Tuesday Closing Dairy Market Update - November Average Milk Futures Prices Indicate Strong Income Over Feed Price

MILK:

Most areas of the country report steady to higher milk output. Not compared to a year ago but compared to previous weeks. Milk production is running below a year ago leaving little concern over processing capacity. The holiday demand is behind, and schools will be reopening soon. This will increase bottling demand again. The USDA released the November Agricultural Prices report today. The average corn price was $4.07 per bushel, up $0.08 from October but down $0.56 from November 2023. The premium/supreme hay price averaged $235.00 per ton down $1.00 from October and down $36.00 per ton from a year ago. The All-milk price was $24.20 per cwt, down $1.00 from October, but up $2.60 from November 2023. The average soybean meal price has not been released. That is the missing price used to determine income over feed for the Dairy Margin Coverage program. Other prices of interest are the soybean price average of $9.84, down $0.07 per bushel from October and down $3.16 from a year ago, and the alfalfa hay price of $165.00 per ton, down $8.00 from October and down $44.00 from November 2023.

AVERAGE CLASS III PRICES:

3 Month:	$20.25
6 Month:	$19.76
9 Month:	$19.53
12 Month:	$19.34

CHEESE:

Cheese prices were steady to higher, but Class III futures closed under significant pressure. The selling was likely tied to traders liquidating ahead of the end of the year to close out their books. Spot milk prices have fared well over the holiday season with prices ranging from $0.50 -- $4.00 under class. That is unusual at this time of year as schools are closed and there is generally a lot of milk available on the spot market. If milk production continues along a similar pattern through the early part of 2025, we could see stronger milk prices.

BUTTER:

The butter price declined in the first two days of the week, but the downside is expected to be limited. The large decline in inventory in November reduced supply significantly and could result in the market following a similar pattern as last year. Full churning schedules will resume later this week with plentiful cream supplies available.

OUTSIDE MARKETS SUMMARY:

March corn closed up 6.25 cents per bushel at $4.5850, March soybeans closed up 18.75 cents at $10.1050 and March soybean meal closed up $5.10 per ton at $316.90. March Chicago wheat closed up 3.25 cents at $5.5150. February live cattle closed up $1.30 at $191.60. February crude oil is up $0.73 per barrel at $71.72. The Dow Jones Industrial Average is down 30 points at 42,544 with the NASDAQ down 176 points at 19,311.

Tuesday Midday Dairy Market Summary - Class III Milk Futures Fall Despite Cash Support

OUTSIDE MARKETS SUMMARY:

CORN:	6 Higher
SOYBEANS:	14 Higher
SOYBEAN MEAL:	$3.50 Higher
LIVE CATTLE:	$1.15 Lower
DOW JONES:	125 Points Lower
NASDAQ:	177 Points Lower
CRUDE OIL:	$0.84 Higher

MIDDAY MARKET UPDATE:

The block cheese price remained steady at $1.91 with two loads traded. The barrel cheese price increased by 1.75 cents closing at $1.8250 with no loads traded. An unfilled bid for a load of barrels and an uncovered offer for a load of blocks remained at the close. The dry whey price remained unchanged at 75 cents. Class III futures were higher ahead of spot trading but came under significant pressure after spot trading with contracts from 37 cents lower to 1 cent higher. This price activity was unexpected along with a substantial increase in trading volume. The February contract has over 1,100 contracts traded so far today. The butter price decreased by 2.00 cents closing at $2.55 with no loads traded and four uncovered offers remaining at the close. Grade A nonfat dry milk decreased 0.75 cent closing at $1.3750 with seven loads traded. Class IV futures are 10 cents lower to 24 cents higher with trading activity confined to the January and February contacts. Today is the last trading day for December futures and options. The November Agricultural Prices report will be released this afternoon.

Tuesday Morning Dairy Market Update - Higher Cheese Prices Anticipated

OPENING CALLS:

Class III Milk Futures:	4 to 10 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Class III milk futures have performed well over the past few weeks, supported by the strength of cheese prices. This improves the price outlook for the upcoming year unless demand slows more than usual. Milk production is strong but not as strong as in previous years. Heifer prices continue to increase and are limiting expansions. Milk production per cow declined substantially in November but is expected to have recovered somewhat in December. The continued impact of bird flu remains a concern for the industry. Most processors indicate they have a sufficient milk supply and are not concerned. Current spot milk prices are as much as $8.00 below class. That will change over the next few weeks as schools will be back in session and demand will return to the pre-holiday normal. Today is the last day to trade December futures and options, with the Federal Order prices to be announced on Thursday. USDA will release the November Agricultural Prices report this afternoon.

CHEESE:

Cheese prices could see further gains today as the price increases seem to be bringing more buyers into the market. The buyers want to take advantage of the lower prices and are bidding aggressively. However, trading volume has been light limiting the amount of cheese that they have been able to purchase at lower prices. There may be a void developing under the market as the current fundamentals do not suggest supplies will tighten.

BUTTER:

The butter price is expected to drift for a period as holiday demand is over and buying for the first quarter has been ongoing. Butter production has been disrupted over the past week resulting in heavy cream supplies being available to the market. Butter supplies at the end of the year will be similar to those from a year ago and will be supportive of the market.

