Wednesday Closing Dairy Market Update - September Fluid Milk Sales Decline 1.6%

MILK:

Class III showed volatility this week but closed near the levels of the end of last week. Class IV futures closed lower as further pressure was put on the spot butter price. Overall demand for dairy was steady with sufficient supply readily available for demand. There is no concern from buyers about obtaining products to fill orders. September fluid milk sales continued to follow the pattern of lower consumption with a decline of 1.6% compared to September 2023. Whole milk sales declined by 1.2%: flavored whole milk sales gained 2.1%; reduced-fat milk sales declined by 6.4%; low-fat milk declined by 4.1%; fat-free skim sales declined by 10.5%; flavored fat-reduced sales declined by 4.1% with other fluid milk product sales increasing 31.0%. Organic whole milk sales increased by 15.5%; organic reduced fat fell by 19.7%; organic reduced fat milk increased by 4.2%; organic low fat increased by 0.3%; organic fat-free skim milk sales decreased by 0.3%; organic flavored fat-reduced sales decreased by 0.3% while sales of other organic milk products increased by 63.7%.

AVERAGE CLASS III PRICES:

3 Month:	$18.89
6 Month:	$18.84
9 Month:	$18.79
12 Month:	$18.78

CHEESE:

For the week, blocks declined by 0.25 cent with one load traded. Barrels declined 4.50 cents with 10 loads traded. Dry whey increased by 5 cents with three loads traded. There will be no spot trading on Friday and no futures trading either. Cheese prices tried to find support but fell back as buyers were unaggressive. Blocks made a new low after reaching the high in September and moved to the lowest price since April 18. Barrels follow suit with a new low reaching the same level as blocks.

BUTTER:

For the week, butter declined by 4.75 cents with 10 loads traded. Grade A nonfat dry milk gained 2.75 cents with 14 loads traded. The price set new lows on Monday and Tuesday and bounced to close the holiday-shortened trading week. Demand will need to improve significantly, or the price will slip further moving through December.

OUTSIDE MARKETS SUMMARY:

March corn closed steady at $4.2800, January soybeans closed up 5.25 cents at $9.8875 and January soybean meal closed up $4.00 per ton at $295.40. March Chicago wheat closed down 9.50 cents at $5.4850. February live cattle closed up $0.90 at $188.60. January crude oil is down $0.05 per barrel at $68.72. The Dow Jones Industrial Average is down 138 points at 44,722 with the NASDAQ down 115 points at 19,060.

Wednesday Midday Dairy Market Summary - Cheese Prices Fall Back

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	6 Higher
SOYBEAN MEAL:	$2.40 Higher
LIVE CATTLE:	$1.07 Higher
DOW JONES:	126 Points Lower
NASDAQ:	127 Points Lower
CRUDE OIL:	$0.50 Lower

MIDDAY MARKET UPDATE:

Cheese prices set back Wednesday with blocks declining 5.25 cents to a new low since the decline began in September. The price settled at $1.6425 with one load traded. The barrel price declined 3.50 cents closing at $1.6050 with six loads traded. The dry whey price gained 2 cents, closing at 71 cents and another new high for the year. There were two loads traded. Class III futures came under pressure following the weakness of cheese with contracts unchanged to 37 cents lower. The greatest decline took place in the January and February contracts. The butter price gained 0.75 cent closing at $2.4925 with one load traded. Grade A nonfat dry milk gained 0.50 cent closing at $1.3950 with five loads traded. Class IV futures are 10 cents lower to 20 cents higher. Butter futures are 0.67 cent lower to 2.00 cents higher. Dry whey futures are 1.35 cents lower to 0.50 cent higher. Wednesday is the last trading day of the week as the dairy markets will be closed for Thanksgiving and on Friday.

Fluid Milk and Cream - Western U.S. Report 48

In California, handlers convey milk production for this week compared to last week as steady or somewhat stronger. That said, some handlers also note preliminary records indicate November milk production to be down from October milk production. Stakeholders report balancing plants are less active than seasonally expected. Spot milk loads continue to be tight. According to processors, the Central Valley has not received any of the flooding or disruptions from flooding that has taken place in other parts of the state. Demands for Class I and III milk are strong. Demands for Class II and IV milk are steady. According to the National Agricultural Statistical Service (NASS) milk production report, October 2024 milk production is down from October 2023 California milk production, both in terms of total milk production and milk per cow. 

In Arizona, milk production is stronger. All Class demands are steady. According to the NASS milk production report, October 2024 Arizona milk production is below October 2023 milk production, despite the milk per cow comparison showing an increase. 

For New Mexico, farm level milk output is stronger. Demands for all Classes are steady. According to the NASS milk production report October 2024 versus October 2023 comparison, New Mexico milk cow numbers decreased by 18,000 head, but milk per cow increased by 55 pounds. Total milk production in the state for October 2024 is down 4.4 percent compared to October 2023 according to the report. 

Handlers in the Pacific Northwest note farm level milk output as steady or somewhat weaker. However, milk supplies are ample for manufacturing needs. All Class manufacturing demands are steady. 

In the mountain states of Idaho, Utah, and Colorado, farm level milk output varies from steady to somewhat stronger. Spot milk availability is looser for the holiday week, as some manufacturers are fitting in downtime to various degrees. Demands for Class I, II, III, and IV are mixed. 

Stakeholders indicate cream volumes remain easily sufficient to accommodate needs throughout most of the region. However, there is mixed demand for cream loads and, stakeholders also report cream multiples moving higher on the top end of both ranges this week. Condensed skim milk availability is mixed, and condensed skim milk demand is lighter.

