Monday Closing Dairy Market Update - Barrel Cheese Prices Continue to Tumble Lower

MILK

Milk prices bounced higher Monday as traders returned from last week's bearish market shifts. End of month and quarter buying seemed to be at least part of the upward market shift during early week trade, but there still remains a glimmer of hope that prices may be at or near seasonal lows. Spot month October contracts posted a 20 cent per cwt gain Monday, confirming price levels above $23 per cwt with a closing price of $23.33 per cwt. November and December contracts led the market higher with 41 and 45 cent per cwt gains respectively, with traders temporarily looking past the bearish tone seen over the last week, and more focus on potential product demand and lower supplies in the coming months. Milk production is either at or near the lows and should slowly improve over the next few weeks. The milk production report indicated that a sufficient supply of milk should be available through the end of the year. This has set a negative tone in the market.

The August Agricultural Prices report was released last Friday, with All-milk price listed at $23.60 per cwt, compared to July levels of $22.80 and year ago price levels of $19.60 per cwt. Corn prices are listed at $3.84 per bushel, down $0.39 from July and down $1.89 from year ago levels. Soybean prices are listed at $10.30 per bushel, down $1 from July and down $4.20 per bushel from a year ago.

Alfalfa hay prices are listed at $175 per ton, compared to $145 per ton in July, and $174 per ton a year ago. Premium/Surpreme Hay price is listed at $236 per ton, down $1 per ton from July and down $46 per ton from year ago levels.

AVERAGE CLASS III PRICES

3 Month:	$23.17
6 Month:	$22.01
9 Month:	$21.15
12 Month:	$20.72

CHEESE

Cash cheese prices ended mixed Monday with limited trade seen on the midday exchange traded market. Barrel cheese prices posted the most aggressive losses, falling further from last Friday's lows, with a loss of 15 cents per pound. This moved barrel prices to $2.1475 per pound. Block prices posted a slight gain of 1 cent per pound, but with prices at $2.12 per pound, the market still remains extremely vulnerable given the inverse market relationship currently seen between the block and barrel markets. It is uncertain if the new month and beginning of the fourth quarter will bring about additional anxiety as to the further direction in the market, or if traders will now be willing and able to focus on upcoming seasonal demand and actively step back into the complex. Given the current market trend, price volatility is very possible over the next couple of weeks, but there is starting to be glimmers of hope that the bulk of market pressure has already been factored into the market.

BUTTER

Cash butter prices lead the move higher Monday as traders tried to bring some end of the month and quarter stability to the dairy complex. With 16 loads of butter selling on the exchange traded market, prices moved back from the lowest prices since early 2024 with markets gaining 7.25 cents per pound and closing at $2.805 a pound. It is still way to early to tell if the seasonal market low has been set, but the ability to bring significant activity and price support back to the table is a good sign that there may be further price support in the near future.

OUTSIDE MARKETS SUMMARY

December corn closed up 6.75 cents per bushel at $4.2475, November soybeans closed down 8.75 cents at $10.57 and December soybean meal closed down $2.50 per ton at $341.60. December Chicago wheat closed up 4.00 cents at $5.84. December live cattle closed up $0.33 at $184.80. November crude oil is up .17 per barrel at $68.35. The Dow Jones Industrial Average is up 17.15 points at 42,330.15 and NASDAQ is up 69.58 at 18,189.17.

Monday Midday Dairy Market Summary - Milk Prices Stabilize

OUTSIDE MARKETS SUMMARY:

CORN:	6 1/2 Higher
SOYBEANS:	1 3/4 Lower
SOYBEAN MEAL:	$1.80 Higher
LIVE CATTLE:	$0.35 Higher
DOW JONES:	106 Points Lower
NASDAQ:	14 Points Higher
CRUDE OIL:	$0.40 Higher

MIDDAY MARKET UPDATE:

The block cheese price rebounded slightly following the recent market pressure, gaining 1 cent closing at $2.12 with three loads traded. The barrel cheese price continues to be very unsupported, falling an additional 15 cents per pound closing at $2.1475 with two loads traded. Additional bids or offers remained on the trade floor at the end of spot trading. The dry whey price remained unchanged at 59.75 with no loads traded. Class III futures have stabilized Monday with end of the month and quarter positioning appearing to be the main focus during morning trade. Nearby Class III Milk contracts are 1 to 4 cents per cwt higher, while further out contracts are posting gains of 5 to 19 cents per cwt at midday. The butter price was the bright spot of the dairy complex, gaining 7.25 cents closing at $2.8050 with 16 loads traded. If continued support can develop through the week, market lows may have been established following the aggressive recent market pullback. Nonfat dry milk remained unchanged Monday closing at $1.3575 with no loads reported traded. Class IV futures are steady in nearby contracts in very limited market activity through the morning session. Deferred Class IV contracts are holding gains of 2 to 12 cents per cwt. Butter futures are 0.90 cent to 5 cents higher. Dry whey futures are steady to 0.775 cent higher.

