August Milk Production in the United States down 0.1 Percent

August Milk Production up 0.1 Percent        

Milk production in the 24 major States during August totaled 18.1 billion pounds, up 0.1 percent from August 2023. July revised production, at 18.2 billion pounds, was down 0.3 percent from July 2023. The July revision represented a decrease of 1 million pounds or less than 0.1 percent from last month's preliminary production estimate.  

Production per cow in the 24 major States averaged 2,036 pounds for August, 8 pounds above August 2023.   

The number of milk cows on farms in the 24 major States was 8.88 million head, 28,000 head less than August 2023, but unchanged from July 2024.   

August Milk Production in the United States down 0.1 Percent  

Milk production in the United States during August totaled 18.8 billion pounds, down 0.1 percent from August 2023.  

Production per cow in the United States averaged 2,018 pounds for August, 8 pounds above August 2023.  

The number of milk cows on farms in the United States was 9.33 million head, 40,000 head less than August 2023, but unchanged from July 2024. 

Friday Closing Dairy Market Update - August Milk Production Down 0.1%

MILK

Class III milk futures closed the week on a negative note with weakness in futures. The day began with higher prices as the anticipation of a higher block cheese price filtered through the market. Spot trading changed that with weakness in both blocks and barrels. Traders were thrown a bearish curve ball on the August Milk Production report. Milk output in the top 24 states totaled 18.1 billion pounds, up 0.1% from August 2023. Milk production above a year ago was not expected to happen this year, Milk production per cow was a surprise at 2,036 pounds, up 8 pounds from a year ago. Cow numbers remained unchanged at 8.88 million head from July. The U.S. milk output totaled 18.8 billion pounds, down 0.1% from August 2023. Production per cow totaled 2,018 pounds, up 8 pounds from a year ago. Cow numbers held steady at 9.33 million head. This may put some pressure on milk futures next week with traders selling and buyers on the spot market holding back as milk production might grow through the end of the year.

AVERAGE CLASS III PRICES

3 Month:	$23.43
6 Month:	$22.05
9 Month:	$21.13
12 Month:	$20.67

CHEESE

For the week, blocks declined 3.75 cents with seven loads traded. Barrels increased 10.50 cents with 11 loads traded. Dry whey declined by 1.75 cents with 12 loads traded. Barrels set a record higher on Wednesday and then slipped back the second half of the week. Buyers to step back as a tighter supply may not develop into the end of the year as a result of higher milk production than anticipated in August. The August Cold Storage report next week may provide a bullish scenario.

BUTTER

For the week, butter fell 15.75 cents with 14 loads traded. Grade A nonfat dry milk declined 1.25 cents with 32 loads traded. Nonfat dry milk may provide continued support to Class IV futures offsetting some of the weakness of butter. Butter futures hold a discount to cash moving through the first half of next year with the price not expected to be as strong.

OUTSIDE MARKETS SUMMARY

December corn closed down 4.25 cent at $4.0150. November soybeans closed up 0.25 cent at $10.12350. December wheat gained 4 cents closing at $5.6950. December soybean meal closed $1.20 per ton lower at $318.70. October live cattle jumped $2.60 closing at $182.57. December crude oil gained $0.07 closing at $71.25 per barrel. The DOW gained 38 points closing at 42,0673 with the Nasdaq down 66 points at 17,948.

Friday Midday Dairy Market Update - Cheese Prices Slide

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	Unchanged
SOYBEAN MEAL:	$3.50 Lower
LIVE CATTLE:	$2.00 Higher
DOW JONES:	85 Points Higher
NASDAQ:	43 Points Lower
CRUDE OIL:	$0.40 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 3.75 cents eliminating yesterday's gain and then some. The price closed at $2.2375 with no loads traded. The barrel cheese price declined 2.00 cents closing at $2.59 with no loads traded. Barrels may have seen the top with buyers not interested in purchasing at the high level. The dry whey price remained unchanged at 58.75 cents with two loads traded. Class III futures are 6 cents lower to 7 cents higher, falling back significantly from earlier highs. The butter price increased by 0.25 cents closing at $2.9725 with five loads traded. Grade A nonfat dry milk increased by 0.25 closing at $1.38 with five loads traded. Class IV futures are steady to 1 cent higher. Butter futures are 0.42 cents lower to 2.40 cents higher. Dry whey futures are 0.50 cents lower to 0.07 cents higher. The USDA will release the August Milk Production report this afternoon.

Friday Morning Dairy Market Update - Traders Anticipate Higher Block Cheese Trade

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	2 to 3 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	4 to 6 Higher

MILK:

Class III milk futures extended their gains overnight with the October contract trading above $24.00 again. Traders anticipate block cheese may have found a bottom and will continue higher, narrowing the price gap between blocks and barrels. The USDA will release the August Milk Production report this afternoon and may provide direction for trade through the end of the year. I estimate milk production to be 0.5% below August 2023 and cow numbers to be 3,000 head more than in July. Cow numbers will be the wild card as it is uncertain whether dairy cattle slaughter increased during the month and the available number of replacements.

CHEESE:

It is uncertain whether the decline in barrels on Thursday will be short-lived or if further weakness will continue. The price may show further weakness today due to no buyers showing up to do any business during spot trading on Thursday. The block/barrel spread may narrow again.

BUTTER:

The butter price may hang around the $3.00 level for a while. The market is adjusting to the balance of supply and demand. Churning remains active with cream supplies looser than they had been with multiple prices showing some weakness. Buyers are not concerned about the supply and have purchased ahead of the holiday demand.