Wednesday Morning Dairy Market Update - Cheese Buyers May Be More Aggressive

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Higher
Soybean Futures:	3 to 5 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	3 to 5 Lower

MILK:

Class III milk futures have exhibited some strength over the past two days, providing some hope that prices will increase through the holiday season. However, price increases have been short-lived, and this may be no exception. Demand will not increase sufficiently to tighten the market during the rest of the year. Most holiday orders have been shipped and filled leaving fill-in buying much of what will be done. Milk production is slowly increasing but at a pace that is slower than usual. Nevertheless, there is sufficient milk available for bottling and manufacturing needs. Wednesday is the last day to trade dairy futures and options for the week. Markets will be closed on Thursday for Thanksgiving. Dairy futures, options and spot trading will be closed on Friday.

CHEESE:

Tuesday's steady spot cheese prices were not viewed as bearish for the market. The strength of dry whey supported Class III futures with the price moving to a new high for the year. Further strength is expected for dry whey through the end of the year. Sellers of cheese and the spot market may hold back in as buyers may turn more aggressive if they need to fill orders that will be placed over and above what has been contracted.

BUTTER:

This is no indication as to the level at which the butter price may find support. It is a buyer's market with purchases made at continued lower prices. The price could reach last year's lows before support might be found. Churning is active keeping sufficient supply available for demand.

Tuesday Closing Dairy Market Update - Dry Whey Supports Class III Futures

MILK:

Class III futures found some buying interest as steady cheese prices were not viewed as bearish due to the strength of dry whey. Dry whey moved to a new high for the year providing price support to the market that cheese prices have not been able to do. Milk production is improving throughout the country with component values higher than a year ago. Butterfat is reported to be particularly higher providing a greater cream supply to the market. More milk will be available over the Thanksgiving holiday weekend, but it appears the spot milk supply may be less than usual for this time of year. However, that will not result in increased prices as manufacturing and bottling plants are not clamoring for extra milk supplies. Class IV futures showed substantial losses on some contracts as the continued weakness of the butter price turned traders increasingly bearish. Wednesday will be the last day to trade dairy futures and options for the week with both the spot market and the futures market remaining closed on Friday.

AVERAGE CLASS III PRICES:

3 Month:	$19.09
6 Month:	$19.04
9 Month:	$18.93
12 Month:	$18.89

CHEESE:

Recently, steady cheese prices have been viewed negatively resulting in selling pressure on milk futures as this indicated limited upside price potential. That was not the case today as the strong dry whey price coupled with the steady cheese prices were viewed positively increasing the aggressive buying by traders. The dry whey price moved to a new high for the year and the highest level since March 29, 2022.

BUTTER:

The butter price showed further weakness moving price to a new low for the year and down to the lowest price since December 14, 2023. If the price breaks below $2.46, it will fall back to the lowest level since July 2023. There is an ample supply of butter and active churning. This leaves sufficient supply available and buyers complacent.

OUTSIDE MARKETS SUMMARY:

December corn closed down 4.75 cents per bushel at $4.20, January soybeans closed down 2.25 cents at $9.8350 and January soybean meal closed down $4.50 per ton at $291.40. March Chicago wheat closed up 2.25 cents at $5.58. February live cattle closed steady. January crude oil is down $0.17 per barrel at $68.77. The Dow Jones Industrial Average is up 124 points at 44,860 with the NASDAQ up 119 points at 19,174.

Tuesday Midday Dairy Market Summary - Dry Whey Sets a New High for the Year

OUTSIDE MARKETS SUMMARY:

CORN:	6 Lower
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$5.30 Lower
LIVE CATTLE:	$0.22 Higher
DOW JONES:	20 Points Lower
NASDAQ:	89 Points Higher
CRUDE OIL:	$0.40 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remain unchanged with blocks at $1.6950 and barrels at $1.64. The steady prices have not had a detrimental impact on Class III futures and might support higher futures prices. Further support stems from the increase in the dry whey price. Dry whey gained 3 cents closing at 69 cents with one load traded. This price sets a new high for the year and is the highest since March 29, 2022. Class III futures are steady to 36 cents higher. The butter price declined 2.75 cents closing at $2.4850 with three loads traded. Grade A nonfat dry milk gained 1.50 cents closing at $1.39 with two loads traded. Class IV futures have not yet been traded today. Butter futures are 0.35 -- 1.75 cents lower. Dry whey futures are 1.75 -- 2.20 cents higher

Tuesday Morning Dairy Market Update - Overnight Milk Futures Show Strong Gains

OPENING CALLS:

Class III Milk Futures:	15 to 20 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	4 to 5 Higher
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	7 to 9 Higher

MILK:

It was surprising to see the strength overnight in the December, January and February Class III futures contracts. Trading activity was large for an overnight market. The cold storage report should not have triggered buying interest as inventory followed the seasonal decline with cheese stocks lower than last year, and butter stocks higher like the September report. Cheese buyers are not likely to react to the cold storage report. Sufficient milk is available and will remain that way as milk output improves seasonally. However, the strength of blocks on Monday with sellers holding back may indicate the same may take place Tuesday. Some support could stem from the discovery of the New World screwworm in Mexico that will restrict cattle imports. This is a concern for the entirety of the livestock industry.

CHEESE:

The increase in the block cheese price on Monday may indicate sellers may hold back in anticipation as buyers could turn more aggressive as holiday demand improves and orders need to be filled. It may not be a turn in trend, but could provide support keeping the market from further weakness.

BUTTER:

It is uncertain how low the butter price will move. Further weakness is expected in light of October inventory, remaining 11% above a year ago. Buyers see no need to be aggressive and continue to wait for lower prices to increase ownership. Much of the need for butter for the holidays has been shipped. The strong churning schedules leave manufacturers wanting to move supply rather than build inventory further.

