OVERVIEW:
Class III milk futures held up well despite the further decline of cheese prices. Class IV futures showed little trading activity. All categories in the spot market declined this week. The World Agricultural Supply and Demand report showed higher milk production and higher milk prices for this year and 2026.
MILK:
Class III milk futures held up well with contracts closing mixed despite further weakness of cheese prices. Futures closed lower for the week. The USDA released the World Agricultural Supply and Demand report today. They increased their estimates for milk production for this year by 500 million pounds to an expected output of 228.3 billion pounds. If this comes to fruition, it would be an increase of 2.4 billion pounds from 2024. The estimate for milk production in 2026 was raised by 900 million pounds to reach 229.1 billion pounds. The continued increase in cow numbers and milk production per cow is expected to fuel the gain. The Class III price estimate for this year was reduced $0.15 to an average of $18.50 per cwt. The price for 2026 was raised by $0.05 to average $17.85. The Class IV average price rose $0.20 this year to $19.05 per cwt. The price for 2026 was raised $0.40 to average $18.60. The estimate for the All-milk price this year increased $0.05 to $22.00 per cwt. The average estimated price for 2026 was raised $0.35 to $21.65.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.86 |
| 6 Month: | $18.26 |
| 9 Month: | $18.16 |
| 12 Month: | $18.13 |
CHEESE:
For the week, blocks declined 2.50 cents with 42 loads traded. The weekly average price was $1.6835. Barrels declined 4.50 cents with nine loads traded. The weekly average price was $1.71. Dry whey declined 4 cents with 10 loads traded. The weekly average price was 58.65 cents. USDA estimates the average cheese price this year to be $1.84 per pound, down $0.02 from its June estimate. The price for 2026 was left unchanged at $1.81 per pound. The Dry whey price was raised a penny this year to 57.50 cents and raised a half cent to average 51.50 cents per pound for 2026.
BUTTER:
For the week, butter declined 1.50 cents with 17 loads traded. The weekly average price was $2.5960. Grade A nonfat dry milk declined 0.75 cent with 9 loads traded. The weekly average price was $1.2660. The average butter price this year increased 2.50 cents on today's report to an average of $2.56 per pound. The average price for 2026 rose by 5.50 cents to $2.5350 per pound. The nonfat dry milk price was raised a penny to $1.26 per pound. The projected price average for 2026 is $1.2350, up 2 cents from June.
OUTSIDE MARKETS SUMMARY:
December corn closed down 4.25 cents per bushel at $4.1225, November soybeans closed down 6.50 cents at $10.0725 and December soybean meal closed down $1.70 per ton at $283.60. September Chicago wheat closed down 9.50 cents at $5.4500. August live cattle closed up $2.98 at $222.20. August crude oil is up $2.11 per barrel at $68.68. The Dow Jones Industrial Average is down 279 points at 44,372, with the NASDAQ down 45 points at 20,586.