Monday Closing Dairy Market Update - Class III And Class IV Milk Futures Diverge

MILK:

It was not expected to be a high-volume trading day with limited price volatility. However, the opposite was true due to the strength in underlying cheese prices and the slight weakness of butter and nonfat dry milk. Class III futures showed moderate trading activity after spot cheese prices increased and traders began buying more aggressively. December futures and options will end on Tuesday with the December Federal Order prices to be announced on Thursday. Traders anticipate a December Class III price of $18.71 and a Class IV price of $20.75. The January Class III contract will take over as the lead month with a price of about $1.80 higher. The January Class IV price will be about 30 cents higher than where the December contract will end. Both contracts are significantly better than they were a month ago. The USDA will release the November Agricultural Prices report on Wednesday. This provides most of the prices used in calculating income over feed for the Dairy Margin Coverage program. The FSA may not release the soybean meal price until Thursday.

AVERAGE CLASS III PRICES:

3 Month:	$19.99
6 Month:	$19.93
9 Month:	$19.66
12 Month:	$19.48

CHEESE:

Cheese buyers were aggressive with a desire to increase ownership before the end of the year. The increase in prices may bring more buyers into the market as they will be willing to purchase ahead of further price increases. Fundamentally, the market is not bullish, but prices are building support. More milk has been available for manufacturing due to schools being closed. Lower spot milk prices show that there are plentiful milk supplies.

BUTTER:

Class IV futures were mostly lower due to the weakness of cheese and nonfat dry milk. Trading activity was light and not representative of a true correlation with the underlying cash. Butter inventory declined substantially in November. Recent reports have indicated that inventory is beginning to build due to heavy cream supplies and steady to slowing demand.

OUTSIDE MARKETS SUMMARY:

March corn closed down 1.75 cents per bushel at $4.5225, March soybeans closed up 2.00 cents at $9.9175 and March soybean meal closed up $1.30 per ton at $311.80. March Chicago wheat closed up 1.75 cents at $5.4825. February live cattle closed down $0.35 at $190.30. February crude oil is up $0.53 per barrel at $71.13. The Dow Jones Industrial Average is down 418 points at 42,574 with the NASDAQ down 235 points at 19,487.

Monday Morning Dairy Market Update - Light Trading Volume Expected

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	4 to 6 Higher
Soybean Meal Futures:	$3 to $5 Higher
Wheat Futures:	1 to 2 Higher

MILK:

Milk futures settled back somewhat overnight despite higher cash on Friday. Trading was confined to the January and February Class III contracts. It is another holiday-shortened week, and many have limited volume Monday and Tuesday. Tuesday will be the last trading day for December futures and options with the Federal Order prices announced on Thursday. The November Agricultural Prices report will be released on Tuesday, providing most of the prices used in calculating income over feed for the Dairy Margin Coverage program. The markets will be closed on Wednesday.

CHEESE:

Cheese prices have been able to hold the recent higher prices. The lows seem to have been established as holiday demand is finished and buyers look ahead to first-quarter demand. Low prices made it attractive to purchase cheese to rebuild inventory. Prices may have limited upside potential as demand is slower during the early part of the year.

BUTTER:

The low for butter may have been established due to strong demand through the end of the year, reducing inventory significantly. This may provide support as buyers look ahead to first-quarter demand. The price may follow a similar pattern as last year with buyers purchasing on an ongoing basis to satisfy demand and to purchase ahead for contracted orders. The price is reasonable, and buyers want to take advantage of it.

Friday Closing Dairy Market Update - Spot Milk Prices Showed Limited Changes This Week

MILK:

Milk availability is higher and will remain that way for another week or so as milk is diverted from school accounts. Spot milk is running as much as $7.00 below class. However, that is an improvement over a year ago when spot milk was as much as $11.00 below class in some locations. Milk production is running below a year ago and the likely reason spot milk prices are a bit better than a year ago. Dairy Market News reported that milk production in California is seeing increases week-over-week. It will be interesting to see the level of milk production for December. The state continues to wrestle with bird flu affecting many dairy farms. It is likely production has increased from the low levels of November when production fell 9.2%. Next week will be another holiday-shortened week with Tuesday the last day to trade December futures and options.

AVERAGE CLASS III PRICES:

3 Month:	$19.73
6 Month:	$19.77
9 Month:	$19.53
12 Month:	$19.37

CHEESE:

For the week, blocks increased by 2 cents with six loads traded. The average price for the week is $1.8613. Barrels increased by 0.75 cent, with eight loads traded. The average price for the week was $1.74. Dry whey increased by 1 cent with two loads traded. The average price for the week is 74.25 cents. Cheese demand varied with some indicating tight spot supplies due to steady demand. Inventory remains below a year ago and is not expected to catch up to the previous year anytime soon.

BUTTER:

For the week, butter gained 2 cents with 12 loads traded. The average price for the week is $2.5694. Grade A nonfat dry milk slipped 0.50 cent with 10 loads traded. The average price for the week is $1.3888. This week's price changes in all spot categories have had the least movement in quite some time.

OUTSIDE MARKETS SUMMARY:

March corn closed up 0.25 cent per bushel at $4.5400, March soybeans closed down 7.50 cents at $9.8975 and March soybean meal closed down $4.40 per ton at $310.50. March Chicago wheat closed up 5.50 cents at $5.4650. February live cattle closed up $0.55 at $190.65. February crude oil is up $0.98 per barrel at $70.60. The Dow Jones Industrial Average is down 334 points at 42,992 with the NASDAQ down 298 points at 19,722.

