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.