Thursday Closing Dairy Market Update - Milk Seeks Support

MILK:

Class III milk futures were higher today, closing anywhere from 2 to 17 cents lower, losing some ground after early-day strength. Class IV futures had limited trading volume today, closing unchanged. The January Milk Production report will be released tomorrow. Most traders are expecting to see lower production than last year.

AVERAGE CLASS III PRICES:

3 Month:	$19.40
6 Month:	$19.00
9 Month:	$18.89
12 Month:	$18.76

CHEESE:

Cheese found some support today after a disappointing start to the week, closing 0.2 cents to 1.9 cents higher today. The cash market was mixed, with blocks trading slightly higher and barrels trading 2.25 cents lower. There is still tariff concern, but there is more than a week before the next set of tariffs will be decided for Mexico and Canada.

BUTTER:

Butter futures were mixed today after a great start to the week. With the limited trading in Class IV milk futures, we lacked direction to continue the rally. Most buyers are looking for deals and willing to stock freezers if prices are right, but there will be a tipping point where they can be patient on securing more product.

OUTSIDE MARKETS SUMMARY:

March corn closed 0.5 cents per bushel higher at $4.98, March soybeans closed 13.5 cents higher at $10.4550 and March soybean meal closed up $1.01 per ton at $296.00. March Chicago wheat closed down 6.5 cents at $5.854. April live cattle closed down $0.975 at $193.80. March crude oil is 38 cents per barrel higher at $72.48. The Dow Jones Industrial Average is down 450 points at 44,176 with the NASDAQ is 94 points lower at 19,962.

Thursday Midday Dairy Market Summary - Butter Loses Strength

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	10 Higher
SOYBEAN MEAL:	$0.11 Lower
LIVE CATTLE:	$0.725 Lower
DOW JONES:	637 Points Lower
NASDAQ:	150 Points Lower
CRUDE OIL:	$0.07 Higher

MIDDAY MARKET UPDATE:

The block cheese price was up 0.25 cents settlings at $1.90 with three loads traded. The barrel cheese price slipped by 2.25 cent closing at $1.785 with three loads traded. The dry whey price remained unchanged, closing at $0.5450 with no loads traded. Class III futures are currently trading 1 to 12 cents higher, pulling back from Thursday morning's small rally. The butter price fell 1.75 cents, closing at $2.4225 with six loads traded. Grade A nonfat dry milk is 2 cents lower at $1.25 with one load traded. Class IV futures are anywhere from unchanged to 0.5 cents higher. Butter futures are 0.475 cents lower to 0.575 cents higher. Dry whey futures are 0.275 to 1.575 cents lower.

Fluid Milk and Cream - Western U.S. Report 7

For California, milk production is seasonally strengthening. Manufacturers indicate open processing space is getting tighter as seasonal milk output increases continue to take place, but milk volumes are still comfortable compared to processing capacities. Class I, II, and IV demands are steady. Class III demand varies from steady to lighter. According to the California Department of Water Resources, as of February 18, 2025, statewide precipitation has increased to 1.25 inches above the historical mean compared to 0.16 inches above the historical mean as of February 12, 2025, for the current water year. 

Milk production in Arizona is stronger. Demands for all Classes are steady. 

For New Mexico, farm level milk output is seasonally strengthening. Spot milk availability is somewhat looser. Demands for Class I, II, and IV are steady. Demand for Class III varies from steady to lighter. 

Stakeholders in the Pacific Northwest indicate recent milk production is mixed. In some cases, handlers note milk output as below expectations, and weather as a contributing factor for below anticipated milk volumes. That said, manufacturers also indicate milk volumes are sufficient for processing needs. All Class demands are steady. 

Farm level milk output in the mountain states of Idaho, Utah, and Colorado varies from steady to stronger. Stakeholders convey cow comfort is improving. Manufacturers mostly indicate milk volumes and processing capacities remain in good balance with each other. Class I, II, and IV demands are steady, while Class III demand varies from steady to lighter. 

Cream volumes are generally abundant in the region. Although cream multiples moved higher this week, distressed loads below the prior week bottom end All-Classes range of 0.55 continued to be reported. However, stakeholders also indicate the number of distressed cream loads is lessening. Cream demand remains mixed. A few stakeholders convey some Central region to West region movement of cream loads. Condensed skim milk availability is looser. Condensed skim milk demand is stronger.

