Tuesday Closing Dairy Market Update - August Feed Prices Decrease While the All-milk Price Increased

OVERVIEW:

Class III futures did not reflect the strength of the underlying cash cheese market. The October, November and December contracts extended the gains, but other contracts were mixed. Feed prices on the Agricultural Prices report declined, while the All-milk price increased.

MILK:

Class III milk futures did not respond as much as would have been expected due to the increase in cheese prices. Some of the gains were factored in, but traders are also cautious about the upside price potential. The decline of the butter price increases the potential for weakness. Class IV futures were quick to eliminate some of the gains in response to the butter price falling back. The USDA released the August Agricultural Prices report. The average corn price was $3.96. down $0.35 per bushel from July and up $0.08 from July 2024. The premium/supreme hay price was $222.00 per ton, down $23.00 per ton from July and down $14.00 per ton from July 2024. The All-milk price was $20.90 per cwt, up $0.10 from July, but down $2.70 per cwt from a year ago. This will increase the income over feed price for the month, as the soybean meal average prices will be lower as well when the FSA releases it, hopefully today or tomorrow. Other prices of interest were the alfalfa hay price at $158.00 per ton, down $5.00 per ton from July and down $8.00 per ton from a year ago. The average soybean price was $10.00, down $0.20 per bushel from July and down $0.30 per bushel from August 2024. The average butterfat test was 4.16 compared to 4.13 in July and 4.10 a year ago.

AVERAGE CLASS III PRICES:

3 Month:	$17.05
6 Month:	$17.04
9 Month:	$17.06
12 Month:	$17.14

CHEESE:

The government shutdown is going to happen as Congress will not be able to pass the twelve appropriation bills, as they have not yet agreed on any of them. The 2018 Farm Bill will also run out at midnight and will impact some government agricultural services. It will not impact prices as parity would come into effect on Jan. 1, 2026, without a new bill. It will be business as usual in the dairy industry and pricing for now.

BUTTER:

The decline in butter today indicates that the buying was not a change in trend, but increased the buying interest as traders took advantage of the lower price. There have been 39 loads traded for the first two days of the week. There is no shortage of supply.

OUTSIDE MARKETS SUMMARY:

December corn closed down 6.00 cents per bushel at $4.1550, November soybeans closed down 8.75 cents at $10.0175 and December soybean meal closed down $2.10 per ton at $273.30. December Chicago wheat closed down 11.50 cents at $5.0800. December live cattle closed up $0.95 at $234.78. November crude oil is down $1.08 per barrel at $62.37. The Dow Jones Industrial Average is up 82 points at 46,398, with the NASDAQ up 69 points at 22,660.

Tuesday Midday Dairy Market Summary - Cheese Continued Higher

OUTSIDE MARKETS SUMMARY:

CORN:	7 Lower
SOYBEANS:	10 Lower
SOYBEAN MEAL:	$2.10 Lower
LIVE CATTLE:	$0.22 Higher
DOW JONES:	144 Points Lower
NASDAQ:	72 Points Lower
CRUDE OIL:	$0.94 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 5.50 cents, closing at $1.72 with two loads traded. The barrel cheese price increased 4.50 cents, closing at $1.69 with no loads traded. There were two unfilled bids and one uncovered offer for blocks, and one unfilled bid for barrels remaining at the close. The dry whey price remained unchanged at 64.75 with no loads traded. Class III futures are 2 cents lower to 31 cents higher. The butter prices decreased 5.00 cents, closing at $1.71 with 21 loads traded. There were two unfilled bids and seven uncovered offers remaining at the close. Grade A nonfat dry milk slipped 0.25 cent, closing at $1.1575 with six loads traded. Trading activity has only taken place in the December contract at 28 cents lower. Butter futures are 3.50 to 9.90 cents lower. Dry whey futures are 0.02 cent lower to 1.00 cents higher. Cheese futures are 0.90 cent lower to 3.30 cents higher. USDA will release the July Agricultural Prices report this afternoon.