Monday Morning Dairy Market Update - Futures Weakness Expected Ahead of Cash

OPENING CALLS:

Class III Milk Futures:	5 to 12 Lower
Class IV Milk Futures:	4 to 8 Lower
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Overnight trade indicates further pressure may take place on milk futures ahead of spot trading. That may change as more trading takes place this morning. Any indication of increased buying interest in the spot market may trigger aggressive buying of milk futures. After all, the market will not go down forever. Higher-than-normal temperatures will continue to impact the Southwestern region of the country impacting the increase in milk production. Other areas of the country are seeing milder weather improving cow comfort. Milk production should remain at lower levels for a few weeks before seeing increased growth.

CHEESE:

The barrel cheese price has not had any buying interest since the record high 1 1/2 weeks ago. The price has fallen 32.50 cents with no buyer interest. That may surface this week as buyers may take advantage of the lower price to increase ownership of supply for upcoming demand. Buyers of blocks have been purchasing as the price declined but have yet to support the market.

BUTTER:

Butter prices have declined more than cheese over the past month eliminating much of the gain for the year. Butter inventory declined significantly in August but remained 11% above a year ago. Butter production is increasing as cream supplies are more available than during the summer. Buyers continue to purchase as the price declines.

Friday Closing Dairy Market Update - Butter and Cheese Prices Plummet During the Week

MILK

Milk futures have been trending lower in response to the weakness of the spot prices. Traders have not supported the market in anticipation of a short-lived decline. This decline is real with no indication as to whether it is overdone to the downside or if prices are near a support level. Futures tend to move further in a direction than necessary resulting in prices being overdone to the downside. However, support needs to surface at some point for the selling pressure to subside. Milk production is either at or near the lows and should slowly improve over the next few weeks. The milk production report indicated that a sufficient supply of milk should be available through the end of the year. This has set a negative tone in the market.

AVERAGE CLASS III PRICES

3 Month:	$22.97
6 Month:	$21.74
9 Month:	$20.91
12 Month:	$20.51

CHEESE

For the week, blocks declined 12.75 cents with eight loads traded. The average price for the week was $2.1640. The barrel price fell 29.50 cents with no loads traded. There have been no loads of barrels traded on the spot market since the record high on September 18. The price has declined by 32.50 cents since the peak with no loads traded and no buyers showing up in the spot market. I had written about a possible void developing in the market as the price increased rapidly. The average price for the week was 2.4520. Dry whey increases by a penny with seven loads traded. The average price for the week was 59.35 cents.

BUTTER

For the week, butter fell 23.25 cents with 38 loads traded. The price average for the week was 2.8445. Grade A nonfat dry milk declined by 2.25 cents with 35 loads traded. the weekly average price was $1.3775. The butter price is at the lowest level it has been since February 15.

OUTSIDE MARKETS SUMMARY

December corn closed up 4.75 cents per bushel at $4.1800, November soybeans closed up 24.75 cents at $10.6575 and December soybean meal closed up $17.30 per ton at $344.10. December Chicago wheat closed down 4.25 cents at $5.8000. December live cattle closed down $0.35 at $184.48. November crude oil is up $0.51 per barrel at $68.18. The Dow Jones Industrial Average is up 138 points at 42,313 with the NASDAQ down 71 points at 18,120.