 

Thursday Morning Dairy Market Update - The Weakness in Milk Futures May Have Been Overdone

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 4 Higher
Soybean Futures:	5 to 7 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	1 to 2 Higher

MILK:

Class III milk futures seemed to find some semblance of support in the $19.00 price range. However, that took a turn for the worse on Wednesday as traders threw in the towel after cheese prices declined. A cloud hanging over the market will continue to be whether tariffs will impact demand for dairy products from international buyers. The countries of Mexico, Canada and China account for 40% of our dairy exports. The uncertainty will keep cheese buyers cautious as they are uncertain of demand as the year progresses. The USDA will release the January Milk Production on Friday, which is expected to show milk output remaining below a year ago.

CHEESE:

Cheese demand is good and improving in some cases and for some varieties. But overall, demand remains below a year ago. Demand is generally slower during this time of year with little idea of changing in the near term. Buyers do not want to build inventory with demand uncertainty. The weakness of dry whey added to the bearishness.

BUTTER:

A second consecutive gain in the spot butter price was insufficient to generate buying interest in Class IV futures. Much of the gain was offset by the decline of nonfat dry milk. Further upside price potential is expected to be limited.

 

Wednesday Midday Dairy Market Summary - Butter Demand High

OUTSIDE MARKETS SUMMARY:

CORN:	7 Higher
SOYBEANS:	5 Higher
SOYBEAN MEAL:	$1.30 Lower
LIVE CATTLE:	$0.35 Lower
DOW JONES:	101 Points Lower
NASDAQ:	52 Points Lower
CRUDE OIL:	$1.02 Higher

MIDDAY MARKET UPDATE:

The block cheese price pulled back today by 2.25 cents settlings at $1.8975 with no loads traded. The barrel cheese price slipped by 0.75 cent closing at $1.8075 with no loads traded. The dry whey price fell 1 cent closing at 54.50 with no loads traded. Class III futures are currently trading 2 to 47 cents lower on this news. The butter price gained another 3 cents Wednesday, closing at $2.44 with 18 loads traded and two bids and two offers remaining at the close. Grade A nonfat dry milk is 1 cent lower at $1.27 with no loads traded. Class IV futures are anywhere from unchanged to 1.7 cents higher. Butter futures are 0.5 cents to 4.30 cents higher. Dry whey futures are unchanged to 2.275 cents lower.

Wednesday Morning Dairy Market Update - Traders Remain Sidelined

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

MILK:

The limited volatility keeps traders sidelined as they see little potential to scalp the market for a profit intraday or daily basis. Day traders thrive on volatility and without that -- they limit trading activity. Surprisingly, the market has settled significantly from the volatility we had seen for quite some time. Underlying cash prices are comfortable at current prices with buyers and sellers doing business as needed with little reason to be aggressive one way or the other. Milk production remains below a year ago but is sufficient for demand. The hope is for demand to improve as the year progresses but continued high grocery prices may limit demand growth.

CHEESE:

The block cheese price is near the top of the price range it has been since the beginning of the year, while barrels are near the lower end of the range. Buyers and sellers are comfortable doing business at current levels. Buyers are not interested in building inventory while sellers want to limit plant inventory and move it to the market. Political uncertainty may keep upside price potential limited.

BUTTER:

There is more activity in the butter market. Buyers are interested in purchasing supply at these lower levels as they build a cushion as a hedge against the potential for higher prices later in the year. They can purchase butter and freeze it for later consumption. Manufacturers are processing heavy cream supplies and want to sell butter rather than have plant inventories increase. This will keep the price choppy.

Tuesday Closing Dairy Market Update - Milk Futures Find Little Direction

MILK:

Milk production is holding steady and should continue over the next few weeks. Farms have prepared for the adverse weather, keeping cows fed and comfortable. Most plants are receiving sufficient milk for bottling and manufacturing. Some indicate they would like to purchase more milk but indicate they are having difficulty finding spot milk for purchase. Some of this is due to plants having positioned themselves as net buyers and are now running into a minor problem as milk production is below a year ago. More plants have become net buyers with more looking for spot milk. Fluid milk demand has improved and demand for some cheese varieties has increased. Class III futures were under pressure after spot trading only to see some strength for a short time before falling back into the close. Class IV futures closed mixed with limited contracts traded.

AVERAGE CLASS III PRICES:

3 Month:	$19.68
6 Month:	$19.26
9 Month:	$19.12
12 Month:	$18.95

CHEESE:

Cheese prices may chop around for a time as buyers see no need to become aggressive and sellers want to limit inventory build. Demand for some varieties of cheese is improving, but overall demand remains below a year ago. This will limit the upside price potential in the near term.