Monday Closing Dairy Market Update - October Cheese and Butter Inventories Declined

MILK:

Traders were uncertain as to how to interpret the moving of spot prices today. Pressure was put on Class III futures after spot trading with traders focusing on the weakness of cheese and butter prices. Even though the block cheese price increased, there may be little upside price potential as blocks may not move very far in the opposite direction. However, it is possible the strength of blocks could be an indication of an increase in demand which could support the butter and barrel markets. The nearby contracts for Class III futures were higher while later contracts were lower. Class IV futures were the opposite with nearby contracts lower while later contracts showed gains. The bird flu virus was detected in a retail sample of raw milk from a dairy in California. Raw Farm, the dairy that packaged the milk issued a voluntary recall for one batch of "Cream Top" with a best buy date of November 27. This should not be a concern for all milk as pasteurization kills the virus, making milk safe to consume.

AVERAGE CLASS III PRICES:

3 Month:	$18.99
6 Month:	$18.93
9 Month:	$18.84
12 Month:	$18.82

CHEESE:

Spot cheese prices diverged with blocks increasing and barrels decreasing. This widened the spread to 5.50 cents with blocks above barrels. The October Cold Storage report showed that American cheese inventory declined 9.6 million pounds from September totaling 772.7 million pounds and 7% less than October 2023. Swiss cheese inventory declined 364,000 pounds to 22.7 million pounds but was 9% above a year ago. Other cheese inventory totaled 547.2 million pounds, down 16.4 million pounds from September and 9% from a year ago. Total cheese inventory declined by 26.3 million pounds totaling 1.343 billion pounds, down 8% from October 2023.

BUTTER:

Butter inventory in October declined substantially, dropping 38.8 million pounds from September totaling 267.5 million pounds. However, inventory continues to remain 11% higher than a year ago. This will continue to be an anchor in the market. The butter price today moved to the lowest level this year and back to the lowest price it has been since December 15, 2023.

OUTSIDE MARKETS SUMMARY:

December corn closed down 0.75 cent per bushel at $4.2475, January soybeans closed up 2.25 cents at $9.8575 and January soybean meal closed up $4.40 per ton at $295.90. March Chicago wheat closed down 9.00 cents at $5.5575. February live cattle closed down $0.50 at $187.70. January crude oil is down $2.16 per barrel at $69.08. The Dow Jones Industrial Average is up 440 points at 44,737 with the NASDAQ up 51 points at 19,055

Monday Midday Dairy Market Summary - Butter Price Falls To New Low For The Year

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$2.50 Higher
LIVE CATTLE:	$0.17 Higher
DOW JONES:	360 Points Higher
NASDAQ:	48 Points Higher
CRUDE OIL:	$2.35 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased by 5 cents, closing at $1.6950 with no loads traded. A buyer continued to raise the bid, attempting to entice a seller. An uncovered offer was posted with the seller unwilling to lower the offer. That should have been friendly to Class III milk futures. However, traders focused on the inability of barrels to increase. The barrel price declined a penny, closing at $1.64 with three loads traded. There were uncovered offers for two loads remaining at the close. The dry whey price remained unchanged at 66 cents with no loads traded. Class III futures are 9 cents lower to 6 cents higher. The butter price decreased 2.75 cents, closing at $2.5125 with six loads traded. This establishes a new low for the year and the lowest price since Dec. 15, 2023. The market has been unable to find a bottom as manufacturers want to move supply rather than build inventory. Grade A nonfat dry milk increased 0.75 cent, closing at $1.3750 with seven loads traded. Class IV futures are 13 to 35 cents lower. Butter futures are 0.62 to 2.92 cents lower. Dry whey futures are 1.00 cents lower to 0.30 cent higher. The USDA will release the October Cold Storage report Monday afternoon. There will be no Dairy Revenue Protection prices released due to the report.

Monday Morning Dairy Market Update - Active Trading Overnight

OPENING CALLS:

Class III Milk Futures:	2 to 5 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures took a beating last week after the release of the milk production report. That was not the only reason as milk had already been processed, sold or consumed. It indicated to buyers that a sufficient milk supply would be available for bottling and manufacturing for the foreseeable future. October was the first month that cow numbers were above the previous year since May 2023. The surprising aspect of this is that the heifer supply has been tight. Time is running out for demand to impact the supply enough to raise prices. Much of the dairy product demand for the holidays has been shipped or delivered with only fill-in buying to dominate activity. President-elect Trump has announced Brooke Rollins, of the America First Policy Institute, as agriculture secretary.

CHEESE:

The USDA will release the October Cold Storage report Monday. It is expected to show cheese inventory significantly below a year ago. American cheese may show the largest percentage of decline compared to the previous year as American cheese production has been lower according to the monthly dairy products reports.

BUTTER:

The opposite will be true for butter inventory as it is expected to be significantly higher than a year ago. Butter output has been strong as the cream supply has been heavy. Demand has been less than anticipated with manufacturers actively selling supply to limit the increase in inventory.

Friday Closing Dairy Market Update - Dismal End to the Week

MILK:

It appears milk prices will remain weak through the end of the year. Little support is seen in the market as the underlying cash butter and cheese prices have been unable to find strong buying interest. Class III milk futures in the nearby months have fallen over $2.50 per cwt from the level they were in September. The market will have a difficult time recovering from this weakness. Any price increase may remain short-lived with traders seeing it as a selling opportunity. Much of the trading has been scalping the market for a profit if it is realized. Most traders have not established long-term positions. It would be nice to be able to say the selling has been overdone to the downside, but that has not been the case as nearby futures are in line with cash. It is reported that President-elect Trump is looking at former Georgia Senator Kelly Loeffler for agricultural secretary.

AVERAGE CLASS III PRICES:

3 Month:	$18.87
6 Month:	$18.84
9 Month:	$18.78
12 Month:	$18.80

CHEESE:

For the week, blocks declined 4.75 cents with 15 loads traded. Barrels declined 3.50 cents with 10 loads traded. Dry whey gained 0.50 cent with nine loads traded. It was unusual to see more blocks traded than barrels as it had been the other way around for quite some time. The buyers of cheese have no reason to be aggressive as the sellers have not been shy about moving cheese to the market rather than storing it. Buyers continue to wait for lower prices to purchase for demand or inventory.