Thursday Closing Dairy Market Update - October Class I Price: $23.17

MILK

Class III futures moved higher before spot trading took place in anticipation that the barrel price might show further strength. After spot trading, futures slipped back from their highs as traders were uncertain of the implications of the weakness of barrels indicated. The pressure was short-lived as futures moved higher through the afternoon. Milk production is steady to lower depending on the location. Milk production may be near the low of the year but may not turn higher very quickly. Fluid milk demand is higher limiting the amount available for manufacturing. Milk component levels are slightly higher than they were a year ago and should improve as the weather turns seasonal in time. However, milk production may not exceed year-earlier levels. The October Class I advanced price is $23.17, up $1.57 from September and $3.70 above October 2023. The USDA will release the August Milk Production report after the close on Friday. I estimate milk production to be 0.5% below a year ago and cow numbers to be 3,000 head higher than in July.

AVERAGE CLASS III PRICES

3 Month:	$23.49
6 Month:	$22.14
9 Month:	$21.19
12 Month:	$20.72

CHEESE

Dairy Market News reports that barrel cheese manufacturers say they have recently been able to offer spot loads to customers above contracted supplies. Yet, the barrel price has increased to a record high this week. Maybe the recent strong gain has been due to emotion with buyers leapfrogging over each other in their attempt to purchase supply before prices increase. This created a bidding war and higher prices.

BUTTER

The weakness of butter pushed the price below $3.00 for the first time since May. The market has been strong and trending higher all year. In the past two years, the price reached its peak in the first week of October. However, it should not be surprising that it reached its peak earlier with buyers having prepared for potential tightness earlier and now having sufficient purchased reducing the need to be aggressive.

OUTSIDE MARKETS SUMMARY

December corn closed down 7.00 cents per bushel at $4.0575, November soybeans closed down 0.75 cent at $10.1325 and December soybean meal closed up $.20 per ton at $321.60. December Chicago wheat closed down 10.25 cents at $5.6550. December live cattle closed up $1.28 at $181.13. November crude oil is up $1.25 per barrel at $71.13. The Dow Jones Industrial Average is up 522 points at 42,025 with the NASDAQ up 441 points at 18,014.

Thursday Midday Dairy Market Update - Barrels Slip From a Record High

OUTSIDE MARKETS SUMMARY:

CORN:	7 Lower
SOYBEANS:	1 Lower
SOYBEAN MEAL:	$1.10 Higher
LIVE CATTLE:	$1.42 Higher
DOW JONES:	548 Points Higher
NASDAQ:	498 Points Higher
CRUDE OIL:	$1.12 Higher

MIDDAY MARKET UPDATE:

The block cheese market uncovered some buying interest. The price increased 3 cents closing at $2.2750 with three loads traded. The barrel cheese price showed weakness after nine consecutive days of gains. The price declined 1.25 cents closing at $2.61 with no loads traded. There were unfilled bids for two loads of blocks, and an uncovered offer for a load of blocks and a load of barrels. No buyers for barrels showed up during spot trading. This causes one to wonder if a price void has developed in the market. The dry whey price declined 0.75 cents closing at 58.75 cents with six loads traded. Class III futures are 14 cents lower to 21 cents higher. The butter price declined 3.50 cents closing at $2.97 with one load traded. This is the first time the price has been below $3.00 since May 29. Two offers remained at the close of trading. This solidifies that the seasonal top has been established in the market. Nonfat dry milk price declined by 0.50 cents closing at $1.3775 with 15 loads traded. Class IV futures are steady to 13 cents lower. Butter futures are 1.55 cents lower to 0.55 cents higher. Dry whey futures are 1.25 cents lower to 0.25 cents higher.

Fluid Milk and Cream - Western U.S. Report 38

In California, milk production has been trending weaker recently. Handlers indicate September 2024 milk output is above September 2023 milk output, but below anticipated volumes and down compared to last month. Stakeholders convey spot milk loads can be found for buyers looking to fill needs, but spot milk loads are not abundant. Class III demands are strong. All other Class demands are steady. According to the California Department of Water Resources, as of September 17, 2024, the state precipitation total for the 2023-24 Water Year, which ends on September 30, 2024, is 23.74 inches. The current precipitation total is .27 inches above the historical mean. According to the California Department of Water Resources, as of September 18, 2024, the estimated total statewide reservoir storage is 25.00 million- acre feet, which is 114 percent of the historical average for the month. 

Farm level milk output is steady in Arizona. Stakeholders describe milk volumes as tight. All Class manufacturing demands are steady. 

Milk production in New Mexico is noted as stronger. However, milk volumes remain tight in this part of the southwest as well. Demands for all Classes are steady. 

Handlers in the Pacific Northwest indicate steady or stronger milk production. Manufacturers convey milk volumes are meeting processing needs. Spot milk availability is tighter this week. Class I demand is stronger. Class II, III, and IV demands are steady. 

Farm level milk output in the mountain states of Idaho, Utah, and Colorado varies from steady to stronger. Stakeholders suggest looser availability of spot milk loads this week. Manufacturers suggest milk volumes are healthy compared to production needs. All Class demands are unchanged. 

Cream volumes are generally available in the region, more so than other parts of the country. Cream demand varies from steady to lighter. Cream multiples moved slightly lower on the top end of both ranges. Condensed skim milk demand and availability has not changed from last week.

Thursday Morning Dairy Market Update - Choppy Futures Trade Ahead of Cash

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	2 to 3 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Lower
Soybean Futures:	4 to 6 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	7 to 8 Lower

MILK:

The decline of Class III milk futures on Wednesday reflected traders becoming nervous over the widening spread between blocks and barrels and continued diverging prices. Class IV milk futures fell due to the weakness of butter. The volatility of the cash market keeps traders cautious. It also had traders trading only for a short term to attempt to take a profit from the market rather than establishing long-term positions. Milk production is steady at the low end of the summer cycle and may remain this way for a few weeks before beginning to improve. The USDA will release the August Milk Production report on Friday which is expected to show milk production remaining below a year ago.

CHEESE:

The activity in the spot market on Wednesday with the bids and offers remaining at the close of trading suggests a further divergence of blocks and barrels today. This is a concern that once buyers of barrels have their needs filled, there could be a void in the market.