BUTTER:

Butter may have found a level at which it will move sideways for a time. The low price generates buyer interest, while a bounce makes it attractive for sellers to move the supply. The level of cream available to churns will limit the upside, while it may build inventory more quickly than usual.

OUTSIDE MARKETS SUMMARY:

March corn closed up 5.75 cents per bushel at $5.0200, March soybeans closed up 2.50 cents at $10.3850 and March soybean meal closed down $2.10 per ton at $293.80. March Chicago wheat closed up 4.75 cents at $6.0475. April live cattle closed down $0.23 at $194.03. March crude oil is up $1.08 per barrel at $71.82. The Dow Jones Industrial Average is up 10 points at 44,556 with the NASDAQ up 14 points at 20,041.

Tuesday Midday Dairy Market Update - Dairy Traders Disappointed Over Cheese

OUTSIDE MARKETS SUMMARY:

CORN:	7 Higher
SOYBEANS:	5 Higher
SOYBEAN MEAL:	$1.30 Lower
LIVE CATTLE:	$0.35 Lower
DOW JONES:	101 Points Lower
NASDAQ:	52 Points Lower
CRUDE OIL:	$1.02 Higher

MIDDAY MARKET UPDATE:

The block cheese price remained steady at $1.92 with no loads traded. The barrel cheese price slipped by 0.25 cent closing at $1.8150 with no loads traded. The dry whey price remained steady at 55.50 with no loads traded. This held disappointment to traders, resulting in pressure on Class III futures. Contracts range from 10 cents lower to 4 cents higher. The July contract shows the only gain. The butter price gained 3.25 cents closing at $2.41 with nine loads traded. Grade A nonfat dry milk remained unchanged at $1.28 with no loads traded. Class IV futures have not yet been traded. Butter futures are 1.70 cents lower to 1.57 cents higher. Dry whey futures are 1.00 cents lower to 0.70 cent higher.

 

Tuesday Morning Dairy Market Update - Slow Dairy Trading Activity is 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:	2 to 3 Lower
Soybean Meal Futures:	Mixed
Wheat Futures:	4 to 6 Lower

MILK:

Trading activity is expected to be similar to last week. Light trading activity might be the pattern unless there is a substantial change in underlying cash. The time of year would not suggest any large changes in fundamentals. Milk production is holding steady with sufficient milk for demand. It will not be too long before winter weather turns milder, and spring flush begins. However, that will not be for a few weeks with record-cold temperatures in many areas of the country. Traders will focus on the dry whey and nonfat dry milk prices. Further weakness is expected, but the extent of it is unknown and it will have a substantial impact on the market.

CHEESE:

Cheese prices are expected to remain choppy, buyers are not aggressive and sellers want to move supply. The market seems to be balanced for now. Some cheese plants would like to purchase more milk off the spot market, but are having difficulty finding it. This will limit inventory growth.

BUTTER:

The butter price is expected to see further weakness as strong churning schedules leave plentiful supply to the market. The abundant cream supply is expected to continue for weeks to come. This will limit upside price potential.

Friday Closing Dairy Market Update - Class IV Milk Futures Fall

MILK:

Class III milk futures did not move much for the week. Volatility was limited in light trading volume. Underlying cash prices did not provide much direction but did not allow for much upward price movement. There had been anticipation that further strength in cheese might develop. Cheese prices did increase, but the gains were not realized due to the weakness of dry whey. Class IV futures suffered significant losses throughout the week. This has brought Class IV futures right in line with Class III. It has been quite some time since both classes have been near similar price levels for much of the rest of the year. The current milk production is steady and below a year ago. There is no concern over a milk shortage. Some plants would like more and are having difficulty finding spot milk to purchase. Overall, the plants have a sufficient supply to meet demand. The markets will be closed on Monday for President's Day.

AVERAGE CLASS III PRICES:

3 Month:	$19.75
6 Month:	$19.30
9 Month:	$19.16
12 Month:	$18.98

CHEESE:

For the week, blocks increased 6 cents with eight loads traded. Barrels increased by 3.75 cents with eight loads traded. Dry whey declined 3.25 cents with four loads traded. The weakness of dry whey offset the gains of cheese which kept Class III milk futures mixed for the week. The market seems balanced with the buyers seeing no need to be aggressive and the sellers seeing no need to panic sell.