BUTTER:

For the week, butter declined 9 cents with 23 loads traded. Grade A nonfat dry milk declined by 3.25 cents with 13 loads traded. The butter price continues to erode nearing the lows last seen in January. USDA will release the October Cold Storage report on Monday. The report is expected to show a significantly higher butter inventory than a year ago.

OUTSIDE MARKETS SUMMARY:

December corn closed down 1.25 cents per bushel at $4.2550, January soybeans closed up 5.75 cents at $9.8350 and December soybean meal closed up $1.50 per ton at $289.20. March Chicago wheat closed down 4.75 cents at $5.6475. February live cattle closed up $0.78 at $188.20. January crude oil is up $1.13 per barrel at $71.23. The Dow Jones Industrial Average is up 426 points at 44,297 with the NASDAQ is up 31 points at 19,004.

Friday Midday Dairy Market Summary - Butter and Cheese Continue to Decline

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$1.30 Higher
LIVE CATTLE:	$0.92 Higher
DOW JONES:	353 Points Higher
NASDAQ:	17 Points Higher
CRUDE OIL:	$1.19 Higher

MIDDAY MARKET UPDATE:

There is no bottom in the cheese market. The block cheese price declined 3.75 cents closing at $1.6450 with one load traded. The barrel cheese price declined 3 cents closing at $1.65 with one load traded. An offer for a load of barrels remained at the close of spot trading. The dry whey price gained 1.25 cents closing at 66 cents with two loads traded. Class III futures are 17 cents lower to 2 cents higher. The butter price declined by 0.75 cent closing at $2.54 with nine loads traded. The price initially dropped to $2.4875 before buyers became more aggressive, taking the price off the low. There were seven unfilled bids and three uncovered offers remaining at the close of spot trading. Nonfat dry milk declined 1.25 cents closing at $1.3675 with six loads traded. Class III futures are steady trading only in the October contract. Butter futures are 0.02 -- 2.52 cents lower. Dry whey futures are 0.42 -- 3.70 cents higher.

Friday Morning Dairy Market Update - Milk Futures May See Further Pressure

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures took a beating on Thursday and will be difficult to recover unless there is a strong gain in underlying cash. The October Milk Production report is a bearish cloud hanging over the market. The increase in cow numbers with the nation's herd above a year ago should keep sufficient milk available for demand. Milk output is slowly improving but not as quickly as usual during this time of year. However, production per cow is higher than a year ago and should remain that way for a time. Farmers are doing an excellent job at producing milk and dealing with the tight heifer supply.

CHEESE:

The reversal of cheese prices was not friendly to the market and solidified the mindset that price increases are short-lived. Most of the holiday orders are filled with some fill-in buying to continue. Contracts are being made for the first quarter of 2025 with some of the buying on the spot market for that purpose. The fresh cheese supply is sufficient for demand.

BUTTER:

Butter has been unable to find support, may erode and revisit the low price from December 2023. Retail demand has improved but is being offset by weakness in the food service industry. Butter inventory remains higher than a year ago with some reports indicating inventory is building. Lower prices should stimulate demand. International demand has been improving. 

Thursday Closing Dairy Market Update - Cattle Slaughter Remains Below a Year Ago

MILK

The decline in cheese and butter prices was not welcomed by traders triggering heavy selling. Most Class III futures contracts eliminated the gains realized last week. Class IV futures were under pressure but not as much as Class III. Those contracts that traded lower moved to the bottom end of the range they had been in. The October Milk Production report does not provide a bullish picture for milk prices for the rest of the year and early next year. The substantial increase in cow numbers from September ensures sufficient milk production will be available to bottlers and manufacturers.

USDA released the October Livestock Slaughter report showing the level of dairy cattle slaughter. Slaughter totaled 235,600 head which was an increase of 25,200 head from September. This was down 7,300 head from October 2023. This indicates the gain in cow numbers in October according to the milk production report was due to more cows entering the milk herd. The largest increase in milk cow numbers took place in Texas with a gain of 40,000 head. This was followed by a gain in South Dakota of 17,000 head. The other states that showed gains were Colorado up 4,000 head; Idaho up 9,000 head; Iowa up 4,000 head; Kansas up 8,000 head and Washington up 2,000 head.

AVERAGE CLASS III PRICES

3 Month:	$19.00
6 Month:	$18.93
9 Month:	$18.84
12 Month:	$18.82

CHEESE

Reports are that most holiday orders have been filled with current demand varying in the regions. Fill-in demand will be ongoing moving through the Thanksgiving and Christmas seasons. Some cheese manufacturers are looking for extra milk and are having difficulty finding it for next week. However, there is expected to be a greater supply of spot milk available next week as schools will be closed for Thanksgiving.

BUTTER

More cream will be available for butter production next week as many plants will reduce churning for the Thanksgiving holiday. Butter supplies are sufficient for demand with some building inventory to have a cushion on hand moving through the end of the year. Food service demand remains less robust than usual and less than anticipated for this time of year.

OUTSIDE MARKETS SUMMARY

December corn closed down 3.50 cents per bushel at $4.2675, January soybeans closed down 12.75 cents at $9.7775 and December soybean meal closed down $1.70 per ton at $287.70. March Chicago wheat closed down 2.75 cents at $5.6950. February live cattle closed down $0.50 at $187.43. January crude oil is up $1.35 per barrel at $70.10. The Dow Jones Industrial Average is up 462 points at 43,870 with the NASDAQ up 6 points at 18,972.

