grow. When and if milk production declines, there will be markets looking for products we've developed, providing long-term support for dairy products.

CHEESE:

Overnight cheese markets are mixed, trading 0.1 cent lower to 0.6 cents higher. Holiday demand seems to be the driver lately as specialty products have been taken to production lines. The market has been supportive of cheese this month, looking for spot loads of blocks when prices are competitive.

BUTTER:

Butter has not yet been traded Tuesday morning. If Monday's spot trade is any indication of what is to come, there was a high volume of buyers looking for spot loads, with only a small number of loads being offered. Prices were down slightly Monday, falling 50 cents. Holiday baking season is here, although some are reporting lower buying volumes this November compared to last November.