Friday Midday Dairy Market Summary - Light Trading Activity Magnifies Movement

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$0.90 Lower
LIVE CATTLE:	$0.25 Lower
DOW JONES:	393 Points Higher
NASDAQ:	76 Points Higher
CRUDE OIL:	$0.86 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 1.25 cents closing at $1.8725 with five loads traded. The barrel cheese price increased 2.75 cents closing at $1.7675 with five loads traded. There were three unfilled bids for loads of blocks with no uncovered offers remaining at the close. There were two unfilled bids for loads of barrels with one uncovered offer. The dry whey price increased a penny closing at 75 cents with one load traded. Class III futures are steady to 56 cents higher. The lighter trading activity is magnifying the movement of futures. The butter price remained unchanged at $2.5750 with no loads traded. Grade A nonfat dry milk increased by 0.50 cent closing at $1.3875 with three loads traded. Class IV futures have not yet been traded. Butter futures are 3.45 cents lower to 2.00 cents higher. Dry whey futures are 0.30 cent lower to 1.50 cents higher.

Friday Morning Dairy Market Update - Limited Movement Expected During Spot Trading

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:	2 to 4 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	2 to 4 Lower

MILK:

Trading activity in milk futures is expected to be light again today. Limited movement in the underlying cash will keep traders complacent. Traders that have been scalping the market for a quick profit may remain sidelined as they see limited opportunity for price movement. The milk supply is abundant for processing as schools are closed and milk is diverted to manufacturing facilities. Milk production continues to increase seasonally and due to good weather. Milk production is lower than a year ago but demand has been lighter than anticipated leaving the market balanced and prices at the current levels.

CHEESE:

Cheese prices are not expected to move very much today or through the end of the year. Buyers and sellers are comfortable at current prices. More milk is available for manufacturers through the holiday season with more fresh cheese available to the market. Buyers may not be aggressive as supply is sufficient and demand tends to slow during the first part of the year.

BUTTER:

Butter price is expected to drift through the end of the year. The large decline in inventory in November should provide support to the price and limit the downside. It may be too early for buyers to turn more aggressive as they have already been preparing for expected first-quarter needs.

Thursday Closing Dairy Market Update - Trading Activity Light, FDA Redefines "Healthy"

MILK:

Dairy Foods magazine reports the Food and Drug Administration (FDA) issued a final rule to update the definition of the nutrient content claim "healthy". To qualify as "healthy" under the updated definition, food products must contain a certain amount of food from at least one of the food groups or subgroups outlined by the Dietary Guidelines for Americans, including fruits, vegetables, protein foods, dairy and grains. Foods that qualify for the "healthy" claim must also meet certain limits on saturated fat, sodium, and added sugars. Roberta Wagner, senior vice president of regulatory and scientific affairs at the International Dairy Foods Association (IDFA), released the following statement in response to the FDA's final rule defining "healthy": "With this rule, the FDA missed an important opportunity to help shoppers at all income levels choose healthier food options for their families. Instead, the rule is so narrow that few foods, including many nutrient-dense dairy products, will be able to bear the claim. FDA notes that 79% of Americans are not eating enough dairy or getting dairy's 13 essential nutrients, and yet this new rule puts nutritious dairy further out of reach for Americans of all backgrounds and income levels. We recommend FDA rethink their approach to ensure a wide variety of nutrient-dense foods accessible to Americans from all backgrounds can bear the claim. We urge the FDA to re-open this rule for comment with the intent of creating practical policy that benefits all people and families." This needed to be passed on to make everyone aware of some of the subtle policies that can take place that can have a significant impact over time.

AVERAGE CLASS III PRICES:

3 Month:	$19.39
6 Month:	$19.45
9 Month:	$19.30
12 Month:	$19.17

CHEESE:

Spot cheese prices remained steady providing no direction to the market. This pattern may continue through the rest of the year. More milk is available for processing, keeping a sufficient supply of fresh cheese available for demand. The positive aspect is that the recent price increase is being maintained. Buyers and sellers seem comfortable at the current price level.

BUTTER:

The low has been established for butter supported by the substantial decline in inventory in November. The butter supply may close the year closely aligned with what it was at the close of 2023. The cream supply has been heavy but has been readily absorbed in the market. The price is expected to have a limited downside.

OUTSIDE MARKETS SUMMARY:

March corn closed up 5.25 cents per bushel at $4.5375, March soybeans closed up 16.00 cents at $9.9725 and March soybean meal closed up $13.30 per ton at $314.90. March Chicago wheat closed up 6.25 cents at $5.4100. February live cattle closed up $2.73 at $190.10. February crude oil is down $0.45 per barrel at $69.65. The Dow Jones Industrial Average is up 29 points at 43,326 with the NASDAQ down 11 points at 20,020.

Thursday Midday Dairy Market Summary - Cash and Futures Show Little Interest

OUTSIDE MARKETS SUMMARY:

CORN:	4 Higher
SOYBEANS:	12 Higher
SOYBEAN MEAL:	$12.90 Higher
LIVE CATTLE:	$2.00 Higher
DOW JONES:	25 Points Higher
NASDAQ:	Unchanged
CRUDE OIL:	$0.20 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remained unchanged at $1.86 and $1.74 respectively. There were no loads traded and only an offer for each posted during the trading period. The dry whey price remained unchanged at 74 cents with no loads traded. Traders did not view the steady prices as a support to the market but as a concern over the upside potential through the end of the year. Class III futures are 2 to 12 cents lower. The butter price slipped 0.50 cent closing at $2.5750 with one load traded. An unfilled bid and uncovered offer remained at the close. Grade A nonfat dry milk declined a penny closing at $1.3825 with four loads traded. Class IV futures have not yet been traded. Butter futures are 1.00 cents lower to 3.50 cents higher. Dry whey futures are steady to 0.75 cent higher.

Fluid Milk and Cream - Western U.S. Report 52

In California, some handlers indicate week-over-week milk production has been strengthening during December 2024 and continues to do so this week. However, some handlers also convey December 2024 milk output to be below anticipated volumes thus far. In terms of December 2024 year-over-year milk production, some handlers note a significant decrease thus far. Processing capacity is tighter with some facilities working in planned downtime to various degrees with end of the year holidays at hand. Spot milk load purchases at flat pricing is noted this week. Class I demand is lighter. Class II, III, and IV demands are steady. 