BUTTER:

For the week, butter declined by 0.25 cent with 51 loads traded. Grade A nonfat dry milk declined by 5 cents with 15 loads traded. The weakness of nonfat dry milk kept pressure on Class IV futures. Futures moved to the lowest levels since early March 2024. The butter price reached a new low for the year. Grade A nonfat dry milk fell to the lowest level since Aug. 23, 2024.

OUTSIDE MARKETS SUMMARY:

March corn closed up 2.75 cents per bushel at $4.9625, March soybeans closed up 6.00 cents at $10.3600 and March soybean meal closed up $3.20 per ton at $295.90. March Chicago wheat closed up 22.25 cents at $6.0000. April live cattle closed down $2.28 at $194.25. March crude oil is down $0.64 per barrel at $70.65. The Dow Jones Industrial Average is down 165 points at 44,546 with the NASDAQ up 81 points at 20,027.

Friday Midday Dairy Market Summary - Butter and Nonfat Dry Milk Prices Fall to New Lows

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	7 Higher
SOYBEAN MEAL:	$4.20 Higher
LIVE CATTLE:	$1.95 Lower
DOW JONES:	80 Points Lower
NASDAQ:	62 Points Higher
CRUDE OIL:	$0.67 Lower

MIDDAY MARKET UPDATE:

The block cheese price remained steady at $1.92 with one load traded. The barrel cheese price declined 1.25 cents closing at $1.8175 with three loads traded. The dry whey price declined 0.50 cent closing at 55.50 cents with two loads traded. The continued weakness of dry whey is a drag on the Class III market. Class III futures are mixed from 17 cents lower to 8 cents higher. The butter price declined 2.25 cents closing at $2.3775 with no loads traded. This moves the price to a new low for the year. There were four uncovered offers remaining at the close. Grade A nonfat dry milk declined 2 cents closing at $1.28 with no loads traded. This is a new low for the year and the lowest price since Aug. 23, 2024. Class IV futures are unchanged to 30 cents lower. Butter futures are 3.00 cents lower to 0.17 cent higher. Dry whey futures are 0.15 to 0.75 cent lower. The markets will be closed on Monday, Feb. 17, for Presidents Day.

Friday Morning Dairy Market Update - Traders Shy Away From the Market

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 5 Higher
Soybean Futures:	7 to 10 Higher
Soybean Meal Futures:	$3 to $4 Higher
Wheat Futures:	9 to 12 Higher

MILK:

There is not much new news in the dairy market for traders to get excited about. The past two days have seen limited volatility, resulting in limited trading volume. That is not expected to change Friday. The markets will be closed on Monday, Feb. 17, in observance of Presidents Day. That may limit the desire of traders to take positions and hold them over a three-day weekend due to the uncertainty of what the government might do next with tariffs. Traders may not be interested in trading ahead of the spot market Friday.

CHEESE:

Cheese prices may have reached a threshold as buyers may not be willing to continue to bid the market higher. A sufficient supply of cheese is available for demand with inventory increasing seasonally. There is no concern over supply for the near term.

BUTTER:

The butter price may slowly erode to the level it was earlier this week. The volume of butter available to the market is plentiful, leaving buyers comfortable waiting for sellers to offer butter at steady or lower prices.

 

Thursday Closing Dairy Market Update - Markets Show Limited Volatility

MILK:

It was another day of ho-hum trade with trading activity very light as the limited volatility could not entice day traders to try to scalp the market. Friday's activity may be similar as buyers and sellers in the cash market may not be anxious to buy or sell aggressively. Milk production in California is reported to be improving but remains significantly below last year. The impact of bird flu on milk production has been significant and will linger for a while. Other Western states are showing milk production as steady to higher.

AVERAGE CLASS III PRICES:

3 Month:	$19.82
6 Month:	$19.36
9 Month:	$19.17
12 Month:	$18.98

CHEESE:

Cheese production is steady for most locations. Demand varies depending on the variety. Certain varieties of cheese are termed as tight. Some cheese plants indicate they are trying to locate extra spot milk supplies to keep full production schedules but are having difficulty finding some. Cheese buyers do not see the need to be aggressive at present.

BUTTER:

It is good to see buyers actively purchasing what has been coming to the market, but they are purchasing what is being offered and not bidding higher to get it. Manufacturers are moving supply attempting to limit inventory growth at the plant level. This will keep the butter price under pressure with limited upside price potential.