BUTTER:

The top has been established for the year. The price could hold around the $3.00 level for a time as the market balances supply with demand. Butter is readily available to the market. Churning is active and any shortfall of fresh supply is supplemented with inventory. Inventory is expected to remain above a year ago through the end of the year.

Wednesday Closing Dairy Market Update - Global Dairy Trade Gains 0.8%

MILK

Milk futures closed lower, eliminating Tuesday's gains. The strength of barrels and the new record high were not enough to offset the concern over the block's further decline. Class IV futures fell due to the large decline in butter. The October Class III contract pushed above $24.00 around spot trading but could not hold falling back significantly.

The Global Dairy Trade Auction trade-weighted average increased by 0.8% during the event which took place on Tuesday. The average price was $3,883 per metric ton or $1.76 per pound with 38,814 metric tons sold. Anhydrous milk fat declined 1.2% to $7,220 per metric ton or $3.27 per pound. Butter declined 1.7% to $6,546 per metric ton or $2.97 per pound. Cheddar cheese increased 2.9% to $4,441 per metric ton or $2.01 per pound. Lactose increased 3.5% to $896 per metric ton or $0.41 per pound. Skim milk powder gained 2.2% to $2,809 per metric ton or $1.27 per pound. Whole milk powder increased 1.5% to $3,448 per metric ton or $1.56 per pound. Mozzarella increased 4.5% to $5,351 per metric ton or $2.43 per pound.

AVERAGE CLASS III PRICES

3 Month:	$23.33
6 Month:	$21.98
9 Month:	$21.07
12 Month:	$20.64

CHEESE

The barrel cheese price moved to another record higher diverging from blocks. This widened the block/barrel spread to an inverted 37.75 cents. This is a record spread difference between blocks and barrels. Fewer cheese plants can switch from block to barrel production to take advantage of the price disparity. Years ago, more plants had that ability.

BUTTER

The decline in the butter price of this magnitude during this time of year is certainly a surprise. However, the price is substantially higher so far this year than it has been historically higher with buyers purchasing on price dips to prepare for either a tighter supply or higher demand as the year progressed. It appears the high has been in for the year.

OUTSIDE MARKETS SUMMARY

December corn closed up .25 cent per bushel at $4.1275, November soybeans closed up 8.00 cents at $10.1400 and December soybean meal closed down $.10 per ton at $321.40. December Chicago wheat closed steady at $5.7575. October live cattle closed down $0.50 at $178.30. October crude oil is down $0.28 per barrel at $70.91. The Dow Jones Industrial Average is down 103 points at 41,503 with the NASDAQ down 55 points at 17,573.

Wednesday Midday Dairy Market Summary - Dairy Barrels Set Another Record

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$1.80 Lower
LIVE CATTLE:	$0.30 Lower
DOW JONES:	17 Points Higher
NASDAQ:	22 Points Higher
CRUDE OIL:	$0.48 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 3.25 cents closing at $2.2450 with three loads traded. The barrel cheese price gained 5.75 cents closing at $2.6225 with three loads traded. An unfilled bid for a load of barrels and an uncovered offer for a load of blocks remained at the close. This again suggests a further divergence of prices. The dry whey price remained unchanged at 59.50 cents with no loads traded. Class III futures are 20 cents lower to 12 cents higher. The butter price dropped 8 cents closing at $3.0050 with no loads traded and seven uncovered offers remaining at the close. This is the lowest price since May 28. No buyers showed up to do any business. Nonfat dry milk declined by a penny closing at $1.3825 with five loads traded. Class IV futures are 5 to 42 cents lower. Butter futures are 2.50 to 6.62 cents lower. Dry whey futures are 0.50 cents lower to 0.55 cents higher.

Wednesday Morning Dairy Market Update - Barrel Trade to Determine Milk Futures Direction

OPENING CALLS:

Class III Milk Futures:	2 to 6 Higher
Class IV Milk Futures:	4 to 6 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	10 to 12 Higher
Soybean Meal Futures:	$3 to $4 Higher
Wheat Futures:	2 to 3 Higher

MILK:

The October Class III contract moved closer to the $24.00 level in overnight trade reaching a high of $23.96. Further support in underlying cash may push the price back above that level. The demand for dairy products is variable with some plants indicating steady demand while others have difficulty filling orders. Some of this is due to the product and location. There have been some rumblings about the possibility of a two-year extension to the current Farm Bill. Congress needs to pass legislation to keep the government open by Sept. 30. This is also when the current one-year extension of the 2018 Farm Bill is set to expire. Farm groups are pressuring the government to get something done and not kick the can down the road. Time is running out.

CHEESE:

The cheese spot trading today will be interesting. The close of spot trading on Tuesday would suggest a further price divergence between blocks and barrels today. The spread is not expected to remain wide for very long, but it is uncertain which side will move to narrow the gap.

BUTTER:

The butter price may struggle to regain the previous high before the seasonal buying has run its course. The average butter price this year has exceeded any other year in history. The price has been trending higher compared to other years when the price showed substantial strength in the second half of the year. Buyers may have sufficient butter on hand and are not concerned about supply for the rest of the year.

Tuesday Closing Dairy Market Update - Prices Continue to Increase

MILK

Class milk futures showed good gains supported by the strength of barrel cheese. Futures increased with some contracts posting double-digit gains but failing to make new highs. It may take further gains in cheese prices to push futures above the highs. The action in the cash market would suggest this could take place on Wednesday, but things may change by that time. Milk production is steady in many areas while some others indicate further declines are being seen. Milk production should be near the lows for the year but may remain that way as temperatures in many areas remain above normal. Many farms have been able to harvest good quality feed which will be beneficial for milk production and reduce the cost of other ingredients in the rations. This may improve milk production but not to the extent that output will exceed the previous year. That may be difficult to achieve with lower cow numbers.