Tuesday Morning Dairy Market Update - Follow-Through Strength Expected

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures received a boost Monday due to the strength of the underlying cash market. Futures increased significantly as they adjust to remain in line with the strength. It is unlikely the strength will be maintained as the milk supply is higher than a year ago and supplies are sufficient. Hopefully, some of the gains will be maintained and will provide some support for better prices than futures had indicated recently. USDA will release the July Agricultural Prices report Tuesday afternoon. The report will provide most of the prices used to calculate income over feed for the Dairy Margin Coverage program. The soybean meal price will not be released until Wednesday unless the FSA releases it early due to the potential for a government shutdown at midnight. It is uncertain whether a shutdown would impact the release of the price. Tuesday is the last day to trade September futures and options with the Federal Order class prices released on Wednesday.

CHEESE:

Cheese prices may have found support, but the upside price potential may be limited. Cheese production is steady and slowly increasing as milk receipts are increasing at the plant level. Demand has been steady, but may improve over the next few months. The increase in American cheese stocks in August is a little concerning, as inventory usually declines.

BUTTER:

Trading in butter has increased over the past few weeks. Manufacturers have been increasing output due to more cream being available. They have been moving supplies to the spot market to limit inventory at the plant level. Buyers have been willing to purchase what is being offered and pay more for it as they take advantage of the low price. This will limit their aggressiveness as holiday demand nears, as they will already have sufficient supplies on hand.

Monday Closing Dairy Market Update - Strong Close for Milk Futures

OVERVIEW:

Milk futures closed higher with support stemming from the significant increase in the butter price. The positive close makes traders hopeful that next week will be better. The USDA released the August Cold Storage report showing a decline in butter and cheese stocks.

MILK:

Class III futures have rebounded over the past two days in response to stronger underlying cash prices. Traders have bought into the market in the hope of making a quick profit. There is a strong chance that the increase in underlying cheese prices may find increased selling interest at higher prices. Class IV futures have been increasing over the past three days, and they have moved back above the $15.00 level. Tuesday is the last trading day for September futures and options, with the Federal Order prices being announced on Wednesday. Both the Class III and Class IV October contracts are holding a significant discount below the September contracts. Underlying cash prices will need to post consistently higher prices to close or exceed the gap. The USDA will release the July Agricultural Prices report on Tuesday, which will provide most of the prices used in the calculation of income over feed for the Dairy Margin Coverage program.

AVERAGE CLASS III PRICES:

3 Month:	$17.09
6 Month:	$17.04
9 Month:	$17.03
12 Month:	$17.10

CHEESE:

It was nice to see cheese prices increase again today, with buyers being aggressive and able to move the block price higher despite the selling interest. The five unfilled bids under the market would suggest further buyer interest on Tuesday. Time is running out for a seasonal sustained price rally, but any price correction and ongoing buying interest will provide support to the market.

BUTTER:

It is unlikely that buyers in the market were aggressive due to the inventory level reported on the cold storage report. The report, released Friday, was for August. That had already been in the market for a month, and new lows for the year were recorded last week. Buyers wanted to take advantage of the low price and stepped up to the plate.

OUTSIDE MARKETS SUMMARY:

December corn closed down .50 cent per bushel at $4.2150, November soybeans closed down 3.25 cents at $10.1050 and December soybean meal closed up $.80 per ton at $275.40. December Chicago wheat closed down 0.25 cent at $5.1950. December live cattle closed down $0.48 at $233.83. November crude oil is down $2.59 per barrel at $63.13. The Dow Jones Industrial Average is up 69 points at 46,316, with the NASDAQ up 107 points at 22,591

Monday Midday Dairy Market Summary - Butter and Cheese Show Further Strength

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	3 Lower
SOYBEAN MEAL:	$0.30 Lower
LIVE CATTLE:	$0.92 Lower
DOW JONES:	61 Points Lower
NASDAQ:	90 Points Higher
CRUDE OIL:	$2.70 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 4.00 cents to close at $1.6650 with 13 loads traded. There were five unfilled bids remaining at the close and no offers. The barrel cheese price increased 2.25 cents, closing at $1.6450 with no loads traded and no sellers showing up during spot trading. Grade A nonfat dry milk remained unchanged at 64.75 cents with one load traded. Class III futures are unchanged to 26 cents higher, with December posting the greatest gain. The butter price increased 4.00 cents, closing at $1.76 with 18 loads traded. Grade A nonfat dry milk increased 0.50 cent to close at $1.16 with one load traded. Class IV futures have not yet been traded. Butter futures are 0.50 to 5.27 cents higher. Dry whey futures are 0.50 to 1.60 cents higher. Cheese futures are steady to 2.50 cents higher.