Thursday Midday Dairy Market Summary - Cheese Prices Fall

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	10 Lower
SOYBEAN MEAL:	$1.70 Lower
LIVE CATTLE:	$0.47 Lower
DOW JONES:	539 Points Higher
NASDAQ:	40 Points Higher
CRUDE OIL:	$1.03 Higher

MIDDAY MARKET UPDATE:

The recent strength of block cheese was nearly wiped-out Thursday with barrels giving back all of it. The block cheese price fell by 4.25 cents closing at $1.6825 with only one load traded, and uncovered offers for five loads remaining at the close. The barrel cheese prices fell 5 cents closing at $1.68 with three loads traded with no bids or offers remaining at the close. The dry whey price increased by 0.75 cents closing at 64.75 with three loads traded. Class III futures are 5 to 49 cents lower with January posting the greatest loss. The butter price slipped 0.25 cent closing at $2.5475 with no loads traded. There was an unfilled bid way down at $2.45 and three uncovered offers remaining at the close. The low bid is a concern as that was the area of interest, which could mean butter price may decline further. Grade A nonfat dry milk declined 2 cents closing at $1.38 with six loads traded. Class IV futures are steady to 38 cents lower. Butter futures are 0.02 cent higher to 3.00 cents lower. Dry whey futures are 0.32 cent lower to 0.75 cent higher. The USDA will release the October Livestock Slaughter report Thursday afternoon and will show the volume of dairy cattle slaughter for the month.

Fluid Milk and Cream - Western U.S. Report 47

In California, handlers convey milk production is trending slightly higher over the last few weeks. However, handlers also indicate November 2024 milk output is down compared to November 2023 milk output. Stakeholders indicate the monthly milk production increase for November compared to October in 2024 is thus far below what is typically expected. Manufacturers note some open processing capacity is available, and spot milk loads are tight. Class I demand is stronger. Class II, III, and IV demands are steady. 

In Arizona, week-to-week milk production is strengthening. Stakeholders indicate spot milk availability remains on the tight end of the spectrum. Demand for Class I milk is stronger, while demands for Class II, III, and IV milk are steady. 

Farm level milk output in New Mexico is stronger. Manufacturers indicate milk volumes are sufficient for production needs, but spot loads are not abundantly available. Demands for all Classes are unchanged. 

Handlers in the Pacific Northwest convey steady milk production. Handlers also indicate cow comfort is better than typical expectations for the season thus far. Stakeholders convey milk volumes are in good balance with manufacturing needs. Demands for all Classes are steady. 

Farm level milk output is strengthening in the mountain states of Idaho, Utah, and Colorado. Stakeholders note looser spot milk availability for this part of the region compared to the rest of the West. Spot loads are available for buyers to secure. All Class manufacturing demands are steady. 

Despite some stakeholders conveying slightly stronger cream demand, cream multiples ticked lower on the top end of both ranges this week as cream volumes remain readily available throughout most of the region. Condensed skim milk availability is looser and condensed milk demand is in line with recent weeks.

Thursday Morning Dairy Market Update - Milk Production Report Pressures Futures

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

MILK:

Overnight milk futures are lower due to the bearish implications of the milk production report released on Wednesday. The significant revision of September milk production and the substantial increase in cow numbers was a surprise. It indicates milk may remain strong and more cows will be milked than anticipated. The large increase of 19,000 cows from September with the nation's dairy herd at 9.365 million head is 10,000 more than a year ago. This is the first month of cow numbers this year that were higher than the previous year. The USDA will release the October Livestock Slaughter report Thursday afternoon, and it is expected to show lower dairy cattle slaughter.

CHEESE:

Milk futures will move in the direction provided by spot trading Thursday. Cheese buyers may not step back due to the bearishness of the milk production report. After all, the milk produced in October has already been consumed, processed or stored. Buyers might be interested in taking advantage of the current low prices and purchase for expected demand.

BUTTER:

The butter price continues to exhibit weakness, as inventory is sufficient and churning active. Cream supplies are heavier than expected for this time of year. Churns are running full schedules to utilize as much cream as possible with some plants tuning down cream offers. The increased trading activity on the spot market on Wednesday may indicate the price has reached a level at which buyers will be more aggressive.

Wednesday Closing Dairy Market Update - October Milk Production Up 0.2%

MILK

Class III futures closed higher, but those gains will need to be supported by underlying cash or further pressure could surface. USDA released the October Milk Production report today showing an increase in milk production. Production in the top 24 states totaled 18.0 billion pounds, up 0.4% from October 2023. September revised milk production to 0.5% from the previous year, up from a gain of 0.2% as they reported last month. This is the second month of a significantly higher revision. Milk production per cow averaged 2,013 pounds, up 4 pounds from a year ago. Cow numbers increased by 16,000 head from September. The U.S. milk production increased by 0.2% from the previous year totaling 18.7 billion pounds. Production per cow was 3 pounds higher than a year ago. Cow numbers were 19,000 head more than in September and were up 10,000 head than a year ago. The increase in cow numbers is impressive given the tight heifer replacement numbers and the impact of bird flu on dairy farms. This report is not friendly to the market in the long term as this could mean higher milk output.

AVERAGE CLASS III PRICES

3 Month:	$19.32
6 Month:	$19.24
9 Month:	$19.09
12 Month:	$19.04

CHEESE

The block cheese price has increased for four consecutive days which has not been seen for quite some time. This may not mean the trend has changed but it may indicate buyers want to take advantage of the low prices. However, there may be limited upside price potential as buyers are unconcerned over the supply. The bearish implications of the milk production report may solidify their complacency.

BUTTER

Plentiful cream supplies keep churns running on full schedules utilizing as much cream as possible. This leaves sufficient butter available for demand limiting the decrease in inventory. Butter stocks are 11% higher than a year ago according to the September Cold Storage report released last month. USDA will release the October Cold Storage report on Monday. Butter is under pressure with the current price below where it was at the beginning of the year.