Farm level milk output in Arizona is stronger. However, stakeholders note spot load availability remains tight. Demand for Class I milk is lighter, while demands for all other Classes are steady. In New Mexico, some handlers indicate milk production is stronger week-over-week. All Class manufacturing demands are in line with other southern parts of the region. 

Milk production in the Pacific Northwest is noted as steady or stronger. Manufacturers convey milk volumes are ample for planned production schedules. Demands for all Classes vary from steady to lighter. 

Farm level milk output in the mountain states of Idaho, Utah, and Colorado is strengthening. Spot milk availability is somewhat looser than the pre-holiday week. Class I demand is lighter with holiday breaks at educational institutions. Class II, III, and IV demands vary from steady to lighter. 

Cream loads are widely available to start the end of year holiday stretch. Among industry participants, trading activity is quiet. Cream multiples are unchanged this week. Stakeholders convey condensed skim milk demand is lighter, as expected, and loads are available.

Secondary Sourced Information:

According to the National Agricultural Statistical Service (NASS), November 2024 total milk production was down 9.2 percent compared to November 2023 for California, and milk per cow was down by 175 pounds for November 2024 compared to November 2023 for California. 

According to NASS, November 2024 total milk production decreased by 16 million pounds compared to November 2023 total milk production for Arizona. 

According to NASS, New Mexico had the second largest decrease in total milk production when comparing November 2024 to November 2023 among the 24 selected states. 

According to NASS, Colorado had the largest increase in November 2024 total milk production compared to November 2023 total milk production among the West region states.

Thursday Morning Dairy Market Update - Light Trading Activity Expected

OPENING CALLS:

Class III Milk Futures:	2 to 6 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Light trading activity and limited volatility are expected ahead of spot trading. Traders will continue to scalp the market attempting to take a little profit with daily price movement. Cheese prices may remain choppy throughout the rest of the year while butter could show further strength as buyers look ahead to first-quarter demand. Weather has been good for cow comfort and milk production in most areas with milk receipts slowly increasing at the plant level.

CHEESE:

Cheese prices may hold at higher levels but remain choppy as buyers and sellers take care of business through the rest of the year. There may be little interest in building inventory too early leaving buyers less aggressive. Increased milk is available to manufacturers, allowing more products to be available.

BUTTER:

Butter buyers may remain aggressive as previous higher inventories have declined despite higher cream supplies and increased churning. Buyers may be willing to purchase a supply for inventory at the current price level. The bottom may be in for a while.

Tuesday Closing Dairy Market Update - Cattle Slaughter Continues to Decline

MILK:

Milk futures drifted through the day before showing some aggressive buying interest into the close. The February and March Class III contracts jumped into the close on light trading activity, posting gains of 27 and 32 cents respectively. There were no unexpected changes in the market fundamentals to support this strength. If fundamentals did change, the strength will carry through during trading after Christmas. The movement of underlying cheese prices did not support the move. Milk production continues to increase seasonally with plants having to find homes for extra milk during the holidays. This has resulted in spot milk running as much as $7.00 below class in some cases. The November Livestock Slaughter report showed dairy cattle slaughter totaling 210,300 head, down 25,300 head from October and 19,400 head below November 2023. Dairy cattle slaughter was below the previous year over the past 15 months. Slaughter for the month of November was the lowest since 2009. The market will be closed on Christmas Day and will reopen Wednesday at 5 p.m. CST.

AVERAGE CLASS III PRICES:

3 Month:	$19.41
6 Month:	$19.44
9 Month:	$19.29
12 Month:	$19.14

CHEESE:

The block cheese price has held recent gains despite holiday demand being filled. The focus of buyers has turned to the first quarter of 2025. They will also assess product movement through the holiday season as an indication of demand. There are reports that demand through the end of the year is steady to somewhat quiet as cheese has been moved to retail and food service to satisfy the expected demand.

BUTTER:

The increase in the butter price Tuesday could have been triggered by the substantial decline in butter inventory in November pulling stocks down to the same level as a year ago. This is bullish and should support the butter price near the current level. The low for the year may have been established. The outlook for 2025 is not exceptionally bullish but should be supportive. The price is expected to remain choppy for the rest of the year.

OUTSIDE MARKETS SUMMARY:

March corn closed up 0.75 cent per bushel at $4.4850, January soybeans closed up 5.75 cents at $9.7525 and March soybean meal closed up $3.60 per ton at $301.60. March Chicago wheat closed down 5.75 cents at $5.3475. February live cattle closed down $0.08 at $187.38. February crude oil is up $0.93 per barrel at $70.17. The Dow Jones Industrial Average is up 390 points at 43,297 with the NASDAQ up 266 points at 20,031.

Tuesday Midday Dairy Market Summary - Butter Finds More Aggressive Buyer Interest

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	5 Higher
SOYBEAN MEAL:	$3.40 Higher
LIVE CATTLE:	$0.17 Lower
DOW JONES:	391 Points Higher
NASDAQ:	266 Points Higher
CRUDE OIL:	$0.77 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.75 cent closing at $1.86 with one load traded. The barrel cheese price declined 1.25 cents closing at $1.74 with three loads traded. An offer remained in each at the close of trading. The dry whey price remained steady at 74 cents with no loads traded. Class III futures are 8 cents lower to 19 cents higher. The butter price increased 3.25 cents closing at $2.58 with two loads traded. There was an unfiled bid and four uncovered offers remaining at the close. Grade A nonfat dry milk remained unchanged at $1.3925 with no loads traded. Class IV futures have not been traded. Butter futures are 0.50 to 3.85 cents higher. Dry whey futures are steady in very light activity. The markets close early today and will remain closed on Wednesday for Christmas.