Monday Morning Dairy Market Update - Traders Will Be Cautious Ahead of Spot Trading

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures are expected to continue to struggle as the underlying cash prices are likely to remain choppy. There is little reason for the spot price to increase significantly, and lower prices attract buying interest. Milk production is steadily improving as the weather is conducive to cow comfort and increased feed intake. The August Cold Storage report was neutral to slightly bearish as American cheese stocks increased rather than showing a seasonal decrease. The calendar will turn to October soon, and the month during which dairy prices historically reach a peak. Hopefully, this year they may find a bottom.

CHEESE:

The increase in American cheese inventory in August is not a good sign for the market. That is what is traded on the daily spot market and may continue to limit the upside potential for prices. This is the time of year during which there is a greater demand from packagers and recutters as they prepare for the holiday season.

BUTTER:

The price increase in butter on Friday was good to see, but it may be short-lived. Butter inventory was 6% below a year ago in August, but that may not be bullish. It has been 6% lower than the previous year for the past three months. Price increases may be selling opportunities.

Friday Closing Dairy Market Update - American Cheese Inventory Increases While Other Categories Decrease

OVERVIEW:

Milk futures closed higher with support stemming from the significant increase in the butter price. The positive close makes traders hopeful that next week will be better. The USDA released the August Cold Storage report showing a decline in butter and cheese stocks.

MILK:

Both Class III and Class IV futures close lower for the week. The bounce today provided little consolation for the bearish week. Cheese and butter prices close lower for the week, keeping pressure on the market. Milk production remains significantly higher than a year ago, keeping the market in a bearish posture. The surprise is the continued increase in cow numbers despite the high replacement prices. The milk price outlook for the rest of the year is not very positive, and lower prices are expected to carry over into next year.

The USDA will release the July Agricultural Prices Report on Tuesday. The income over feed price is not expected to show much change from June and will be higher than the $9.50 level of the Dairy Margin Coverage program. That is why the National Farmers marketing group is proposing the DMC floor be raised to $13.00. This has been receiving some support, but whether the government will embrace this is uncertain.

AVERAGE CLASS III PRICES:

3 Month:	$16.91
6 Month:	$16.84
9 Month:	$16.89
12 Month:	$16.98

CHEESE:

For the week, blocks declined 2.50 cents with 28 loads traded. The weekly average price was $1.6285. Barrels declined 1.75 cents with 2 loads traded. The weekly average price was $1.6310. Dry whey gained 0.75 cent with one load traded. The weekly average price was 64.40 cents with one load traded. The August Cold Storage report showed American cheese stocks increased by 4.7 million pounds, totaling 818.2 million pounds, and were 3% above August 2024. It is not common for cheese inventory to increase in August. Swiss cheese inventory decreased 836,000 pounds to a total of 20.7 million pounds, and 8% below a year ago. Other cheese inventories decreased 14.8 million pounds, totaling 578.2 million pounds, and was nearly the same as last year. Total cheese inventory was 1.417 billion pounds, down 10.9 million pounds from July, but 2% above a year ago.

BUTTER:

For the week, butter declined 5 cents with 74 loads traded. The weekly average price was $1.6720. Grade A nonfat dry milk increased 0.75 cent with 31 loads traded. The weekly average price was $1.1475. Butter inventory in August declined 25.6 million pounds, totaling 305.9 million pounds, down 6% from August 2024.