Friday Midday Dairy Market Summary - Spot Prices Fall

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	22 Higher
SOYBEAN MEAL:	$18.40 Higher
LIVE CATTLE:	$0.30 Lower
DOW JONES:	203 Points Higher
NASDAQ:	40 Points Higher
CRUDE OIL:	$0.14 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 3.50 cents closing at $2.11 with seven loads traded and four unfilled bids remaining at the close. The barrel cheese price fell by 10.25 cents closing at $2.2975 with no loads traded. No buyers showed up during spot trading. The dry whey price remained unchanged at 59.75 with no loads traded. Class III futures are 39 cents lower to 14 cents higher. The butter price declined by 5.75 cents closing at $2.7325 with 18 loads traded. This is the lowest price since February 15. Nonfat dry milk declined 1.25 cents closing at $1.3575 with 11 loads traded. Class IV futures are 17 cents lower to 32 cents higher. Butter futures are 3.95 cents lower to 0.67 cents higher. Dry whey futures are 0.50 cents lower to 0.52 cents higher.

Friday Morning Dairy Market Update - Mixed Trading Ahead of Cash

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Class III milk futures held up well despite the losses in the spot cheese and butter prices on Thursday. Futures closed mixed with pressure on closer months while later contracts closed higher. The same was not true for Class IV futures as they closed under substantial pressure. Low prices generally increase buyer interest but that has not been the case so far. Sellers of cheese and butter are having a difficult time finding buyers. Those who held out for higher prices when prices were increasing likely wish they had not, as prices have fallen significantly on limited trading activity. The current milk supply is sufficient for demand.

CHEESE:

The cold storage report was both positive and negative. Positive in the fact that cheese inventory for American cheese and total cheese was 6% below a year ago. Negative from the fact that the inventory of American cheese increased from July. It is unusual for inventory to gain during this time of year. Spot price may see further weakness.

BUTTER:

Butter stocks declined significantly in August but not enough to offset an increase in inventory from the previous year. Butter stocks are now 11% above a year ago. This may keep the upside price potential limited through the end of the year. Sufficient supply leaves buyers unaggressive and content to purchase on price weakness.

Thursday Closing Dairy Market Update - American Cheese Inventory Increased in August

MILK

Class III milk futures struggled much of the day but managed to close mixed. Most of the pressure was seen in the October and November contracts with those prices having to adjust to the weakness of the cheese prices. The selling pressure mounted in Class IV futures as the day progressed. Contracts suffered double-digit losses through the first half of 2025. Milk has become more available recently with spot milk prices steady to $1.50 below class. Much of that is due to various plants scheduling downtime for maintenance putting more milk on the market for a time. Milk production is near the low point for the year and may remain that way for a few weeks before production increases seasonally. Milk output may grow more than earlier anticipated if milk production per cow increases similar to what it did in August.

AVERAGE CLASS III PRICES

3 Month:	$23.13
6 Month:	$21.91
9 Month:	$21.01
12 Month:	$20.58

CHEESE

The block cheese price has fallen to the level it was a month ago. Buyers still have no real interest in stepping in aggressively. There is sufficient supply for demand. The August Cold Storage report showed cheese inventory below a year ago. The bearish aspect of the report was in the American cheese category. Inventory increased by 8.5 million pounds from July totaling 799.9 million pounds. Inventory generally declines during this time of year. Stocks are 6% below a year ago, but the gain in August is concerning and may be the reason behind the recent decline in cheese prices. Swiss cheese inventory totaled 22.5 million pounds in line with a year ago. Other cheese inventory totaled 577.9 million pounds, down 11.8 million pounds or 7% from a year ago. Total cheese inventory decreased by 2.9 million pounds totaling 1,400 billion pounds and 6% below a year ago.

BUTTER

The cold storage report shows why the butter price is experiencing weakness. Inventory declined 29.6 million pounds totaling 323.3 million pounds. This was positive, but inventory was 11% above a year earlier. Buyers see sufficient supply available and do not need to be aggressive.

OUTSIDE MARKETS SUMMARY

December corn closed down 2.00 cents per bushel at $4.1325, November soybeans closed down 12.25 cents at $10.4100 and December soybean meal closed down $1.40 per ton at $326.80. December Chicago wheat closed down 5.00 cents at $5.8425. December live cattle closed up $0.50 at $184.83. November crude oil is down $2.02 per barrel at $67.67. The Dow Jones Industrial Average is up 260 points at 42,175 with the NASDAQ up 108 points at 18,190.