OUTSIDE MARKETS SUMMARY

December corn closed up 3.00 cents per bushel at $4.3025, January soybeans closed down 8.00 cents at $9.9050 and December soybean meal closed up $.80 per ton at $289.40. December Chicago wheat closed up 2.75 cents at $5.5250. February live cattle closed down $0.08 at $187.93. January crude oil is down $0.49 per barrel at $68.75. The Dow Jones Industrial Average is up 140 points at 43,408 with the NASDAQ down 21 points at 18,966.

October Milk Production up 0.4 Percent

October Milk Production up 0.4 Percent        

Milk production in the 24 major States during October totaled 18.0 billion pounds, up 0.4 percent from October 2023. September revised production, at 17.5 billion pounds, was up 0.5 percent from September 2023. The September revision represented an increase of 52 million pounds or 0.3 percent from last month's preliminary production estimate.  Production per cow in the 24 major States averaged 2,013 pounds for October, 4 pounds above October 2023.   The number of milk cows on farms in the 24 major States was 8.92 million head, 21,000 head more than October 2023, and 16,000 head more than September 2024.   

October Milk Production in the United States up 0.2 Percent  

Milk production in the United States during October totaled 18.7 billion pounds, up 0.2 percent from October 2023.  Production per cow in the United States averaged 1,996 pounds for October, 3 pounds above October 2023.  The number of milk cows on farms in the United States was 9.37 million head, 10,000 head more than October 2023, and 19,000 head more than September 2024. 

Wednesday Midday Dairy Market Summary - Butter Continues to Slide

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	7 Lower
SOYBEAN MEAL:	$0.90 Higher
LIVE CATTLE:	$0.15 Lower
DOW JONES:	126 Points Lower
NASDAQ:	181 Points Lower
CRUDE OIL:	$0.33 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 0.25 cent closing at $1.7250 with four loads traded. This is the fourth consecutive day of gain. The barrel cheese price increased by 0.50 cent closing at $1.73 with two loads traded. There was an unfilled bid and uncovered offer remaining in each category. The dry whey price remained unchanged at 64 cents with one load traded. Class III futures are 8 to 19 cents higher. The butter price declined 3.25 cents closing at $2.55 with 12 loads traded. This is another new low and the lowest price since Jan. 23. The price is lower than it was at the beginning of the year and at the level it was during the first half of January. Grade A nonfat dry milk remained unchanged at $1.40 with no loads traded. Class IV futures range from 5 cents lower to 5 cents higher. Butter futures are 0.12 -- 2.35 cents lower. Dry whey futures activity has been confined to the January contract at 0.50 cent higher. The USDA will release the October Milk Production report Wednesday afternoon. I estimate milk production to be 0.2% above a year ago with cow numbers up 3,000 head from September. Milk production should have remained strong compared to a year ago. 

Wednesday Morning Dairy Market Update - October Milk Production Report Today

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	6 to 8 Lower
Soybean Meal Futures:	$0.50 to $1 Lower
Wheat Futures:	3 to 4 Lower

MILK:

The large decline in milk futures on Tuesday seemed to be a reaction to the weakness of barrel cheese and not the overall market. The gain in the block price more than offset the loss of barrels. Traders will be cautious on Wednesday, and those who sold the market on Tuesday may buy back those positions today if they have some profit. Traders are not trading positions for the long term but continue to scalp the market in hopes of making small profits. The USDA will release the October Milk Production report Wednesday. I estimate milk production to be 0.2% above a year ago with cow numbers up 3,000 head from September. Milk production should have remained strong compared to a year ago.

CHEESE:

Cheese prices could go either way today based on Tuesday's action. The weakness of barrels may have been sellers wanting to move supply more aggressively finding buyers at the lower price. It may not be that the price has reached a threshold. Further upside may be seen in blocks as buyers seemed to have turned more aggressive realizing they need to take advantage of these lower prices.

BUTTER:

The butter price may continue to struggle as the supply is larger than last year with production running higher than last year. Retail demand is improving as the holiday season approaches. Food service demand is lighter and not expected to improve much in the near term.

Tuesday Closing Dairy Market Update - Milk Futures Close Under Pressure

MILK

Class III milk futures saw substantial price swings from overnight trade to the closing of the day trade. Traders took advantage of the price swings as they tried to take a small profit from the market. It is uncertain whether futures had been overdone to the upside the past two days and now the market corrected or if the selling pressure resulted from those who purchased futures last week and have decided to take profits today. The underlying spot price movement should not have triggered the heavy selling it did. Traders seem to focus on the weakness rather than the overall price calculation of the movement.

The Global Dairy Trade Auction trade-weighted average increased by 1.9%. There were 36,244 metric tons of dairy products sold at an average price of $4,089 per metric ton. Anhydrous milk fat increased 1.0% to $7,633 per metric ton or $3.46 per pound. Butter increased 0.5% to $7,009 per metric ton or $3.18 per pound. Cheddar cheese decreased 3.1% to $4,834 per metric ton or $2.19 per pound. Mozzarella decreased 6.6% to $4,315 per metric ton or $1.96 per pound. Skim milk powder increased 0.9% to $2,882 per metric ton or $1.31 per pound. Whole milk powder increased 3.2% to close at $3,826 per metric ton or $1.74 per pound.

AVERAGE CLASS III PRICES

3 Month:	$19.28
6 Month:	$19.15
9 Month:	$19.01
12 Month:	$18.96

CHEESE

The concern is that cheese prices may have reached the top due to the weakness of barrels. This may be the case, or it may just be buyers and sellers doing business with sellers taking advantage of the price strength over the past two days. Traders magnified the weakness of barrels rather than looking at the possible support indicated by stronger blocks. Whether the market was overdone to the downside today or not, volatility will remain substantial through the end of the year.