AVERAGE CLASS III PRICES

3 Month:	$23.43
6 Month:	$22.10
9 Month:	$21.13
12 Month:	$20.69

CHEESE

The barrel cheese price set a record high of $2.5650. This is 3.50 cents higher than the previous record set on November 2, 2020. Buyers remained active into the close suggesting there is potential for further upside. The block cheese price has been confusing as it seems to have reached a buyer threshold. The wide block/barrel spread may not be maintained for very long, but it is unclear which one will move to narrow the gap. The average price for blocks in August was $2.0298 compared to $1.9126 for July. The average for barrels was $2.1235 compared to $1.9239 for July. The average for dry whey was 57.14 cents compared to 52.23 cents in July.

BUTTER

There is sufficient butter for demand with buyers unconcerned over supply through the end of the year. Churning remains active with inventory higher than a year ago. Inventory needs to be used to supplement fresh production to meet demand. This is usual during this time of year. The level of demand will dictate how rapidly stocks will decline. The average price for butter in August was $3.1431 compared to $3.1103 in July. The average Grade A nonfat dry milk price was $1.2607 compared to $1.1981 in July.

OUTSIDE MARKETS SUMMARY

December corn closed up 1.75 cents per bushel at $4.1250, November soybeans closed up 1.50 cents at $10.0600 and December soybean meal closed down $2.30 per ton at $321.50. December Chicago wheat closed down 2.75 cents at $5.7575. October live cattle closed up $1.58 at $178.80. October crude oil is up 1.10 per barrel at $71.19. The Dow Jones Industrial Average is down 16 points at 41,606 with the NASDAQ up 36 points at 17,628.

Tuesday Midday Dairy Market Summary - Dairy Barrels Reach Record High

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	2 Lower
SOYBEAN MEAL:	$3.10 Lower
LIVE CATTLE:	$1.60 Higher
DOW JONES:	75 Points Lower
NASDAQ:	5 Points Higher
CRUDE OIL:	$1.35 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 2.25 cents to close at $2.2775 with no loads traded. The barrel cheese price jumped 7.50 cents closing at $2.5650 with eight loads traded. There were three uncovered offers for blocks and two unfilled bids for barrels remaining at the close. This would suggest a further divergence of prices during spot trading tomorrow. This is a new record high. The block/barrels spread is now at an inverted 28.75 cents. The dry whey price increased by 0.50 cents closing at 59.50 with two loads traded. Class III futures are 6 to 37 cents higher. The butter price regained 1.50 cents closing at $3.0850 with five loads traded. There were two unfilled bids and four uncovered offers remaining at the close. Grade A nonfat dry milk gained 0.25 cents closing at $1.3925 with two loads traded. Class IV futures are 6 to 15 cents higher. Butter futures are 0.95 cents lower to 0.67 cents higher. Dry whey futures are steady to 0.75 cents lower.

Tuesday Morning Dairy Market Update - Traders Wait for Cash Trade

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	5 to 8 Lower
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	1 to 2 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	2 to 3 Higher

MILK:

It is anyone's guess as to what underlying cash prices will do today. The pattern has been that any price weakness of cheese has been minimal. Buyers have been willing to purchase more aggressively rather than speculate on whether prices could weaken and offer a better buying opportunity. Traders are cautious over the strength of underlying cash moving forward and there is uncertainty over the level of demand that will be seen. Milk output continues to run below a year ago and the milk production report should show further evidence of that. USDA will release the report on Friday after the closing of the market. It will be interesting to see what cow numbers did in August as the higher milk prices may have increased buying interest for high-priced replacements. However, if that were the case, it does not mean milk production will grow by leaps and bounds anytime soon.

CHEESE:

Cheese prices have more upside price potential based on what has been taking place over the past few weeks. Cheese production is steady with sufficient milk available to keep plants running at a strong pace. Spot milk prices hold a premium of as much as $2.50 over class.

BUTTER:

The butter supply is sufficient with buyers having no difficulty obtaining what they need to fill orders and to increase ownership for upcoming demand. The price declining to the lowest level since June may indicate the top is in. It may be difficult for the price to retest the high of the year. The price may have peaked early this year as buyers have been able to purchase what they need without much difficulty.

Monday Closing Dairy Market Update - Higher Cheese Did Not Support Class III Futures

MILK

Traders began liquidating some positions ahead of spot trading as there was concern over how prices would be able to move in the near term. Even though cheese prices increased, the selling pressure on the market did not change. Last week's strength was met with resistance and the market needs to prove itself before traders become aggressive buyers. Milk output below year-ago levels and lower cow numbers will not change the market fundamentals quickly. However, other outside factors could influence the strength of milk prices. The FOMC rate decision on interest rates will be released at 1 p.m. CDT Wednesday. There is a 59% chance they will cut interest rates by a half point. This would not impact dairy demand immediately, but it could have a longer-term positive impact.

AVERAGE CLASS III PRICES

3 Month:	$23.32
6 Month:	$21.98
9 Month:	$21.04
12 Month:	$20.61

CHEESE

Cheese buyers remained aggressive and wanted to purchase cheese. The buyers are not willing to step back and wait for a price decline. Price declines have been limited over the past weeks. Buyers will purchase now and pick up supply instead of having to chase the market higher if supply tightens further.

BUTTER

The butter price may have reached a threshold and will find a level where buyers and sellers are comfortable doing business. The price has been slowly increasing all year and may have difficulty exceeding the previous high. Time will tell as demand improves through the rest of the year.

OUTSIDE MARKETS SUMMARY

December corn closed down 2.50 cents per bushel at $4.1075, November soybeans closed down 1.75 cents at $10.0450 and December soybean meal closed up $.90 per ton at $323.80. December Chicago wheat closed down 16.25 cents at $5.7850. October live cattle closed down $0.43 at $177.23. October crude oil is up $1.88 per barrel at $70.53. The Dow Jones Industrial Average is up 228 points at 41,622 with the NASDAQ down 92 points at 17,592.