OUTSIDE MARKETS SUMMARY:

March corn closed up 3.25 cents per bushel at $4.9350, March soybeans closed up 2.25 cents at $10.3000 and March soybean meal closed down $1.40 per ton at $292.70. March Chicago wheat closed up 3.50 cents at $5.7775. April live cattle closed up $0.80 at $196.53. March crude oil is up $0.08 per barrel at $71.45. The Dow Jones Industrial Average is up 343 points at 44,711 with the NASDAQ up 296 points at 19,946.

 

Dairy market faces mixed signals amid HPAI and price stabilization

The dairy market is experiencing mixed signals. Bullish factors include market price stabilization, a smaller national herd, and lower production per cow due to highly pathogenic avian influenza (HPAI). Bearish factors including the threat of tariffs, rapid growth of cheese in cold storage, and less competitive U.S. prices on the global market.

December's milk production fell for the second month, reaching 18 billion lbs, down 0.4% from the previous year. National milk production per cow fell, with California experiencing the largest declines, down 6.8% year-over-year due to more than half of the state’s herds having HPAI cases. The drop in California's milk production was expected and less severe than many analysts anticipated. The number of active HPAI cases in California has been decreasing, and herd numbers have remained relatively stable, indicating that many culled cows have been replaced.

Lower milk production and fewer cows have helped to support and stabilize milk prices; however, the market remains a mixed bag. The impacts of lower production from HPAI are offset by bearish market factors including the threat of tariffs, the rapid growth of cheese in cold storage, and U.S. prices being less competitive on the global landscape. Dairies can use risk management programs like Dairy Margin Coverage (DMC) to help navigate these challenges. The 2025 enrollment period for DMC is open until March 31, 2025.

USDA announced a final rule amending the uniform pricing formulas for the Federal Milk Marketing Orders (FMMOs). This final ruling, published on Jan. 17, will be implemented on June 1, 2025. The estimated impact on FMMOs will vary depending on each marketing order. Those FMMOs that are less dependent on Class I milk (which includes Arizona, California, and Pacific Northwest FMMOs) will likely not receive as much benefit as other FMMOs from these updated guidelines.

Profitability

Dairy: Slightly profitable - Neutral 12-month outlook

 While cheese plant capacity and strong consumer demand for dairy products support prices, global competition and potential market volatility pose headwinds to profitability. The ongoing pull of dairy and dairy-cross cattle to feedlots is slowing the expansion of dairy herds.

Fluid Milk and Cream - Western U.S. Report 6

For California, weekly milk production is trending higher and 2025 year-over-year milk output gaps are steadily narrowing. However, some handlers convey recent 2025 year-over-year milk production decreases continue to be a significant percentage. Manufacturers indicate both increasing milk production and seasonal routine maintenance are contributing to tighter processing space availability. Class I, II, and III demands are steady. Class IV demand is more mixed. According to the California Department of Water Resources, as of February 11, 2025, statewide precipitation is 0.16 inches above the historical mean for the current water year. 

For Arizona, farm level milk output is strengthening. All Class demands are steady. 

Farm level milk output is strengthening in New Mexico as well. However, stakeholders convey spot milk availability in the southwest remains somewhat tight. All Class manufacturing demands are steady. 

Weekover-week milk production in the Pacific Northwest is mixed. In some cases, handlers convey milk output is noticeably lighter than expectations and weather factors have contributed to milk output being below anticipated volumes. That said, manufacturers say milk volumes are still meeting processing needs. Demands for all Classes are steady. 

In the mountain states of Idaho, Utah, and Colorado, milk production varies from steady to stronger. Stakeholders in the mountain states note snowfall in Idaho and Utah have been lighter than seasonal expectations thus far. Idaho manufacturers convey milk volumes and processing capacities to generally be in good balance with each other. Class I, II, III, and IV demands are steady. 

Cream volumes are plentiful in the region. Cream multiples moved lower for the bottom end of both ranges. Stakeholders reported cream offers and sales at cream multiples below the bottom end of the All-Classes range, which is 0.55 this week, for distressed loads of cream looking for a home. Cream demand is mixed. Condensed skim milk availability is somewhat looser. Condensed skim milk demand is stronger.