OUTSIDE MARKETS SUMMARY:

December corn closed down 3.75 cents per bushel at $4.2200, November soybeans closed up 1.50 cents at $10.1375 and December soybean meal closed up $1.40 per ton at $274.60. December Chicago wheat closed down 7.25 cents at $5.1975. December live cattle closed steady. November crude oil is up $0.21 per barrel at $65.19. The Dow Jones Industrial Average is up 300 points at 46,247, with the NASDAQ up 99 points at 22,484

Friday Midday Dairy Market Update - Butter Price Jumps

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	1 Higher
SOYBEAN MEAL:	$0.30 Higher
LIVE CATTLE:	$0.40 Lower
DOW JONES:	373 Points Higher
NASDAQ:	72 Points Higher
CRUDE OIL:	$0.67 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 1.25 cents, closing at $1.6250 with three loads traded. The barrel cheese price declined 2.25 cents, closing at $1.6225 with no loads traded. The dry whey price remained unchanged at 64.75 cents with no loads traded. Class III futures are 1 cent lower to 21 cents higher, with November showing the greatest gain. The butter price jumped 8.00 cents, closing at $1.72 with 29 loads traded. Grade A nonfat dry milk gained 0.75 cent, closing at $1.1550. Class IV futures are 23 cents lower to 21 cents higher. Butter futures are 0.45 cent lower to 6.60 cents higher. The only loss is in the September contract, as it adjusts to the weekly AMS prices, and it will settle to those prices on Wednesday. Dry whey futures are unchanged to 0.75 cent higher. Cheese futures are 1.00 cents lower to 1.10 cents higher. USDA will release the August Cold Storage report this afternoon.

Friday Morning Dairy Market Update - August Cold Storage Report Will Be Released

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Lower
Soybean Futures:	Mixed
Soybean Meal Futures:	$0.50 to $1.00 Higher
Wheat Futures:	2 to 3 Lower

MILK:

The August Livestock Slaughter report supported what the milk production report showed for cow numbers. Cow numbers in August were up from a year ago, with dairy cattle slaughter down from a year ago. It was the lowest August slaughter number since 2007. Feed prices are expected to remain low, making it profitable to hold onto lower-producing cows. Lower milk prices have not increased slaughter and may not through the rest of the year. This will keep a sufficient supply of milk available to the market and limit the upside potential for prices.

CHEESE:

Cheese prices are expected to continue to chop around. Price increases will be selling opportunities. Buying by packagers and recutters for holiday demand continues, but without them having to chase the market higher.

BUTTER:

Butter inventory is expected to be below a year ago on the August Cold Storage report that will be released this afternoon. However, that does not mean the price will trend higher. The past two cold storage reports showed butter stocks 6% lower than the previous year. Reduced domestic demand has impacted the market significantly.

Thursday Closing Dairy Market Update - Cattle Slaughter Declines

OVERVIEW:

Class III futures were under pressure with the slight decline of the block cheese price. The bearish attitude prevalent in the market is keeping futures from any upside price retracement. Class IV futures closed higher, but that provided little consolation for producers. Dairy cattle slaughter declined in August.

MILK:

Milk futures have little underlying support to cause prices to trend higher. Milk production is improving seasonally as cow comfort improves. Cheese and butter production remains steady to higher. Cow numbers are increasing as farmers hold on to cows that generally would have been culled due to lower milk production. However, that cow is paid for, and it will produce another calf that will be worth a lot of money, making up for the reduced milk production. The next lactation has often turned out to be an improvement in production. The USDA released the August Livestock Slaughter report, which showed dairy cattle slaughter totaling 217,400 head. This was down 8,400 head from July and down 13,300 head from August 2024. This is the lowest August slaughter since 2007.

AVERAGE CLASS III PRICES:

3 Month:	$16.88
6 Month:	$16.82
9 Month:	$16.88
12 Month:	$16.96

CHEESE:

Cheese is readily available to the market, keeping buyers unaggressive. Buyers are not concerned about supply. The August Cold Storage report will be released on Friday. The inventory of cheese is expected to decrease, but it may be at a slower pace than a year ago and historically.

BUTTER:

Butter continued to be weak. The bounce today was good to see, but it might be short-lived. The volume of butter being traded on the spot market is satisfying immediate demand and meeting expected demand if manufacturers remain aggressive in moving supplies. Churning is active and will improve as more cream becomes available.