Monday Midday Dairy Market Summary - Butter Falls Back

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	1 Lower
SOYBEAN MEAL:	$1.70 Higher
LIVE CATTLE:	$0.42 Lower
DOW JONES:	160 Points Higher
NASDAQ:	100 Points Lower
CRUDE OIL:	$1.55 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 2.50 cents closing at $2.30 with one load traded. The barrel cheese price increased 0.50 cents closing at $2.49 with no loads traded. There was an unfilled bid and two uncovered offers for barrels remaining at the close. The dry whey price declined 1.50 cents closing at 59 cents with two loads traded. Class III futures are not paying attention to the strength of cheese with contracts 38 cents lower to 1 cent higher. The butter price declined 6 cents closing at $3.07 with three loads traded. This is the lowest price since July 24. Butter may have reached its high as supply remains available leaving buyers less aggressive. Grade A nonfat dry milk slipped 0.25 cents closing at $1.39 with five loads traded. Class IV futures have only traded in the February contract with the price 34 cents higher. Butter futures are steady to 5.15 cents lower. Dry whey futures are 0.55 to 1.72 cents lower.

Monday Morning Dairy Market Update - Milk Futures May See Early Strength

OPENING CALLS:

Class III Milk Futures:	4 to 8 Higher
Class IV Milk Futures:	2 to 4 Higher
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Lower
Soybean Futures:	1 to 3 Lower
Soybean Meal Futures:	Steady to $1 Higher
Wheat Futures:	8 to 10 Lower

MILK:

Class III futures in overnight trade indicate higher prices today. Traders are bullish on the market. However, spot trading activity will be the focus to see whether the barrel price will continue to increase or if it may be near resistance. Milk production is expected to remain at seasonally low levels. This may be extended as the weather outlook is for above-normal temperatures. Fluid milk demand is strong with reduced volumes available for manufacturing. This may further reduce inventory as demand increases over the next few months.

CHEESE:

The block/barrel spread moved quickly to an inverted 21 cents last week. Barrels moved to a 4-year high as buyers were aggressively looking for supply. Based on the activity in the spot market on Friday, it would indicate further upside price potential is possible.

BUTTER:

The butter price may regain what it lost last week, but the price may remain in a sideways trend. There is sufficient butter for demand with inventory higher than a year ago. Churning is active keeping the butter supply from tightening.

Friday Closing Dairy Market Update - Class III Futures Close Mostly Higher

MILK

It has been a good week for Class III futures with new contract highs in all months. Strong underlying cash prices supported futures with most of the gain seen in the barrel price. The September contract is mostly priced and will see limited price movement as the movement of spot prices will not have much impact on it. The tightening milk supply has increased the desire of buyers to purchase cheese and butter for filling contracts and for expected demand through the rest of the year. Milk production seems to have reached its low for the year and will slowly improve. The lower cow numbers will impact the gain in milk production seen during the rest of the year. Class IV milk futures were higher in most months but did not make new contract highs in all contracts this week. The butter price was the limiting factor for Class IV futures.

AVERAGE CLASS III PRICES

3 Month:	$23.53
6 Month:	$22.22
9 Month:	$21.21
12 Month:	$20.73

CHEESE

For the week, blocks increased by 0.50 cent with nine loads traded. Barrels jumped 21 cents with only three loads traded. Dry whey increased by 1.75 cents with nine loads traded. The strength of barrels pushed milk futures higher and widened the block/barrel spread to an inverted 21 cents The spread closed last week at an inversion of 0.50 cent. Barrels were in demand with buyers aggressive and limited loads offered for sale. The barrel price is at the highest level it has been since November 5, 2020.

BUTTER

For the week, butter declined 4.50 cents with 12 loads traded. Grade A nonfat dry milk gained 2.75 cents with 31 loads traded. We can clearly see where the demand was this week as buyers aggressively purchased nonfat dry milk.

OUTSIDE MARKETS SUMMARY

December corn closed up 7.25 cents per bushel at $4.1325, November soybeans closed down 4.50 cents at $10.0625 and December soybean meal closed down $.30 per ton at $322.90. December Chicago wheat closed up 16.25 cents at $5.9475. October live cattle closed down $0.38 at $177.65. October crude oil is down $0.32 per barrel at $68.65. The Dow Jones Industrial Average is up 297 points at 31,394 with the NASDAQ up 114 points at 17,684.

Friday Midday Dairy Market Summary - Dairy Barrels Reach a 4-Year High

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$1.10 Lower
LIVE CATTLE:	$0.45 Lower
DOW JONES:	339 Points Higher
NASDAQ:	139 Points Higher
CRUDE OIL:	$0.38 Lower

MIDDAY MARKET UPDATE:

The block cheese price slipped by 0.50 cents closing at $2.2750 with three loads traded. The barrel cheese price jumped 5 cents closing at $2.4850 with no loads traded. Barrels moved back to the highest price since November 5, 2020. There were two unfilled bids for loads of barrels with one uncovered offer at the close of spot trading. No bids or offers were remaining for blocks. The dry whey price increased 1.50 cents closing at 60.50 cents with three loads traded. Class III futures are 6 cents lower to 19 cents higher. The butter price increased 4.50 cents closing at $3.13 with no loads traded. This would suggest further upside is possible. Grade A nonfat dry milk slipped 0.25 cents closing at $1.3925 with one load traded. Class IV futures are steady to 17 cents higher. Butter futures are 1.10 to 5.12 cents higher. Dry whey futures are 0.22 to 0.72 cents higher.

Friday Morning Dairy Market Update - Lower Prices May Increase Buying Interest

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 5 Higher
Soybean Futures:	2 to 4 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	8 to 10 Higher

MILK:

The price swings in milk futures over the past few days have not been for the faint of heart. That is expected to continue as we move through September when demand improves. Milk production may not trend higher anytime soon as the extended weather forecast is for above-normal temperatures. This may limit milk production growth from the standpoint of cow comfort. Milk production may also be limited due to lower cow numbers. The tight heifer supply is expected to limit the increase in cow numbers and milk production. Spot milk prices are expected to increase as supply tightens. Milk will continue to move to deficit areas limiting the amount of milk available for processing.