Thursday Midday Dairy Market Summary - Traders Find Little Direction

OUTSIDE MARKETS SUMMARY:

CORN:	4 Higher
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$1.50 Lower
LIVE CATTLE:	$0.37 Higher
DOW JONES:	148 Points Higher
NASDAQ:	165 Points Higher
CRUDE OIL:	$0.06 Lower

MIDDAY MARKET UPDATE:

The block cheese price remained unchanged at $1.92 with no loads traded. The barrel cheese price increased by 0.25 cent closing at $1.83 with no loads traded. The dry whey price decreased by 0.75 cent closing at 56 cents with no loads traded. The decrease in the dry whey price more than offset the increase in barrels. Class III futures are 15 cents lower to 13 cents higher. The butter price decreased 0.50 cent closing at $2.40 with eight loads traded. Sellers continue to offer a significant volume of loads to the spot market at lower prices. Buyers have been willing to purchase what is being offered. Grade A nonfat dry milk remained unchanged at $1.30 with no loads traded. Class IV futures are 11 to 22 cents lower with trading activity confined to the April and May contracts. Butter futures are 2.00 cents lower to 1.00 cent higher. Dry whey futures are 0.50 cent lower to 1.00 cent higher.

Wednesday Closing Dairy Market Update - Milk Futures Remain Lethargic

MILK:

Milk production is holding well despite some adverse weather taking place in some areas. A few areas report a slight uptick in milk receipts. Component values remain strong, improving butter and cheese output. Milk production may hold steady for a time, continuing to run below the level of a year ago. However, the market is not expected to tighten due to slower demand. Demand is generally slower during this time of year but is currently running below a year ago. Milk futures do not show much price difference over the next year.

AVERAGE CLASS III PRICES:

3 Month:	$19.83
6 Month:	$19.36
9 Month:	$19.20
12 Month:	$19.01

CHEESE:

Demand varies for different types of cheese. Italian-type cheese sales are reported to be strong. Cheddar sales are mixed with barrels and cheese curds being weaker than usual for this time of year. Some plants indicate spot milk is hard to find with some plants having to run less production than desired. Some of this is due to many plants having reduced the amount of patron milk and positioning themselves as net buyers. When the milk supply is not as abundant as anticipated, they find themselves short on supply. It will be interesting what will happen when increased processing capacity comes online.

BUTTER:

The cream supply is rather burdensome. Dairy Market News reports truckloads of cream are backed up and waiting to go into factories. This will limit the upside price potential for butter with the possibility of making new lows again.

OUTSIDE MARKETS SUMMARY:

March corn closed up 6.25 cents per bushel at $4.9025, March soybeans closed down 15.75 cents at $10.2775 and March soybean meal closed down $2.50 per ton at $294.10. March Chicago wheat closed down 2.75 cents at $5.7425. April live cattle closed down $0.28 at $195.73. March crude oil is down $2.10 per barrel at $71.22. The Dow Jones Industrial Average is down 225 points at 44,369 with the NASDAQ up 6 points at 19,650.

Wednesday Midday Dairy Market Summary - Butter Eliminates Some of the Gain

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	16 Lower
SOYBEAN MEAL:	$2.10 Lower
LIVE CATTLE:	$0.02 Higher
DOW JONES:	188 Points Lower
NASDAQ:	6 Points Higher
CRUDE OIL:	$1.88 Lower

MIDDAY MARKET UPDATE:

The block cheese price gained 1.25 cents closing at $1.92 with one load traded. The barrel cheese price gained a penny closing at $1.8275 with no load traded. The dry whey price remained unchanged at 56.75 with no loads traded. Traders were bearish before spot trading and the strength of cheese did not eliminate that idea. Class III futures are off their lows but still post losses of 1 to 14 cents in the February through May contracts. Later contracts are 1 to 7 cents higher with trading activity only through July. Trading activity is very light. The butter price declined 2.50 cents eliminating half of Tuesday's gain. The price closed spot trading at $2.4050 with 31 loads traded. Buyers and sellers were willing to do business at this price level. Grade A nonfat dry milk remained unchanged at $1.30 with no loads traded. Class IV futures have not yet been traded. Butter futures are 1.10 to 3.50 cents lower. Dry whey futures are 0.72 cent lower to 0.92 cent higher.

 

Wednesday Morning Dairy Market Update - Cash Prices Expected to Remain Choppy

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The market does not have much direction currently. The underlying cash prices are expected to remain choppy for the near term. The milk supply is lower than a year ago but sufficient for demand from bottling and manufacturing. Bird flu remains a problem but has not impacted the milk supply as anticipated. The tight heifer supply has increased prices substantially, but some expansions are still taking place. Cow numbers have been holding as dairy farms have reduced culling. They have increased income significantly with beef on dairy calves. The outlook for the milk price this year does not look much better than last year.