Tuesday Morning Dairy Market Update - Limited Trade Activity Expected

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The major reports are behind us for another month and have been factored into the market. It will be up to demand to provide market direction. Buyers of butter and cheese may hold back to assess demand through the holidays before deciding whether they need to be more aggressive. Spot milk is expected to be available at lower prices as schools are closed and some plants will run on reduced schedules. However, the milk will need to find a home and be processed. Milk production will remain steady with weather across much of the country conducive for cow comfort and milk production. Trading activity in milk futures is expected to be light. The markets will close at 12:05 p.m. CST Tuesday and will reopen at 5 p.m. CST Wednesday evening.

CHEESE:

There is not much price movement expected in the spot cheese market Tuesday. The November Cold Storage report showed a seasonal decline in inventory, but the decline was lighter than usual. American, other cheese and total cheese inventory was 7-8% below a year ago with Italian-type cheese increasing from October and was 13% above a year ago. Much of this was expected.

BUTTER:

The substantial decline in butter inventory in November may limit the downside of price moving forward. Strong butter production has been absorbed. Cream supplies have been heavy and churning active, but demand has been steady. The price may remain choppy through the rest of the year.

 

Monday Closing Dairy Market Update - Butter Inventory Declines Substantially

MILK:

Trading volume in milk futures was light with only the January and February contracts showing a few hundred contracts trading in each with only contracts showing substantially less volume. Class III futures were steady to lower through the August contract with minor gains in fourth quarter contracts. Class IV futures showed activity only in the July contract. It is a holiday week with reduced trading hours. The market will be open until 12:05 Central time on Tuesday and closed on Wednesday for Christmas. Trading activity is likely to be even lighter on Tuesday. Lighter trade could cause increased volatility if underlying cash prices showed significant movement up or down. The buyers of cheese and butter have not reacted much to lower milk production in November. They are purchasing based on needs for the first quarter of 2025 and do not see the need to be aggressive.

AVERAGE CLASS III PRICES:

3 Month:	$19.33
6 Month:	$19.33
9 Month:	$19.20
12 Month:	$19.07

CHEESE:

USDA released the November Cold Storage report which showed a decrease in inventory in all categories. American cheese inventory declined 7.9 million pounds totaling 766.6 million pounds. This is 8% below November 2023. Swiss cheese inventory declined by 489,000 pounds from October totaling 23.7 million pounds. This is 13% higher than a year ago. Other cheese inventory declined 5.7%, totaling 544.4 million pounds. This is 7% below a year ago. Total cheese inventory totaled 1.335 billion pounds, down 13.0 million pounds from October and 7% below a year ago.

BUTTER:

Butter inventory declined by 54.2 million pounds in November with supply ending at 213.5 million pounds. This is a large one-month decline and the largest November decline since 2021. Inventory is slightly higher than a year ago, putting butter in a not-as-bearish position as it had been for some time. Butter inventory has not been increasing as some reports had suggested indicating exceptional demand moving to the holidays. Increased butter production has been readily absorbed, which should support the market.

OUTSIDE MARKETS SUMMARY:

March corn closed up 1.50 cents per bushel at $4.4775, January soybeans closed down 5.00 cents at $9.6950 and March soybean meal closed down $4.20 per ton at $298.00. March Chicago wheat closed up 7.50 cents at $5.4050. February live cattle closed down $0.95 at $187.45. February crude oil is up $0.15 per barrel at $69.61. The Dow Jones Industrial Average is up 67 points at 42,907 with the NASDAQ up 192 points at 19,765.

Monday Midday Dairy Market Summary - Spot Trading Shows Limited Direction

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	4 Lower
SOYBEAN MEAL:	$3.50 Lower
LIVE CATTLE:	$0.47 Lower
DOW JONES:	40 Points Lower
NASDAQ:	141 Points Higher
CRUDE OIL:	$0.37 Lower

MIDDAY MARKET UPDATE:

The block cheese price remained unchanged at $1.8525 with no loads traded. The barrel cheese price declined 0.75 cent closing at $1.7525 with no loads traded. Offers for one load of blocks and three loads of barrels remained at the close with no buyers showing up to do any business. This added to the negativity of the market. The dry whey price remained unchanged at 74 cents with one load traded. Class III futures are steady to 9 cents lower. The butter price declined 0.75 cent closing at $2.5475 with nine loads traded. There were two unfilled bids and seven uncovered offers remaining at the close. Nonfat dry milk remained unchanged at $1.3925 with three loads traded. Class IV futures have not yet been traded. Butter futures are steady to 2.77 cents lower. Dry whey futures are steady to 1.25 cents lower. The USDA will release the November Cold Storage report Monday afternoon. Inventory is expected to show a decline with cheese stocks below a year ago and butter above a year ago.

Monday Morning Dairy Market Update - Light Dairy Trading Activity Ahead of Cash

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The strength of milk futures on Friday did not carry over through overnight trading and is not expected to continue Monday unless underlying cash prices show strength. Any buying in the cash market this week will be for regular demand as buyers look ahead to next year. Holiday buying has been finished with overall demand not as good as had been expected. Milk prices may see support if production continues to decline similar to what took place in November. Milk production is steady to higher in most areas of the country from previous weeks, but lower than a year ago in some areas. The USDA will release the November Cold Storage report Monday afternoon.