CHEESE:

The divergence of cheese prices on Thursday leaves traders in a quandary. It will be interesting to see if the decline of blocks will increase buying interest or if sellers will take advantage of the higher barrel price. The recent pattern suggests buyers may want to take advantage of the lower block price to increase ownership.

BUTTER:

The weakness of butter was a surprise. This should increase the interest of buyers. The price decline could indicate the market has found buyer resistance and may remain in a range for the next month. Inventory is sufficient to fill in for any shortfall in production.

Thursday Closing Dairy Market Update - USDA Lowers Milk Production

MILK

Milk futures were set back as traders focused more on the weakness of block cheese. The strength of the barrels was not enough to generate buying interest. It has been unusual lately to see weakness in cheese and this got trader's attention. Milk futures still show strong prices, but we do not like to see the weakness. The USDA released the World Agricultural Supply and Demand Report. They reduced their expectation of milk production this year to 225.9 billion pounds, down 400 million from the previous report. Milk production for 2025 was reduced by 300 million pounds to 227.9 billion pounds. Exports on a fat basis rose by 100 million pounds to 11.6 billion pounds but were left unchanged for the next year at 11.3 billion pounds. Exports on a skim-solids basis were raised by 100 million to 48.9 billion pounds and were reduced by 300 million pounds for 2025 at 49.8 billion pounds. The average Class III price was raised this year by $1.05 to $19.45 per cwt. The average price for 2025 was raised by $0.95 to $19.60 per cwt. The Class IV average price was raised this year to $21.00, up $0.29 from the previous estimate. The price for 2025 was raised by $0.25 to an average of $21.20. The All-milk price increased by $0.75 to an average of $23.05 while the price for next year is estimated at $23.45, up $0.70.

AVERAGE CLASS III PRICES

3 Month:	$23.39
6 Month:	$22.17
9 Month:	$21.16
12 Month:	$20.69

CHEESE

The Class III daily price calculation increased due to the strength of the barrels and the fact that the formula is weighted more heavily toward barrels. Traders were not anxious to buy into the market as concern increased over the weakness of blocks. The USDA was optimistic for cheese prices this year and next year. The average price this year was raised to $1.93 per pound, up 10.50 cents from the August estimate. The price for 2025 was raised to $1.94, up 9 cents. The dry whey price increased by 0.50 cent to an average of 47.50 cents for this year and raised by 3.50 cents next year to an average of 48.50 cents.

BUTTER

The fall in the butter price was a surprise and should turn traders more aggressive tomorrow as they may take advantage of the lower price. The USDA raised the butter price by a penny this year to an average of $3.00 and raised the price by 2 cents next year to an average of $3.0050 per pound. The nonfat dry milk price increased 2.50 cents to an average of $1.22 this year and raised 1.50 cents next year to $1.2350.

OUTSIDE MARKETS SUMMARY

December corn closed up 1.25 cents per bushel at $4.0600, November soybeans closed up 10.25 cents at $10.1075 and December soybean meal closed up $3.20 per ton at $323.20. December Chicago wheat closed down .75 cent at $5.7850. October live cattle closed up $1.08 at $178.03. October crude oil is up $1.88 per barrel at $69.19. The Dow Jones Industrial Average is up 235 points at 41,097 with the NASDAQ up 174 points at 17,570.

Thursday Midday Dairy Market Summary - Block Cheese and Butter Prices Fall

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	10 Higher
SOYBEAN MEAL:	$3.40 Higher
LIVE CATTLE:	$1.65 Higher
DOW JONES:	134 Points Higher
NASDAQ:	132 Points Higher
CRUDE OIL:	$1.79 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 3.50 cents closing at $2.28 with four loads traded. The price initially declined to $2.27 before buyer interest reduced the loss. The barrel cheese price increased 5 cents closing at $2.4350 with two loads traded. The price divergence was surprising as price declines have been limited over the past few weeks. The dry whey price remained unchanged at 59 cents with one load traded. Class III futures are 25 cents lower to 2 cents higher. The only gain is seen in the September contract. It is mostly priced and adjusted to the weekly AMS prices. The butter price fell 9 cents closing at $3.0850 with 12 loads traded. This is the lowest price since July 23. Grade A nonfat dry milk slipped 0.25 cents closing at $1.3950 with 19 loads traded. Class IV futures have not traded but will trade lower when activity takes place. Butter futures are 2.00 to 6.50 cents lower. Dry whey futures are 0.32 cents lower to 0.12 cents higher. 

Fluid Milk and Cream - Western U.S. Report 37

In California, milk production is stronger. Handlers convey fat and protein components in milk output have been good during Q3 and continue to strengthen further along with strengthening milk production. Spot load availability improved slightly recently. However, processors indicate this is mostly due to some plant issues. Manufacturers note preventative maintenance projects are taking place as usual. Class I and III demands are strong. Class II and IV demands are steady. 

In Arizona, farm level milk output is steady. All Class demands are unchanged. 

Handlers in New Mexico indicate milk production is slightly stronger. Processors convey milk volumes are meeting manufacturing needs. All Class demands are steady. 

Pacific Northwest processors indicate milk production to be steady or stronger within their networks. Manufacturers indicate temperatures are more conducive to better cow comfort this week. Demands for all Classes are steady. 

Handlers note farm level milk output in the mountain states of Idaho, Utah, and Colorado as steady or trending stronger. Stakeholders convey spot loads of milk are not abundant, but available for buyers to secure. Manufacturers note milk volumes are comfortable compared to plant capacities. All Class manufacturing demands are steady. 

Cream volumes are neither abundant nor snug for the post-holiday week. Cream demand varies from steady to stronger. Cream multiples are unchanged. Condensed skim milk availability is tighter. Condensed skim milk demand is in-line with recent weeks.