CHEESE:

The cheese price may have limited upside potential as cheese production remains steady and demand is slightly below a year ago. Inventory is increasing seasonally, but it is running below a year ago. However, that has not tightened the market.

BUTTER:

The bounce in the butter price on Tuesday is expected to the short-lived as butter supplies are plentiful. Cream supplies remain abundant with churns busy utilizing the available supply. Butter buyers are not expected to remain aggressive.

Tuesday Closing Dairy Market Update - USDA Lowers Milk Prices

MILK:

Class III milk futures were higher most of the day, but as trading continued after the markets were settled, contracts slipped lower. Traders must have realized the weakness of dry whey offset the gains of cheese and decided to take any minor profits they may have had. Class IV futures did not react to the strong butter price for a similar reason. The weakness of nonfat dry milk offset much of the gain in butter. The USDA released the February World Agricultural Supply and Demand Estimates report today. They increased their estimate for milk production in 2024 by 100 million pounds, totaling 225.9 billion pounds. That is 500 million pounds below milk production in 2023. Estimated milk production for 2025 was lowered by 300 million pounds to 226.9 billion pounds. The Class III milk price for 2025 was reduced by $0.60 to an average of $19.10 from the January estimate. The Class IV price was reduced by $1.10 to an average of $19.70. The All-milk price was reduced by $0.45 to an average of $22.60 for the year.

AVERAGE CLASS III PRICES:

3 Month:	$19.83
6 Month:	$19.38
9 Month:	$19.21
12 Month:	$19.02

CHEESE:

The USDA raised the cheese price on the World Agricultural Supply and Demand report. The average price was raised to $1.88, up 1.50 cents from the January estimate. Unfortunately, the dry whey price was lowered by 3.50 cents to an average of 60.50 cents. The positive aspect is that these prices would be higher than last year.

BUTTER:

The average butter price was reduced by 5 cents to 2.6450. This would be 20 cents lower than in 2024. The nonfat dry milk price was reduced by 4.50 cents to $1.2950. This is 5 cents higher than in 2024.

OUTSIDE MARKETS SUMMARY:

March corn closed down 7.50 cents per bushel at $4.8400, March soybeans closed down 6.00 cents at $10.4350 and March soybean meal closed down $3.90 per ton at $296.60. March Chicago wheat closed down 2.50 cents at $5.7700. April live cattle closed down $2.13 at $196.00. March crude oil is up $0.87 per barrel at $73.19. The Dow Jones Industrial Average is up 123 points at 44,594 with the NASDAQ down 70 points at 19,644.

Tuesday Midday Dairy Market Summary - Butter Bounces, Cheese Gains, USDA Reduces Milk Output

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$3.50 Lower
LIVE CATTLE:	$2.15 Lower
DOW JONES:	16 Points Higher
NASDAQ:	82 Points Lower
CRUDE OIL:	$1.02 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.50 cent closing at $1.9075 with no loads traded. The barrel cheese price increased 0.25 cent closing at $1.8175 with one load traded. The gains in cheese were more than offset by the decline of dry whey. Dry whey declined 2 cents closing at 56.75 cents with two loads traded. However, Class III futures are mostly higher ranging from 15 cents lower in deferred contracts to 23 cents higher in nearby contracts. The butter price jumped 5 cents closing at $2.43 with 12 loads traded. The price was low enough to generate buying interest. Grade A nonfat dry milk moved in the opposite direction with a decline of 2.50 cents closing at $1.30 with 15 loads traded. Class IV has traded unchanged to 10 cents higher. Butter futures are 0.47 cent lower to 2.25 cents higher. Dry whey futures are 0.52 to 1.25 cent lower. The USDA lowered 2025 milk production on the World Agricultural Supply and Demand (WASDE) report to 226.9 billion pounds.

Tuesday Morning Dairy Market Update - Traders Wait for Cash Direction

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

MILK:

Class III milk futures closed higher on Monday following cheese prices higher. There was no follow-through in the overnight trade as traders need to see further strength in underlying cash before they buy into the market more aggressively. The general anticipation is for the market to remain choppy near term. The USDA will release the World Agricultural Supply and Demand report Tuesday morning. The report is expected to show estimated milk production this year to be lower than the January estimate. Milk and dairy product prices may show little change from the previous month. This report is not a market-mover as the numbers are estimates.