Thursday Midday Dairy Market Summary - Butter Falls to a Six-Month Low

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	10 Lower
SOYBEAN MEAL:	$2.60 Lower
LIVE CATTLE:	$1.12 Higher
DOW JONES:	242 Points Higher
NASDAQ:	56 Points Higher
CRUDE OIL:	$2.28 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 3 cents closing at $2.1450 with no loads traded. The barrel cheese price declined 2.75 cents closing at $2.40 with no loads traded. There was an unfilled bid for a load of barrels remaining at $2.41 on Wednesday, but that bid was nowhere to be found today. Sellers are having a difficult time selling products as prices decline. The dry whey price gained 0.25 cents closing at 59.75 cents with five loads traded. Class III futures are 5 cents lower to 18 cents higher. The butter price fell 7 cents closing at $2.79 with nine loads traded. The price is at the lowest level since March 7. Grade A nonfat dry milk declined by 0.75 cents closing at $1.37 with three loads traded. Class IV futures are 21 to 48 cents lower. Butter futures are 7.47 cents lower to 1.72 cents higher. Dry whey futures are 0.50 cents lower to 0.22 cents higher. USDA will release the August Cold Storage report this afternoon.

Fluid Milk and Cream - Western U.S. Report 39

In California, milk production is stronger. However, some handlers indicate September 2024 milk output is flat compared to September 2023 milk output and below anticipated volumes. Spot load availability is looser. Manufacturers' milk intake volumes are meeting processing needs. Classes I and III demands are steady. Class II demand is lighter. Class IV demand is mixed. 

Milk production in Arizona is steady. Spot milk availability continues to be seasonally tight. According to the most recent milk production report from the National Agricultural Statistics Service (NASS), total milk cows, milk per cow, and total milk production for August 2024 all decreased compared to August 2023. Demands for all Classes are steady. 

Farm level milk output in New Mexico is steady. Availability of spot milk is seasonally tighter. According to NASS, total milk cows and total milk production decreased for August 2024 compared to August 2023. Among the states showing decreases in total milk production, New Mexico had the biggest decline, 11.3 percent. All Class demands are steady. 

Pacific Northwest handlers note milk production as steady or stronger. Although bottling demand is pulling more heavily on milk volumes, manufacturers convey milk volumes are sufficient for all Class manufacturing needs. Demands for Class II, III, and IV milk are steady. 

In the mountain states of Idaho, Utah, and Colorado, farm level milk output varies from steady to stronger. Processors in Utah note milk volumes and spot load availability as tight. Class I, III, and IV demands are steady. Class II demand is mixed. 

Cream is widely available throughout the region. Stakeholders note cream demand as lighter. Cream multiples moved lower on the top end of both ranges. Condensed skim milk demand and availability are steady for most of the region.

Thursday Morning Dairy Market Update - USDA Will Release the August Cold Storage Report

OPENING CALLS:

Class III Milk Futures:	5 to 10 Lower
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	Steady to 1 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Lower
Soybean Futures:	4 to 6 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	2 to 3 Higher

MILK:

Class III futures held well into the close on Wednesday despite the weakness of cash. Traders have had the night to assess the market and some have decided to sell contracts. The close of the spot markets on Wednesday could suggest further weakness today. Buyers may not yet be ready to step into the market to purchase cheese or butter aggressively. There has not been a surge in milk production and seasonal demand for dairy is improving, but market participants feel supplies will be adequate. The weakness of prices is earlier than usual but within the historical scope of a seasonal top. Spot prices will not decline from now through the end of the year, but may have difficulty regaining the uptrend.

CHEESE:

The unfilled bids at the close of the spot trading period would suggest further weakness today. Buyers may not yet be ready to step up to purchase supplies aggressively. When orders need to be filled above contracted orders, buyers may step in more aggressively until those orders are filled.

BUTTER:

The substantial weakness of butter has been a surprise and may not be over. The cold storage report will show the butter inventory for August. It is expected to be above a year ago, but inventory is expected to show a significant decline. The cream supply has increased leaving sufficient supply for manufacturing.

Wednesday Closing Dairy Market Update - Class III Futures Diverge From Cash

MILK

Class III futures moved in the opposite direction of cash as the market adjusted prices due to the losses being overdone on Tuesday. If there is further cash weakness on Thursday, selling pressure may resume moving futures lower. Milk production is mixed across the country with some areas seeing stable production while some areas show production increasing slightly. Milk production will not grow by leaps and bounds but should begin to improve over the next few weeks. Fall weather will improve cow comfort. Cow numbers continue to run below a year ago, but production per cow is improving, exceeding the level of a year ago. If the current trend continues, milk output could exceed the previous year in September or October. Class I demand remains strong as bottling is being done to supply the needs of the school systems. Class II demand is variable. The Farm Bill will expire on September 30^th if nothing is done to extend it or pass it. It likely will not be passed as they still cannot agree on a bill.