CHEESE:

Cheese prices have been holding recently with prices likely having reached the upper threshold for the time being. Buyers are not expected to be aggressive this week as they assess holiday demand. Manufacturing will increase as more milk is available to the market as schools are closed.

BUTTER:

Monday's Cold Storage report is expected to show demand was good in November. There have been reports that inventory is building, but that may not be reflected on this report, but on the December report. Inventory is expected to show a decrease from October but higher than a year ago. Buyers may not be aggressive at the current price and may hold back on purchasing through the end of the year.

Friday Closing Dairy Market Update - Milk Futures Post Strong Gains

MILK:

Milk futures posted substantially higher prices. The January through April Class IV contracts moved back above $21.00 where they had not been since November 20. Class III futures rebounded due to being oversold while Class IV futures increased due to the strength of butter and the nonfat dry milk price. The bullish milk production report had some impact on the strength but buyers in the spot market did not purchase more aggressively because of the report. They purchased based on needs and are not interested in speculating whether the milk supply might tighten next year. The milk production report released on Thursday showed a significant revision in cow numbers for October. The USDA revised the October cow numbers up 5,000 head resulting in an increase in cow numbers from September of 24,000 head. Thus, the decline of 5,000 head from October was not bullish, but neutral. Cow numbers were 20,000 more than a year ago. Milk production in California declined 9.2 percent with cow number only down 1,000 head. The decline resulted from production per cow being down 175 pounds compared to a year ago.

AVERAGE CLASS III PRICES:

3 Month:	$19.37
6 Month:	$19.36
9 Month:	$19.23
12 Month:	$19.08

CHEESE:

For the week, blocks increased by 5.25 cents with 13 loads traded. The average price for the week was $1.85. Barrels increased by 3.25 cents with 11 loads traded. The average price was $1.7640. Dry whey decreased by 5.25 cents with 11 loads traded. The average price was 74.40 cents. Some had anticipated cheese buyers might be more aggressive today due to the decline of milk production in the November Milk Production report. However, that was not the case as buyers are doing business as needed. This milk had already been utilized in the market and did not result in any concern over the milk supply.

BUTTER:

For the week, butter increased by 9 cents with 19 loads traded. The average price for the week was $2.5190. Grade A nonfat dry milk increased by 1.50 cents with 15 loads traded. The average price was $1.3795. Butter moved to the highest price since November 15. Buyers remain cautious as the current fundamentals do not suggest the price will trend higher. The USDA will release the November Cold Storage report on Monday.

OUTSIDE MARKETS SUMMARY:

March corn closed up 5.50 cents per bushel at $4.4625, January soybeans closed up 11.50 cents at $9.7450 and March soybean meal closed up $11.20 per ton at $302.20. March Chicago wheat closed steady at $5.3300 and February live cattle closed up $1.85 at $188.40. February crude oil is up $0.16 per barrel at $69.54. The Dow Jones Industrial Average is up 498 points at 42,840 with the NASDAQ up 200 points at 19,573.

Friday Midday Dairy Market Summary - Milk Futures Rebound

OUTSIDE MARKETS SUMMARY:

CORN:	6 Higher
SOYBEANS:	14 Higher
SOYBEAN MEAL:	$9.90 Higher
LIVE CATTLE:	$1.17 Higher
DOW JONES:	642 Points Higher
NASDAQ:	279 Points Higher
CRUDE OIL:	$0.34 Higher

MIDDAY MARKET UPDATE:

The block cheese price slipped by 0.25 cent closing at $1.8525 with two loads traded. The barrel cheese price remained unchanged at $1.76 with four loads traded. No unfilled bids remained at the close with an offer for a load of blocks and offers for two loads of barrels. The dry whey price remained unchanged at 74 cents with one load traded. Class III futures are one cent lower to 48 cents higher. The only loss is in the nearby December contract. Futures are rebounding due to the market being overdone to the downside the past two days. The butter price increased 4.50 cents closing at $2.5550 with seven loads traded. Grade A nonfat dry milk increased by 1.75 cents closing at $1.3925 with eight loads traded. Class IV futures are 25 to 48 cents higher. Butter futures are 0.20 to 6.25 cents higher. Dry whey futures are steady to 2.00 cents lower.

November Milk Production in the United States down 1.0 Percent

November Milk Production down 0.8 Percent        

Milk production in the 24 major States during November totaled 17.2 billion pounds, down 0.8 percent from November 2023. October revised production, at 18.0 billion pounds, was up 0.6 percent from October 2023. The October revision represented an increase of 32 million pounds or 0.2 percent from last month's preliminary production estimate.  Production per cow in the 24 major States averaged 1,925 pounds for November, 22 pounds below November 2023.   The number of milk cows on farms in the 24 major States was 8.92 million head, 32,000 head more than November 2023, but 2,000 head less than October 2024.   

November Milk Production in the United States down 1.0 Percent  

Milk production in the United States during November totaled 17.9 billion pounds, down 1.0 percent from November 2023.  Production per cow in the United States averaged 1,909 pounds for November, 23 pounds below November 2023.  The number of milk cows on farms in the United States was 9.37 million head, 20,000 head more than November 2023, but 5,000 head less than October 2024. 

Friday Morning Dairy Market Update - Overnight Futures React to the Milk Production Report

OPENING CALLS:

Class III Milk Futures:	15 to 20 Higher
Class IV Milk Futures:	4 to 8 Higher
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	6 to 8 Higher
Soybean Meal Futures:	$4 to $5 Higher
Wheat Futures:	1 to 2 Higher

MILK:

The decline in milk production in November of 1.0% was unexpected and may change the outlook for milk prices moving into 2025. Milk production per cow declining by 23 pounds indicates the possible impact of bird flu is showing up. The bullish influence of this may be mitigated due to the time of year. Holiday demand has been filled and overall demand generally slows during the early part of the year. The long-term impact could be of greater significance. However, that may not support the market in the near term. Overnight Class III futures rebounded as anticipated due to the strength seen at the end of trading on Thursday after the markets had already been settled. Spot trading will be the key as to whether higher prices will hold.