CHEESE:

There could be further strength in cheese prices, but it is expected to be limited. Buyers will not chase the market aggressively as sufficient cheese is available for demand. Inventory is building seasonally limiting the need for buyers to be concerned over supply.

BUTTER:

The butter price is due for a bounce, but if it does, the strength will be limited. The expectation is for further weakness to develop. The activity churning schedules keep sufficient butter available for demand as well as building inventory.

 

Monday Midday Dairy Market Summary - Cheese Prices Rebound

OUTSIDE MARKETS SUMMARY:

CORN:	4 Higher
SOYBEANS:	Unchanged
SOYBEAN MEAL:	$0.60 Lower
LIVE CATTLE:	$1.22 Higher
DOW JONES:	141 Points Higher
NASDAQ:	221 Points Higher
CRUDE OIL:	$1.38 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 4.25 cents closing at $1.9025 with six loads traded. The barrels cheese price gained 3.50 cents closing at $1.8150 with four loads traded. The dry whey price remained steady at 58.75 cents. Class III futures are 9 to 40 cents higher. The butter price remained unchanged at $2.38. Grade A nonfat dry milk slipped 0.50 cent closing at $1.3250 with no loads traded. Class IV futures have not yet been traded. Butter futures are 0.45 cent lower to 1.47 cents higher. Dry whey futures are unchanged with trade taking place only in the March contract.

Monday Morning Dairy Market Update - Overnight Trade Indicates Further Pressure

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The fundamentals have not changed in the milk market, which may keep pressure on prices. There may be some areas where the milk supply is reported as tightening, but without strong demand, it will not support prices. There is little concern in the market over the milk supply keeping bottling and manufacturing satisfied. The potential tariff situation with Canada and Mexico will remain a cloud over the market. It has been delayed but could be implemented at any time. The discovery of a strain of bird flu in Nevada last week has traders uncertain whether that is bullish or bearish news. So far, bird flu has not provided much support to the market.

CHEESE:

Cheese prices are expected to continue to chop around. Buyers are not aggressive due to slower demand. Cheese inventory is building seasonally which will limit the need for buyers to be aggressive. Cheese yields are higher due to the record high level of protein in the market.

BUTTER:

One would think that the butter price is low enough to generate buying interest, but buyers are not concerned about the supply and have been able to purchase on price weakness. The abundant cream supply and active churning keep the current demand satisfied and the inventory growing.

Friday Closing Dairy Market Update - A Negative Close to a Dismal Week

MILK:

It was a dismal end to the week for Class III futures falling and eliminating much of what was gained during the week. The market is unable to find solid support with price increases being short-lived. Class IV futures steadily during the week moving futures back to the lowest levels since March 2024. The steady pressure on the butter price continued as supply exceeded demand leaving buyers unaggressive. The possibility of tariffs on Canada and Mexico will leave a cloud hanging over the market. Buyers of dairy products are not interested in purchasing supplies for later demand as they are uncertain of what that demand might be.

AVERAGE CLASS III PRICES:

3 Month:	$19.59
6 Month:	$19.24
9 Month:	$19.10
12 Month:	$18.93

CHEESE:

For the week, blocks declined 1.50 cents with 17 loads traded. The average price for the week was $1.8685. Barrels declined 3 cents with seven loads traded. The weekly average price was $1.7970 with seven loads traded. Dry whey declined 5.25 cents with only two loads traded. The weekly average price was 60.55 cents. Blocks remained steady for three consecutive days. The barrel price moved to its lowest level since Dec. 27, 2024. The dry whey price moved to the lowest level since Sept. 23, 2024.

BUTTER:

For the week, butter declined 5.25 cents with 14 loads traded. The average price for the week was $2.41. This is the lowest price since June 26, 2023. Grade A nonfat dry milk declined by 1.50 cents with 12 loads traded. The average price for the week was $1.3380. This is the lowest price since Aug. 30, 2024.

OUTSIDE MARKETS SUMMARY:

March corn closed down 7.75 cents per bushel at $4.8750, March soybeans closed down 11.00 cents at $10.4950 and March soybean meal closed down $5.00 per ton at $301.40. March Chicago wheat closed down 5.00 cents at $5.8275. April live cattle closed steady. March crude oil is up $0.43 per barrel at $71.04. The Dow Jones Industrial Average is down 444 points at 44,303 with the NASDAQ down 269 points at 19,523.