AVERAGE CLASS III PRICES

3 Month:	$23.44
6 Month:	$22.09
9 Month:	$21.15
12 Month:	$20.69

CHEESE

Interestingly, spot milk prices this week are at class to as much as $1.50 below class. Milk production is not overly abundant but sufficient to supply manufacturers with the milk needed to maintain production schedules. The spot cheese market would suggest supplies have increased substantially. The barrel cheese price has declined by 19.50 cents over the past week with no trading activity. The market developed a price void as buyers leapfrogged over each other to purchase barrels. This exaggerated the price, which is now correcting.

BUTTER

Butter continues to exhibit weakness with the buyers comfortable with supplies. The price will become low enough that buyers will turn more aggressive. The August Cold Storage report to be released on Thursday should show a significant decline in inventory, but stocks are expected to remain higher than a year ago.

OUTSIDE MARKETS SUMMARY

December corn closed up 3.50 cents per bushel at $4.1525, November soybeans closed up 11.00 cents at $10.5325 and December soybean meal closed up $2.30 per ton at $328.20. December Chicago wheat closed up 11.25 cents at $5.8925. December live cattle closed down $0.08 at $184.33. November crude oil is down $1.87 per barrel at $69.69. The Dow Jones Industrial Average is down 293 points at 41,915 with the NASDAQ up 8 points at 18,082.

Wednesday Midday Dairy Market Summary - Dairy Barrels Fall into a Void

OUTSIDE MARKETS SUMMARY:

CORN:	2 Higher
SOYBEANS:	9 Higher
SOYBEAN MEAL:	$1.20 Higher
LIVE CATTLE:	$0.22 Lower
DOW JONES:	280 Points Lower
NASDAQ:	21 Points Lower
CRUDE OIL:	$1.92 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 1.50 cents closing at $2.1750 with no loads traded. The closest bid in the market was at $2.11 suggesting further weakness. The barrel cheese price plummeted by 11.75 cents closing at $2.4275 with no loads traded. Barrels developed a price void under the market when the price moved to a record high. Sellers want to move supply and are not able to find willing buyers. However, a bid was finally posted at $2.40 possibly indicating a level where buyers are willing to purchase and support the market. The dry whey price gained 0.50 cents closing at 59.50 cents with no loads traded. Class III futures are 1 cent lower to 19 cents higher with the loss confined to the September contract. The butter price declined 4 cents closing at $2.86 with eight loads traded. The price is at the lowest level it has been since April 1. Grade A nonfat dry milk remained unchanged at $1.3775 with 13 loads traded. Class IV futures are 11 cents lower to 3 cents higher. Butter futures are 0.77 to 3.05 cents lower. Dry whey futures are 0.25 to 0.50 cents higher.

Wednesday Morning Dairy Market Update - Continued Weakness in Dairy is Expected Ahead of Cash

OPENING CALLS:

Class III Milk Futures:	4 to 8 Lower
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures suffered substantial losses on Tuesday as spot prices showed further weakness. The negativity carried through overnight and may dominate trading activity ahead of spot trading. The market is not a wash in milk but has sufficient for demand. The potential for stronger-than-expected milk production through the end of the year has changed the attitude of traders. There is little concern over a shortage. Cooler weather will improve cow comfort which may increase production per cow. Grain harvest is underway, with a large crop expected, which should help keep feed prices reasonable.

CHEESE:

The lack of buying barrels on the spot market is a cause for concern. Bids not being posted provides no indication as to the level where buyers may be interested in purchasing. The USDA will release the August Cold Storage report on Thursday, showing the amount of cheese in inventory and what may be expected through the end of the year.

BUTTER:

It has been surprising how much the butter price has declined. There may be further downside potential as buyers have shown little interest in purchasing supply. Churning is active and inventory is higher. Increasing demand is easily met with fresh and supply inventory.