OUTSIDE MARKETS SUMMARY:

December corn closed up 1.50 cents per bushel at $4.2575, November soybeans closed up 3.25 cents at $10.1225 and December soybean meal closed down $2.90 per ton at $273.20. December Chicago wheat closed up 7.50 cents at $5.2700. December live cattle closed down $2.53 at $234.30. November crude oil is down $0.01 per barrel at $64.98. The Dow Jones Industrial Average is down 174 points at 45,947, with the NASDAQ down 113 points at 22,385.

Thursday Midday Dairy Market Summary - Milk Futures Show Further Pressure

OUTSIDE MARKETS SUMMARY:

CORN:	Steady
SOYBEANS:	Steady
SOYBEAN MEAL:	$3.90 Lower
LIVE CATTLE:	$2.45 Lower
DOW JONES:	168 Points Lower
NASDAQ:	140 Points Lower
CRUDE OIL:	$0.03 Lower

MIDDAY MARKET UPDATE:

The block cheese price slipped 0.25 cent, closing at $1.6375 with no loads traded. The barrel cheese price remained unchanged at $1.6450. The dry whey price increased 0.25 cent, closing at 64.75 cents. Class III futures are 28 cents lower to 2 cents higher. The butter price increased 2.00 cents, closing at $1.64 with 21 loads traded. Grade A nonfat dry milk increased 0.25 cent, closing at $1.1475 with 10 loads traded. Trading activity is nonfat dry milk has been heavy recently, with sellers wanting to move supplies. Class IV futures are 5-10 cents lower. Butter futures are 5.02 cents lower to 1.22 cents higher. The September contract shows the greatest loss in response to the AMS weekly prices. Dry whey futures are 0.25 0 0.52 cent higher. Cheese futures are 0.10 to 2.10 cents lower. The USDA will release the August Livestock Slaughter report Thursday afternoon.

Fluid Milk and Cream - Western U.S. Report 39

California milk production is stronger. Handlers generally indicate milk output is steadily increasing week to week during September. Manufacturers convey processing capacities are accommodating milk volumes in the state. Central valley processors note some unplanned downtime, but spot milk loads are finding homes. 

Milk production in Arizona and New Mexico varies from steady to stronger. Planned processing equipment projects continue to tighten processing capacities in some cases. 

Farm level milk output in the Pacific Northwest is noted as steady this week. Manufacturers convey milk intakes are at anticipated volumes. Some processors continue to further gear up new processing facilities and it is expected to continue into next year. 

Farm level milk output in the mountain states of Idaho, Utah, and Colorado varies from steady to stronger. Stakeholders indicate there continues to be plenty of milk to accommodate manufacturing needs. Class I and III demands are steady. Class II demand varies from lighter to steady. Class IV demand varies from lighter to stronger. 

Cream continues to be plentiful in the region. Cream demand is mixed. Cream multiples moved lower for the top end of the All-Classes range, and both ends of the Class II range. Contacts indicated offers at below flat prices, but no confirmed sales were noted. Condensed skim milk availability and demand are steady.

Thursday Morning Dairy Market Update - September Contract Adjusts to Weekly Prices Report

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Overnight trading was unusually high in the September through November Class III contracts. The September contract will cease trading next week on Tuesday, with the Federal Order prices announced on Wednesday. The AMS weekly prices report influenced the September contract, resulting in a decline of 14 cents. The strength in the cheese prices on Wednesday provided some support overnight as futures closed lower on Wednesday. Traders continue to scalp the market in an attempt to take a quick profit and are not holding long-term positions. USDA will release the August Livestock Slaughter report Thursday, indicating whether low milk prices have increased the culling of dairy cattle.

CHEESE:

The expectation is that cheese prices may have limited upside potential. Higher prices may trigger selling interest. Cheese supply is available to the market, with buyers confident that sufficient supply will remain through the end of the year.

BUTTER:

It is uncertain where the butter price will find a bottom. It is unusual for the price of butter to be below cheese. This indicates the bearishness of the market, with buyers confident over supplies and sellers continuing to offer it on the spot market. Increasing cream supplies will keep the churning active.