BUTTER

Traders were bearish on butter, pushing futures lower as the prices may see further weakness. Demand is not as strong as anticipated, and supplies are ample to meet demand. The price may weaken to the level it was at the end of last year. Buyers continue to purchase supply without having to chase the market higher.

OUTSIDE MARKETS SUMMARY

December corn closed down 2.00 cents per bushel at $4.2725, January soybeans closed down 11.25 cents at $9.9850 and December soybean meal closed down $1.70 per ton at $288.60. December Chicago wheat closed up 2.50 cents at $5.4975. February live cattle closed up $2.03 at $188.00. January crude oil is up $0.07 per barrel at $69.24. The Dow Jones Industrial Average is down 121 points at 43,269 with the NASDAQ up 196 points at 18,987.

Friday Midday Dairy Market Summary - Butter and Cheese Prices Bounce

OUTSIDE MARKETS SUMMARY:

CORN:	6 Higher
SOYBEANS:	15 Higher
SOYBEAN MEAL:	$2.70 Higher
LIVE CATTLE:	$0.02 Lower
DOW JONES:	344 Points Lower
NASDAQ:	491 Points Lower
CRUDE OIL:	$1.83 Lower

MIDDAY MARKET UPDATE:

What was mentioned in Friday morning's comments as a possibility has come to fruition. Overnight futures were lower and turned higher as spot prices increased. The pattern for over a week was that overnight contracts were higher and then turned lower during the day. There is no science to this, and it was just a hunch, but it did take place and is welcomed. The block cheese price increased 3.50 cents, closing at $1.6925 with four loads traded. The barrel cheese price increased 1.25 cents closing at $1.6850 with one load traded. There was an unfilled bid in each category with an uncovered offer in each remining at the close. The dry whey price remained unchanged at 65.50 cents with no loads traded. Class III futures are 18 cents lower to 37 cents higher. The butter price increased 3 cents, closing at $2.63 with four loads traded. Nonfat dry milk slipped 0.50 cent closing at $1.40 with nine loads traded. Class IV futures are steady in the January contract, which is the only one traded so far. Butter futures are 1.67 cents lower to 4.97 cents higher. Dry whey futures are 0.67 cent lower to 0.02 cent higher.

Friday Morning Dairy Market Update - Milk Futures Could Find Support

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	7 to 9 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	3 to 4 Higher

MILK:

Milk futures continued to show weakness on Thursday and in the overnight trade. The recent pattern has been strength in the overnight trade with weakness developing during the day trade. Maybe this will change with weakness overnight finding some buying interest during the day. However, this would need support from steady or higher cash prices. Ample supplies of cheese and butter have kept sellers aggressively offering it on the spot market to manage the build of inventory. Milk production is increasing seasonally but continues to increase at a slower pace. Bottling demand is steady with retail demand increasing but at a slower pace than usual.

CHEESE:

Cheese prices have yet to find support. Cheese continues to be offered on the spot market with the block price declining 11 of the past 13 days. As long as sellers remain aggressive, buyers will hold back and purchase as needed. Manufacturers are not interested in building inventory and want to move supply before the end of the year.

BUTTER:

Butter may move to a lower trading range as inventory exceeds a year ago and active churning limits the decline of inventory ahead of the holidays. Some churns are turning down cream offers as they are already running at capacity. Retain demand is increasing but fold service demand is lacking.

Thursday Closing Dairy Market Update - Non-dairy Sales Fall Significantly Over the Past Year

MILK

Milk production is showing signs of improving, as the weather has been good for cow comfort. The milk production is not burdensome, but what is available for bottling and manufacturing is sufficient for needs. Even though cheese inventory is below a year ago, manufacturers want to limit inventory and continue to offer cheese to the market. Sellers continue to offer cheese lower on the spot market with buyers purchasing on the weakness, seeing no need to become aggressive. USDA will release the October Milk Production report next week, and it might show output slightly above a year ago. Market research firm Circana reports that in U.S. multi-outlets and convenience stores for the 52 weeks ending Aug. 11, the overall milk category, comprising refrigerated milk, refrigerated alternative milk, "all other" refrigerated milk, and non-dairy refrigerated milk, notched $19.6 billion in dollar sales at a slight 1.2% decrease over the prior year. In the "all other" refrigerated milk segment, however, there was a 21.2% growth and $252 million in sales, according to an article released by "Dairy Foods" publication. They also reported that the $4.4 billion refrigerated non-dairy segment showed declining year-over-year sales of 53%, while units plummeted 65% to 1.3 billion. Refrigerated alternative milks, with sales of $2.5 billion and units of 636 million, slumped 5.2% and 5.5%, respectively.

AVERAGE CLASS III PRICES

3 Month:	$18.97
6 Month:	$18.86
9 Month:	$18.72
12 Month:	$18.71

CHEESE

Milk is adequate for production needs. Demand is increasing from retail outlets but continues to remain steady to slightly weaker from the food service industry. This is not expected to change by the end of the year. The inability to improve at this time of year does not bode well for milk prices moving through the end of the year and potentially the early part of next year when demand is slower.

BUTTER

Cream supply is heavier than usual for this time of year with churns running on full schedules. Plants are working to build inventory for expected holiday demand but already have a higher inventory than a year ago. Plants are not concerned over the abundant supply at this point, but it may be a greater issue once the holidays are over. Contracts are being made for the first quarter of 2025 as the price is back down to the level it was a year ago.

OUTSIDE MARKETS SUMMARY

December corn closed down 7.50 cents per bushel at $4.1900, January soybeans closed down 20.25 cents at $9.8750 and December soybean meal closed down $4.60 per ton at $287. December Chicago wheat closed down 10.75 cents at $5.3025. December live cattle closed down $1.08 at $182.95. December crude oil is up $0.27 per barrel at $68.70. The Dow Jones Industrial Average is down 207 points at 43,751 with the NASDAQ down 123 points at 19,108.