Thursday Morning Dairy Market Update - Milk Futures Correct From Being Overbought

OPENING CALLS:

Class III Milk Futures:	10 to 15 Lower
Class IV Milk Futures:	4 to 8 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Higher
Soybean Futures:	7 to 8 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	6 to 8 Higher

MILK:

The weakness of Class III futures into the close on Wednesday set the expectation for weakness in overnight trade. Traders may be anticipating some weakness in cash but most likely the market is correcting from being overdone to the upside earlier this week. Spot prices do not indicate price weakness, but anything could happen as buyers and sellers take care of business. Traders will quickly move in either direction based on the movement of underlying cash. The World Supply and Demand report will be released today. The report will show the expectations for grain prices and stocks in the U.S. and the world. It will also show their estimates for milk production, milk prices and dairy product prices for this year and next year.

CHEESE:

Cheese buyers have turned more aggressive and are not holding back from purchasing supply. Buyers who have waited for price weakness to increase ownership have had to pay higher prices as that weakness has not taken place recently. The market may remain supported.

BUTTER:

The butter price continues to hang out with business being done and the price remaining choppy. The trend is up but has been moving slowly. Nonfat dry milk has been the leader with incredible gains over the past few weeks. This has been adding support to Class IV prices.

Wednesday Closing Dairy Market Update - Steady to Higher Cash Prices Did Not Support Milk Futures

MILK

Traders anticipated higher cheese prices this morning, but after they materialized pressure was put on Class III futures. The market had been overdone to the upside earlier this week and now it is correcting. The close was not very negative, but continued trading after futures were settled for the day showed substantial pressure with the November contract down as much as 42 cents. Further pressure may be seen during overnight trade. Class IV futures showed some pressure even though the butter price remained steady and nonfat dry milk increased slightly. The level of market volatility will remain high. Milk production is reportedly lighter, but the declines are less pronounced. Some areas report milk production is beginning to stabilize. Demand for Class I price is strong, reducing the milk available for manufacturing. The USDA will release the World Agricultural Supply and Demand report on Thursday. The report will impact the grain markets as adjustments are made to the supply and demand tables. The report contains the estimates for milk production, milk prices, and dairy product prices for this year and 2025.

AVERAGE CLASS III PRICES

3 Month:	$23.41
6 Month:	$22.24
9 Month:	$21.24
12 Month:	$20.75

CHEESE

Cheese demand is reported as steady to strong. Demand is picking up and cheese plants are trying to remain ahead of the market by processing as much milk as possible. There are reports that milk available for manufacturing has been declining since Labor Day as strong demand for fluid milk is pulling heavily on supplies. Spot milk prices are increasing at $1.00 to $2.50 over class. Some plants are actively pursuing this milk as they need to keep ahead of their orders. Spot milk prices are expected to increase further during September.

BUTTER

Butter manufacturers have been able to acquire extra cream supply recently as the Labor Day weekend allowed for an increase in the supply of cream. This may be short-lived as other Class III products are back to full production. Butter plants want to keep production strong as they prepare for stronger demand over the next two months.

OUTSIDE MARKETS SUMMARY

December corn closed up 0.50 cent per bushel at $4.0475, November soybeans closed up 3.25 cents at $10.0050 and December soybean meal closed up $2.50 per ton at $320.00. December Chicago wheat closed up 5.00 cents at $5.7925. October live cattle closed up $0.63 at $176.95. October crude oil is up $1.56 per barrel at $67.31. The Dow Jones Industrial Average is up 125 points at 40,862 with the NASDAQ up 370 points at 17,396.

Dairies remain optimistic amid challenges

Higher milk prices and lower feed costs have boosted producer optimism, but challenges remain. Highly pathogenic avian influenza (HPAI), also known as bird flu, is a growing concern, with three herds in California’s San Joaquin Valley testing positive. This region, home to 16% of U.S. milk cows, could significantly impact national milk production if HPAI becomes widespread. The USDA’s revised June Milk Production report suggests additional unreported cases may be affecting national figures. On a positive note, HPAI infections in Idaho have slowed.

Dairy markets have been bullish, with returns over feed cost for western dairies up $2.00 per cwt in the second quarter of 2024. Feed prices have generally decreased, with dairy-quality hay around $200 per ton and corn silage between $40 and $60 per ton, helping to offset financial pressures. However, some producers in Washington are under financial strain due to increased milk retains. The market for springers (cows or heifers close to calving) remains strong, with prices for bottom-end springers around $2,500 and higher-end prices nearing $4,000. Strong prices for cull cows and crossbred beef calves are providing additional revenue streams. Looking ahead, the dairy industry is optimistic, but volatility will continue. Producers should explore risk management strategies, such as Dairy Revenue Protection (DRP).

Profitability

September 11, 2024

Dairy: Breakeven profitability - Bullish 12-month outlook

 Increasing milk prices and reduced feed costs will enhance profitability, however, HPAI could pose headwinds. 

  

Wednesday Midday Dairy Market Summary - Stronger Dairy Cash Prices and Lower Futures

OUTSIDE MARKETS SUMMARY:

CORN:	2 Higher
SOYBEANS:	1 Higher
SOYBEAN MEAL:	$2.40 Higher
LIVE CATTLE:	$0.67 Higher
DOW JONES:	157 Points Lower
NASDAQ:	144 Points Higher
CRUDE OIL:	$1.82 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased by a penny closing at $2.3150 with one load traded. The barrel cheese price increased 4.50 cents closing at $2.3850 with one load traded. The buyers remain aggressive and are not waiting for price weakness that may not materialize. There was an unfilled bid for a load of barrels and an uncovered offer for a load of barrels and one for blocks. The dry whey price remained unchanged at 59 cents. Class III futures posted double-digit gains in some contracts ahead of spot trading. After spot trading, Class III futures are mixed ranging from 7 cents higher to 15 cents lower. Futures had the gains of today already factored in. The butter price remained steady at $3.1750 with no load traded and no buyers or sellers showing up to do any business. Grade A nonfat dry milk increased by 0.25 cents closing at $1.3975 with six loads traded. Class IV futures are 4 to 10 cents lower. Butter futures are 0.25 to 2.97 cents lower. Dry whey futures are steady to 0.50 cents higher.