CHEESE:

It is uncertain whether cheese buyers will step up Friday in response to the bullish implications of the milk production report. Their needs may be filled for now and limited interest in buying until lower prices are seen. Buyers and sellers of cheese are not interested in speculating on market direction. The milk from November has already been processed, stored or consumed, and has been factored into the physical market.

BUTTER:

The USDA will release the November Cold Storage report on Monday showing the inventory level of butter and other dairy products. Butter production has been strong and there have been reports that inventory has been increasing. This may not yet be reflected in the November report, but inventory is expected to have remained significantly higher than a year ago.

Thursday Closing Dairy Market Update - November Milk Production Declined 1%

MILK:

The November Milk Production report was rather bullish with milk production in the top 24 states down 0.8% from the previous year totaling 17.2 billion pounds. Milk production for October was revised higher to an increase of 0.6% from the previous year. Milk production per cow fell 22 pounds below November 2023 at 1,925 pounds. Cow numbers slipped 2,000 head from October. Milk production in the U.S. declined 1% from a year ago totaling 17.9 billion pounds. Milk production per cow averaged 1,909 pounds, down 23 pounds from November 2023. Cow numbers decreased by 5,000 head from October. The number of cows on farms totaled 9.37 million head, up 20,000 more than a year ago. The report is considered bullish as it seems to reflect the impact bird flu has had on milk production. California has been hit hard with the bird flu and this report reflects it. Milk production in the state was down 9.2% from November 2023, the largest year-over-year decline ever. Other Western states showed significant declines. New Mexico was down 5.4%, and Arizona was down 4.1%. There were 10 of the top 24 states that showed milk production declines from the previous year. Texas showed the largest gain of 7.3% followed by South Dakota, up 7.2%. Florida showed an increase of 4.8% with Iowa up 3.4%.

AVERAGE CLASS III PRICES:

3 Month:	$19.33
6 Month:	$19.27
9 Month:	$19.15
12 Month:	$19.01

CHEESE:

The bearishness of spot cheese trading was due to no buyers showing up to do any business during spot trading. Sellers tested the market to see where buyers might be willing to purchase but it seems that buyers have stepped back. It will be interesting to see whether buyers might be more aggressive after seeing the milk production report for November.

BUTTER:

The butter price is expected to remain choppy with limited upside price potential. Milk production in November was reported below a year earlier, but the cream supply has been higher than a year ago. USDA will release the November Cold Storage report on Monday showing the amount of butter stocks compared to a year ago.

OUTSIDE MARKETS SUMMARY:

March corn closed up 3.50 cents per bushel at $4.4075, January soybeans closed up 11.25 cents at $9.6300 and March soybean meal closed up $4.90 per ton at $291.00. March Chicago wheat closed down 8.25 cents at $5.3300. February live cattle closed down $1.78 at $186.55. February crude oil is down $0.80 per barrel at $69.22. The Dow Jones Industrial Average is up 15 points at 42,342 with the NASDAQ down 20 points at 19,373.

Fluid Milk and Cream - Western U.S. Report 51

For California, noted milk production differences for this week compared to last week are mixed. Some handlers in California indicate milk production is beginning to strengthen in recent weeks and slowly bounce back from lower than typical milk production over recent months leading up to December. That said, other handlers convey preliminary records indicate December 2024 year-over-year milk output to be down. Manufacturing capacity remains available, and spot loads of milk remain tight. Demands for all Classes are steady. According to the California Department of Water Resources, as of December 18, 2024, the current statewide snowpack total for the 2024-25 water year is above the benchmark in terms of the average amount as of December 18. 

Milk production in Arizona is strengthening. Spot load availability is in-line with recent weeks. All Class demands are steady. In New Mexico, farm level milk output is strengthening. Like its neighboring states, spot milk load availability is close to recent prior weeks. All Class manufacturing demands are steady. 

Handlers in the Pacific Northwest note steady or strengthening milk production. In terms of anticipated milk output, most handlers convey volumes are right on forecast. Some handlers note milder weather where farms are located is contributing to being on the plus side of forecasts. Demands for all Classes are steady. 

Farm level milk output in the mountain states of Idaho, Utah, and Colorado, varies from steady to stronger. Availability of spot milk loads is somewhat looser recently due to some unplanned down time at processing facilities in parts of the mountain states area. Class I and IV demands are steady. Class II and III demands vary from steady to lighter. Specifically regarding Class II demand from ice cream manufacturers, some stakeholders note demand during 2024 has been lighter in general. 

Cream loads remain readily available throughout most of the region. Demand varies from light to steady. Cream multiples moved lower for the bottom end of the Class II range. Both condensed skim milk availability and demand are mixed. 