Wednesday Midday Dairy Market Summary - Butter Is Unable to Find Support

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	1 Lower
SOYBEAN MEAL:	$2.60 Lower
LIVE CATTLE:	$1.70 Lower
DOW JONES:	69 Points Lower
NASDAQ:	70 Points Lower
CRUDE OIL:	$1.53 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased a penny, closing at $1.64 with seven loads traded. The price initially declined to $1.6350 before rebounding from the low. The barrel cheese price increased 3.50 cents, closing at $1.6450 with one load traded. The strength in the cheese prices has not had an impact on Class III futures. They range from 15 cents lower to 3 cents higher, with most contracts trading at the lows of the day. The dry whey price increased 0.50 cent, closing at 64.50 cents with no loads traded. The butter price fell 6.00 cents, closing at $1.62 and a new low for the year. There were 13 loads traded. This is the lowest price since Aug. 14, 2021. Grade A nonfat dry milk remained unchanged at $1.1450 with 14 loads traded. Class IV futures have only traded in the November contract at 5 cents higher, which took place before spot trading. Butter futures are 0.02 cent higher to 3.35 cents lower. Dry whey futures are 0.77 cent lower to 0.60 cent higher. Cheese futures are steady to 1.20 cents lower.

Wednesday Morning Dairy Market Update - Spot Prices Have Limited Upside Potential

OPENING CALLS:

Class III Milk Futures:	4 to 8 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Class III futures held well due to support from the increase in the block cheese price. Class IV futures could not find support with the October and November contracts falling below $15.00. The spread between butter and cheese is now only 5 cents, after an extended period during which butter was substantially higher than cheese. Milk checks are going to be smaller through the end of the year if the current fundamentals persist. National Farmers, a farm marketing group, has proposed a $13.00 Dairy Margin Coverage Feed Price Index rather than the current $9.50 floor under the program. The current low feed prices are not providing any payments from the program, even at the low milk prices. It is uncertain how much traction this will gain in the government.

CHEESE:

The increase in the block cheese price may be met with selling as that has been the pattern over the past months. The current fundamentals do not suggest an extended increase in prices. The inventory is higher than a year ago, and cheese production is increasing. Prices have been moving counter-seasonally as the increased buying by packagers and recutters has not had an impact on the market this year.

BUTTER:

The price has fallen to the level it was four years ago and has not found support. The low bid placed a few weeks ago at $1.67 was an indication of where the market could be moving to, and the price is nearly there. The low price has yet to stimulate strong domestic demand. International demand is very strong, with world prices substantially higher.

Tuesday Closing Dairy Market Update - Most States Showed Milk Production Gains

OVERVIEW:

There was some life in the Class III market again, but that may be short-lived unless further gains can be seen in underlying cash. The implications of the August Milk Production report may limit the potential for extended price rallies.

MILK:

The strength in Class III futures through the first quarter of 2026 is not sufficient to change the bearish attitude of traders. Cow numbers continue to increase to the highest level seen in my records since 1999. If culling begins to increase due to low milk prices, it may take some time for it to have a significant impact on the milk supply. The August Milk Production report indicated only four of the top 24 states showed a decline in milk production from a year ago. Washington declined 8.1%. Illinois was down 3.7%. Both New Mexico and Ohio were down 0.2%. The other 20 states showed increased production from a year ago. The greatest increase was in Kansas with an increase of 20.4%, followed by South Dakota with a gain of 11.3%. Georgia gained 8.3%, Idaho was up 8.2% and Texas increased 7.7%. California gained 1.7% and Wisconsin up 2.0%.

AVERAGE CLASS III PRICES:

3 Month:	$17.16
6 Month:	$17.04
9 Month:	$17.04
12 Month:	$17.09

CHEESE:

The increase in the block cheese price does not indicate that support has been found. Buyers likely needed to get some cheese to fill orders and turned more aggressive. There is little reason for prices to increase very much or trend higher. Cheese demand seems to be balanced, with the block and barrel prices remaining close to each other.

BUTTER:

The price is now back to the lowest level since Aug. 23, 2021. End-users still have not turned into aggressive buyers even though the price is at a four-year low. They are confident prices will remain low through the end of the year. The low price should stimulate demand, but that has yet to be seen.