 

Tuesday Closing Dairy Market Update - Milk Futures Close Under Substantial Pressure

MILK

It seems cheese prices may have reached their highs for the year. Prices may have a difficult time recovering from the recent weakness. This has put significant pressure on milk futures. Last week, the October price was above $24.00 with the close today nearly $1.00 below. Some of the pressure may have stemmed from the August Milk Production report showing higher-than-expected milk production. This signaled that the milk supply should remain sufficient for bottling and manufacturing. There were 11 of the top 24 states showing production declines in August. The largest decrease on a percentage basis was in New Mexico with a decline of 11.3%. Arizona declined 6.5% with Vermont down 5.1% and Virginia down 4.2%. The rest of the states showed declines of less than 4.0%. South Dakota showed the largest gain of 8.5% followed by Texas with an increase of 7.8% and Kansas up 6.6% the other states showed gains of 2.0% or less.

AVERAGE CLASS III PRICES

3 Month:	$23.09
6 Month:	$21.79
9 Month:	$20.93
12 Month:	$20.52

CHEESE

The block cheese price has eliminated nearly all of the gains of the past three weeks. The top may have been established for the year, but the price certainly can rebound to some extent as holiday buying increases and orders need to be filled. Barrels may be more concerning as there seems to be a price void under the market. Buyers have stepped away for the time being, letting the price fall. The supply of barrels is reportedly loser than it had been.

BUTTER

The butter price has now declined to the lowest level it has been since April 11. Manufacturers want to minimize inventory build and are willing to move supply as it may not be beneficial to hold supply for a higher price that may not materialize. It will be difficult, if not impossible, to regain the losses of the past two weeks.

OUTSIDE MARKETS SUMMARY

December corn closed down 1.75 cents per bushel at $4.1175, November soybeans closed up 3.00 cents at $10.4225 and December soybean meal closed down $2.80 per ton at $325.90. December Chicago wheat closed down 4.50 cents at $5.7800. December live cattle closed up $0.58 at $184.40. November crude oil is up 1.19 per barrel at $71.56. The Dow Jones Industrial Average is up 84 points at 42,208 with the NASDAQ up 100 points at 18,075.

Tuesday Midday Dairy Market Summary - No Buyer Interest for Dairy Barrels

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	1 Higher
SOYBEAN MEAL:	$2.60 Lower
LIVE CATTLE:	Unchanged
DOW JONES:	3 Points Lower
NASDAQ:	104 Points Higher
CRUDE OIL:	$1.04 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined a penny closing at $2.19 with no loads traded. The only bid in the market was 6 cents lower possibly indicating further downside potential remains. The barrel cheese price declined 4.50 closing at $2.5450 with no loads traded. Barrels had no buyers showing up. This is the fourth consecutive day with no buyers showing up to do any business. It provides no insight into where buyers might step in to offer market support. The dry whey price increased by 0.25 cents closing at 59 cents with one load traded. Class III futures are 1 to 53 cents lower with October and November showing the greatest loss. The butter price declined 4 cents closing at $2.90 with one load traded and three uncovered offers remaining at the close. Grade A nonfat dry milk declined 0.25 cents closing at $1.3775 with seven loads traded. Class IV futures have only been traded in the October contract with the price 20 cents lower. Butter futures are 0.62 to 4.05 cents lower. Dry whey futures are steady to 0.25 cents lower.

Tuesday Morning Dairy Market Update - Traders Uncertain of Direction

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	4 to 8 Lower
Butter Futures:	Steady to 1 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Lower
Soybean Futures:	3 to 4 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	Mixed

MILK:

Class III milk futures have been choppy over the past two weeks, moving in a sideways trend. There is concern that cheese prices may have reached a peak for the year even though demand should increase and continue through the next two months. Buyers may have positioned themselves with inventory to meet contracts and feel confident sufficient supply will be available for demand. Milk production has been improving with output in August at the highest level so far this year compared to a year ago. Milk production per cow may improve and exceed the levels of a year ago as the weather cools and cow comfort improves.

CHEESE:

Block cheese remains weaker than barrels. This has the spread between blocks and barrels at a record 39 cents. The spread will not continue at this level indefinitely, but it is difficult to determine which category will move to meet the other. Without buyers showing up in the barrel market for the past three days, I would expect barrels to weaken in price.

BUTTER:

There may be further downsides in butter, as buyers have a sufficient supply on hand and expect strong churning to continue, limiting the draw on inventory to satisfy demand. Butter demand is improving with the industry having to prepare for the higher demand time of year.