Dairy producers see margin relief

Margins for dairy producers have improved due to lower feed costs. Corn prices fell below $4 per bushel for most of August, September, and October. Other feed costs, including soybean meal, hay, and almond hulls, have also decreased. Milk prices have steadily increased since April, helping dairies pay down debts or reinvest, though expansion is minimal. Many dairies have increased crossbreeding with beef breeds, boosting income but reducing dairy replacement heifers. With the U.S. heifer inventory at historic lows, it will take time for herds and milk production to grow, even with better margins.

In 2025, milk production is expected to rise slightly. Dairy prices, including Class III and IV milk, are expected to fall below 2024 levels. However, futures markets suggest margins will remain positive, with the USDA forecasting a 2025 All-Milk price of $22.75 and stable feed costs. This will offer producers the chance to use risk management tools to lock in profitable margins.

Highly Pathogenic Avian Influenza (HPAI) has rapidly spread through California, affecting over 278 herds in two months. Analysts suggest HPAI could infect more than half of California's herds, similar to the 59% of herds impacted in Colorado. Milk production in affected states fell between 1% and 2.6% during the worst of the outbreak. Despite those production losses, milk prices have remained stable, likely due to ample butter and cheese inventories. If the infection rate in California affects 50% of state herds, national milk production could drop by 0.5%, potentially boosting prices temporarily.

A large national coffee chain has removed the upcharge for non-dairy milk alternatives, saving customers 70 to 90 cents per order. As non-dairy milk alternatives become more accessible and affordable, demand for traditional dairy products may decrease. Sales of plant-based milk alternatives have grown to $2.9 billion annually, with plant-based creamers also growing, grossing over $700 million annually. The removal of the upcharge could accelerate this trend, leading to a further decline in fluid milk sales.

Dairy: Breakeven profitability - Bullish 12-month outlook

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

Thursday Midday Dairy Market Summary - Cheese Continues to Grind Lower

OUTSIDE MARKETS SUMMARY:

CORN:	7 Lower
SOYBEANS:	19 Lower
SOYBEAN MEAL:	$4.00 Lower
LIVE CATTLE:	$1.12 Lower
DOW JONES:	178 Points Lower
NASDAQ:	55 Points Lower
CRUDE OIL:	$0.16 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 3.25 cents closing at $1.6575 with one load traded. The barrel cheese price declined 0.75 cent closing at $1.6725 with no loads traded. Only an uncovered offer for a load of barrels remained at the close. Blocks have declined 11 of the past 13 days, moving the price to the lowest level since April 18. The dry whey price jumped 3.25 cents, closing at 65.50 cents with four loads traded. This is a new high for the year and moved to the highest level since March 31, 2022. Class III futures are 2 to 16 cents lower. The butter price declined 3 cents, closing at $2.60 and nearly eliminating the gain of Wednesday. There were three loads traded with four unfilled bids and three uncovered offers remaining at the close. The Grade A nonfat dry milk price gained 1.50 cents closing at $1.4050 with 17 loads traded. The price is at a new high for the year. Class IV futures are unchanged to 14 cents lower. Butter futures are 0.05 -- 2.00 cents lower. Dry whey futures are 0.27 -- 1.50 cents higher.

Fluid Milk and Cream - Western U.S. Report 46

In California, handlers convey milk production differences varying from somewhat stronger to somewhat weaker this week compared to the prior week. In some cases, handlers indicate milder weather has positively impacted cow comfort and milk production. On the flip side, some other handlers indicate non-weather factors have negatively impacted milk production. Spot milk load availability is tight. Manufacturers report plenty of processing capacity is available throughout the state. Demands for all Classes are steady. 

Milk production in Arizona is strengthening. However, handlers also indicate year-over-year milk output continues to be down. Like in California, spot load milk availability is tight. All Class manufacturing demands are steady. 

In New Mexico, farm level milk output is strengthening as well. Stakeholders indicate spot milk loads are not plentiful, but ample for production needs. All Class demands are steady. 

Handlers in the Pacific Northwest describe milk production as steady and in-line with anticipated volumes this week. Stakeholders convey traditionally colder temperatures have not begun, but some parts of the area have received small amounts of snowfall. Manufacturers note milk volumes are in good balance with processing capacities. Class I, II, III, and IV, demands are steady. 

Farm level milk output in the mountain states of Idaho, Utah, and Colorado is noted as steady or stronger. Stakeholders indicate comparatively looser spot milk availability in the mountain states than the rest of the West region, and some spot milk loads continue to move into the Midwest. Demands for all Classes are unchanged. 

Cream volumes continue to generally be far from the short end of the spectrum. However, with some tighter cream availability in the southwest portion of the region compared to the prior week, cream multiples on the top end ticked higher. Cream demand is mixed. Condensed skim milk demand is steady, while availability is generally tighter in the southwest portion of the region compared to rest of the West.

Thursday Morning Dairy Market Update - Milk Futures May Remain Under Pressure

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk prices continue to erode with all Class III contracts below $19.00. The exception is the nearby November as much of the contract is priced and will remain close to $20.00. The market fundamentals have not changed much, leaving traders taking short-term positions and liquidating them when they have a profit. Without support from underlying cash, there is little interest in buying futures for the long term. Milk production is variable with some plants indicating a slight increase in milk receipts while others report milk production remaining flat. The weather has been mild and good for cow comfort which is improving production per cow.

CHEESE:

Cheese is struggling to find support. Buyers have sufficient supply on hand and see sufficient production keeping them complacent over supply throughout the rest of the year. Buyers continue to hold back as sellers remain aggressive continuing to move cheese rather than hold it.

BUTTER:

Butter may develop a lower trading range. The supply of bulk butter is sufficient as a large volume went into storage earlier in the year. Buying is done as orders are placed that need to be filled in a short period of time. Previously contracted orders have been filled or supply already in place to fulfill those contracts.