Thursday Midday Dairy Market Summary - Class III Futures Take a Beating

OUTSIDE MARKETS SUMMARY:

CORN:	4 Higher
SOYBEANS:	10 Higher
SOYBEAN MEAL:	$5.00 Higher
LIVE CATTLE:	$0.97 Lower
DOW JONES:	281 Points Higher
NASDAQ:	104 Points Higher
CRUDE OIL:	$0.36 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined by 0.50 cent closing at $1.8550 with no loads traded. The barrel price declined 2.50 cents closing at $1.76 with no loads traded. No buyers showed up during spot trading with an uncovered offer in each category. This increased the bearishness of the market. The dry whey price declined a penny, closing at 74 cents with one load traded. Class III futures are steady to 62 cents lower with January showing the greatest loss. The butter price remained unchanged at $2.51 with no loads traded. Grade A nonfat dry milk increased by 0.25 cent closing at $1.3750 with no loads traded. Class IV futures have not yet been traded. Butter futures are 0.20 -- 1.20 cents higher. Dry whey futures are steady to 2.20 cents lower. The USDA will release the November Milk Production report Thursday afternoon. I estimate milk production to be 0.4% above a year ago with cow numbers 3,000 more than October.

Thursday Morning Dairy Market Update - November Milk Production Report Today

OPENING CALLS:

Class III Milk Futures:	5 to 15 Lower
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:	Mixed
Wheat Futures:	6 to 8 Lower

MILK:

The inability of spot cheese prices to increase on Thursday turned traders bearish with increased selling pressure through the end of the day. After the CME settled prices for the day further selling took place, pushing prices significantly lower. The CME settles prices for the day shortly after 2 p.m. CST, but trading continues until 4 p.m. CST. That is why closing prices can be much different than the final trading activity at the end of the day. Such was the case on Wednesday as Class III futures traded substantially lower into the close. That was reflected in overnight trade with contracts over 20 cents lower. Traders anticipated lower cheese prices and liquidated heavily. The USDA will release the November Milk Production report Thursday afternoon. I estimate milk production to be up 0.4% from a year ago with an increase of 3,000 cows from October.

CHEESE:

All eyes will be on spot cheese trading. Traders seem convinced cheese buyers have reached a threshold and will not bid higher. This could bring sellers into the market more aggressively as they try to take advantage of the higher prices. Volatility may be significant during and after spot trading.

BUTTER:

The butter price is expected to be choppy with little price direction. The price is expected to retest the low and possibly set a new low before the end of the year. Demand is good, but supply has been sufficient to satisfy the demand and to begin building inventory.

Wednesday Closing Dairy Market Update - Class III Futures Fell Lower in Continued Trading After the Market Settled

MILK:

It seems that traders threw in the towel as the afternoon progressed with Class III futures posting substantial losses despite cheese prices remaining unchanged. The January contract fell 67 cents at one point. No bearish news surfaced that provided such a negative impact as to trigger heavy liquidation of futures into the close of trading. It would not be surprising to see weakness in the spot market on Thursday as the lack of buyers for blocks may turn sellers aggressive. The main news today was that the Fed cut the interest rate by 0.25% which had been expected, and the Dow fell 1,123 points. Milk production continues to trend higher in most areas keeping bottlers and manufacturers supplied with milk. USDA will release the November Milk Production on Thursday. I estimate milk production to be 0.4% above a year ago. Cow numbers will not see the dramatic increase they did in October but may see an increase of 3,000 head from the previous month.

AVERAGE CLASS III PRICES:

3 Month:	$19.34
6 Month:	$19.28
9 Month:	$19.14
12 Month:	$19.02

CHEESE:

The inability of cheese prices to increase on the spot market sent a negative tone through Class III milk futures. Cheese futures took a hit with contracts 4-5 cents per pound lower. Traders turned increasingly bearish as the day progressed. Cheese prices were expected to have limited upside potential, but buyers have been aggressive as prices increased. The fear of higher prices increased buying activity becoming more psychological than fundamental. Spot milk prices are seeing the effects of the holiday season with prices up to $5.00 below class.

BUTTER:

Butter futures did not succumb to the pressure in some of the other markets with contracts showing gains across the board. Churning has been active with bulk butter supplies readily available. However, demand is reported to remain strong, which could limit the downside in price. The end of the year could bring slower demand with the price retesting the recent lows before the end of the year.

OUTSIDE MARKETS SUMMARY:

March corn closed down 6.25 cents per bushel at $4.3725, January soybeans closed down 25.00 cents at $9.5175 and January soybean meal closed down $7.70 per ton at $279.50. March Chicago wheat closed down 3.75 cents at $5.4125. February live cattle closed down $1.43 at $188.33. February crude oil is up $0.37 per barrel at $70.02. The Dow Jones Industrial Average is down 1,123 points at 42,326 with the NASDAQ down 716 points at 19,393.

Wednesday Midday Dairy Market Summary - Traders are Disappointed Over Cheese Prices

OUTSIDE MARKETS SUMMARY:

CORN:	5 Lower
SOYBEANS:	23 Lower
SOYBEAN MEAL:	$7.10 Lower
LIVE CATTLE:	$0.85 Lower
DOW JONES:	170 Points Higher
NASDAQ:	37 Points Higher
CRUDE OIL:	$0.61 Higher

MIDDAY MARKET UPDATE:

Cheese prices remained unchanged during spot trading with blocks remaining at $1.86 and barrels at $1.7850 with no loads traded. There were two uncovered offers for blocks with no buyers showing interest. There was an unfilled bid and an uncovered offer remaining for barrels. The lack of buying interest for blocks sets a negative tone in the market. The dry whey price increased 0.50 cent closing at 75 cents with three loads traded. Class III futures are 29 cents lower to 5 cents higher with only the July contract showing the gain. The butter price declined a penny closing at $2.51 with one load traded. There was an unfilled bid and three uncovered offers remaining at the close. Grade A nonfat dry milk declined by 0.75 cent closing at $1.3725 with six loads traded. Class IV futures are 2 to 15 cents higher. Butter futures are 1 cent lower to 2 cents higher. Dry whey futures are unchanged to 3 cents lower.