Wednesday Morning Dairy Market Update - Traders Anticipate Further Strength

OPENING CALLS:

Class III Milk Futures:	2 to 5 Higher
Class IV Milk Futures:	4 to 8 Higher
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	10 to 12 Lower
Soybean Meal Futures:	$3 to $4 Lower
Wheat Futures:	Mixed

MILK:

Class III futures showed further aggressive buying in overnight trade. The October contract reached $24.00. It seems traders think underlying cash prices may see further gains. This may be possible as cheese prices rise on limited activity as buyers find limited interest from sellers. Lower milk production from a year ago generates concern over the ongoing milk supply and whether there will be sufficient to meet demand. Cooler weather will improve milk production but it is expected to remain below the level of a year ago. The rebound of milk supply may not be as great as it usually is due to lower cow numbers and production per cow.

CHEESE:

Cheese prices have been rising as buyers are more aggressive. Buyers are not waiting for price weakness but want to increase ownership for later demand. This has moved the market into the mode where buyers attempt to outbid each other. Sellers anticipate higher prices and hold back selling supply on the spot market.

BUTTER:

The butter price remains supported but does not share the same fundamentals as cheese. Inventory is higher and churning is active. Demand is increasing but is readily met with both fresh and inventoried supply. The limited price movement of butter compared to cheese has resulted in Class III futures above Class IV in nearby months.

Tuesday Midday Dairy Market Summary - Cheese Prices Move Higher

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	18 Lower
SOYBEAN MEAL:	$5.80 Lower
LIVE CATTLE:	$0.75 Lower
DOW JONES:	158 Points Lower
NASDAQ:	107 Points Higher
CRUDE OIL:	$2.91 Lower

MIDDAY MARKET UPDATE:

The block cheese price gained 3.50 cents closing at $2.3050 with one load traded. The barrel cheese price gained 5.50 cents with $2.34 with no loads traded. The dry whey price remained unchanged at 59 cents with two loads traded. Class III futures are 3 cents lower to 36 cents higher. The butter price declined 1.50 cents closing at $3.1750 with no loads traded. Grade A nonfat dry milk increased 1.50 cents closing at $1.3950 with one load traded. Class IV futures are 9 to 15 cents higher with activity confined to 2024 contracts. Milk futures continue to push to new contract highs. Butter futures are 0.40 to 1.02 cents lower. Dry whey futures are 0.25 cents lower to 1.05 cents higher

Tuesday Morning Dairy Market Update - Milk Futures Remain Supported

OPENING CALLS:

Class III Milk Futures:	2 to 5 Higher
Class IV Milk Futures:	4 to 8 Higher
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	10 to 12 Lower
Soybean Meal Futures:	$3 to $4 Lower
Wheat Futures:	Mixed

MILK:

Class III milk futures moved to new highs Monday with the December contract closing above $22.00. It is not surprising to see strength during this time of year, but the strength of this magnitude has been unexpected. Lower milk production than a year ago and lower cheese inventory have increased buying interest. Orders need to be filled and buyers need to come to the spot market if they are unable to purchase cheese through regular channels. Milk production should be near its seasonal low, but is expected to remain below year-earlier levels through the rest of the year. The current cow numbers may be maintained but not increased due to the tight heifer replacement supply. The market is being driven somewhat by the perception of a further tightening in supply.

CHEESE:

There is potential for further strength of cheese as buyers step up to purchase rather than holding back to wait for lower prices. The sellers of cheese do not have as much to bring to the spot market as they once had. This limits any weakness causing buyers to remain aggressive.

BUTTER:

The butter price is poised to test the highs and potentially exceed the high today or during this week. Retail demand has been improving which may reduce inventory seasonally, but at a faster rate than usual. The inventory remains above a year ago which may limit the upside price potential.

Monday Closing Dairy Market Update - Milk Futures Post a Strong Close

MILK

Class III milk futures moved substantially higher as traders bought contracts due to underlying cash prices being steady and higher. Short covering was triggered with good trading volume. The September Class III contract is mostly priced but gained 21 cents and nearly reached $23.00. Class IV futures posted double-digit gains in numerous contracts supported by stronger butter and nonfat dry milk prices. The market has bullish momentum with underlying cash showing little, if any, weakness. Traders are responding in anticipation of stronger milk prices as September progresses. The milk supply is not tight but tighter than it had been. Higher volumes of milk are moving to deficient areas to supply the needs of school systems. Spot milk prices are as much as $2.00 over class, but available for those who need it. There is concern milk production will remain below year-earlier levels for an extended time.

AVERAGE CLASS III PRICES

3 Month:	$23.13
6 Month:	$22.01
9 Month:	$21.09
12 Month:	$20.63

CHEESE

The barrel cheese price surpassed the high of August 21 and is now at the highest level since June 9, 2022. Cheese buyers need to step in to purchase what they need as waiting for a price break has not been profitable. Price retracements will be limited or may not take place with demand from buyers improving. The decline in the production of American cheese in June compared to the previous year should support the market.

BUTTER

The butter price may retest the recent high and potentially move higher as retail and food service demand improves. Churning is active more cream was available last week. Regional cream prices slipped on the lower end of the price ranges that were seen in the past few weeks. However, that may be short-lived as milk moves to deficit areas for school accounts.

OUTSIDE MARKETS SUMMARY

December corn closed up 1.00 cent per bushel at $4.0725, November soybeans closed up 13.00 cents at $10.1800 and December soybean meal closed up $.60 per ton at $325.00. December Chicago wheat closed up 1.50 cents at $5.6850. October live cattle closed up $1.75 at $176.93. October crude oil is up $1.15 per barrel at $68.82. The Dow Jones Industrial Average is up 484 points at 40,830 with the NASDAQ up 194 points at 16,885.