Monday Closing Dairy Market Update - August Dairy Cattle Slaughter Below a Year Ago

MILK

Class III futures closed mostly higher to begin the week even though the barrel cheese price declined. Traders seemed to believe the steady block price may indicate there is little downside potential at this time of year. The bearishness of the August Milk Production report did not trigger aggressive selling as had been anticipated. It did indicate that farmers have been holding onto cows and doing a great job of getting milk from those cows due to production per cow up 8 pounds above a year earlier. It had been anticipated that holding onto older cows or lower producers would reduce milk production potential. If that were the case, milk production would have been substantially higher if the heifer supply had been readily available at reasonable prices. The August Livestock Slaughter report showed dairy cattle slaughter up 5,400 from July at 231,300 head. However, this was 43,900 head lower than in August 2023.

AVERAGE CLASS III PRICES

3 Month:	$23.44
6 Month:	$22.09
9 Month:	$21.15
12 Month:	$20.69

CHEESE

The weakness of the barrel cheese price may continue. No interest has been shown from buyers over the past three days. There may be a price void under the market with no idea where buyers will be willing to step back in. Last week, Dairy Market News reported that processors indicated barrel supplies are finally loosening with supply not as tight as it had been. Traders seem to believe the downside price potential may be limited but it is difficult to know where that price level might be.

BUTTER

Butter continues to show weakness with buyers showing little interest in purchasing supply at current levels. It has been a surprise that the price has fallen back to the level last seen on April 19th. There is sufficient supply available to the market with churning active and inventory higher than a year ago.

OUTSIDE MARKETS SUMMARY

December corn closed up 11.75 cents per bushel at $4.1350, November soybeans closed up 27.25 cents at $10.3925 and December soybean meal closed up $9.50 per ton at $328.70. December Chicago wheat closed up 14.00 cents at $5.8250. December live cattle closed up $0.63 at $183.83. November crude oil is down $0.63 per barrel at $70.37. The Dow Jones Industrial Average is up 61 points at 42,125 with the NASDAQ up 26 points at 17,974.

Monday Midday Dairy Market Summary - Butter Declines to April Level

OUTSIDE MARKETS SUMMARY:

CORN:	12 Higher
SOYBEANS:	26 Higher
SOYBEAN MEAL:	$9.50 Higher
LIVE CATTLE:	$0.60 Higher
DOW JONES:	59 Points Higher
NASDAQ:	25 Points Higher
CRUDE OIL:	$0.56 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined by 3.75 cents closing at $2.20 with one load traded. The barrel cheese price remained unchanged at $2.59 with no loads traded. There were two uncovered offers for blocks and one for barrels remaining at the close. No buyers were looking to purchase barrels. The dry whey price was unchanged at 58.75 with no loads traded. Class III futures are 8 cents lower to 18 cents higher. The butter price declined 3.25 cents closing at $2.94 with two loads traded, one unfilled bid and two uncovered offers remaining at the close. This is the lowest price since April 19. Grade A nonfat dry milk remained unchanged at $1.38 with one load traded. Class IV futures are 7 cents lower to 1 cent higher. Butter futures are steady to 3.52 cents lower. Dry whey futures have not yet traded. Grain futures are strong despite harvest progressing at a rapid pace. Wheat is leading corn and soybean oil is leading the soybean complex.

Monday Morning Dairy Market Update - Milk Production Report May Pressure Prices

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	4 to 6 Higher
Soybean Futures:	10 to 13 Higher
Soybean Meal Futures:	$3 to $4 Higher
Wheat Futures:	8 to 10 Higher

MILK:

The August Milk Production report was negative with milk production in the top 24 states up 0.1% from a year ago and U.S. milk production just 0.1% below. Milk output to remain that strong in August is impressive with milk production per cow showing a strong increase. This may indicate to dairy product buyers that there is no concern over a tighter milk supply through the end of the year. This may put further pressure on the barrel cheese price after reaching a record high last week. The increase in dairy cattle slaughter from July did not reduce cow numbers, but the decline in slaughter compared to a year ago shows that farms are holding on to cows due to the high replacement prices. Traders will be cautious ahead of spot trading.

CHEESE:

The weakness of cheese prices to close out the week may continue today as buyers hold back to see how aggressive sellers will be. Barrels may have a price void under the market as the strong buying interest of last week seems to have been satisfied.

BUTTER:

The butter price may have a difficult time moving above $3.00 as the aggressive buying to build stocks ahead of Fall demand and the holiday period may already have been accomplished. Inventory is higher than a year ago and churning is active. The market seems comfortable with the current supply.

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.