OUTSIDE MARKETS SUMMARY:

December corn closed up 4.50 cents per bushel at $4.2625, November soybeans closed up 1.00 cent at $10.1200 and December soybean meal closed down $2.80 per ton at $277.30. December Chicago wheat closed up 9.75 cents at $5.2050. December live cattle closed down $1.48 at $238.75. November crude oil is up $1.13 per barrel at $63.41. The Dow Jones Industrial Average is down 89 points at 46,293, with the NASDAQ down 216 points at 22,573. 

Tuesday Midday Dairy Market Summary - Butter Drops Further

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	1 Lower
SOYBEAN MEAL:	$3.40 Lower
LIVE CATTLE:	$1.80 Lower
DOW JONES:	111 Points Lower
NASDAQ:	199 Points Lower
CRUDE OIL:	$1.10 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 2 cents, closing at $1.63 with 15 loads traded. The barrel cheese price decreased 2.25 cents, closing at $1.61 with one load traded. Class III futures are higher in contracts through March, as the barrel price is not a part of the Class III pricing formula anymore, making the weakness not impactful on the market. It does have an impact on the market supply of cheese, but not directly on the pricing formula. The dry whey price was unchanged at 64.00 cents with no loads traded. Class III futures range from 10 cents lower to 31 cents higher. The butter price decreased 2.00 cents, closing at $1.68 with five loads traded. Grade A nonfat dry milk remained unchanged at $1.1450 with two loads traded. Class IV futures are 20 to 26 cents lower. Butter futures are 2.47 to 5.60 cents lower. Dry whey futures are 0.92 cent lower to 0.25 cent higher. Cheese futures are 1.60 cents lower to 3.30 cents higher.

Tuesday Morning Dairy Market Update - Bearish Milk Production Report Adds Pressure on the Market

OPENING CALLS:

Class III Milk Futures:	4 to 6 Lower
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	2 to 3 Lower

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The increase in milk production in August was about as expected, but the increase in cow numbers was not. Lower milk prices have not increased culling to this point. That may increase in time as milk prices remain low and the income from beef-on-dairy calves is not sufficient to maintain cash flow. Milk output is not slowing, and cooler weather has increased cow comfort. Milk production is increasing in most areas of the country. Higher milk production and increasing cow numbers will ensure an abundant milk supply. This will keep bottlers and manufacturers busy and supply readily available.

CHEESE:

It is uncertain whether cheese buyers will hold back. The milk production report showed that the milk supply should remain plentiful, resulting in higher cheese production. The cold storage report will be released on Friday and is expected to show a lower decrease in inventory than usual due to increased production and steady demand.

BUTTER:

It is uncertain where the butter price will find support. Lower prices have not stimulated demand sufficiently to tighten supplies. Strong butter production earlier in the year resulted in higher levels of butter being put into storage. Slower demand and continued butter production have left an abundance of butter available to the market.

Monday Closing Dairy Market Update - August Mik Production Up 3.2%

OVERVIEW:

Milk futures took a beating again today, posting substantial losses from lower spot prices. There is no bottom in the market as buyers see sufficient supplies, leaving them unaggressive. The August Milk Production report was bearish, with output up 3.2% over a year ago and cow numbers continuing to increase.

MILK:

Class IV futures were hit hard, with the October and November contracts barely hanging on to $15.00. If these prices come to fruition, they would be the lowest Class IV prices since March 2021. It does not appear that the butter price has found a bottom, which may put further pressure on futures. Class III futures fell, eliminating the gains of last week. The USDA released the August Milk Production report, which showed milk production in the top 24 states up 3.3%. Totaling 18.8 billion pounds. July production was revised to be 4.3% higher than the previous year. That was a revision higher of 0.7%. Milk production per cow was 28 pounds above August 2024 at 2,068 pounds. Cow numbers increased by 7,000 head from July. Milk production in the U.S. increased 3.2% from August 2024. Milk output was revised to 4.2% higher than a year ago for July. Production per cow was 27 pounds above a year ago. The number of cows in the country increased by 10,000 head from July, with the nation's herd totaling 9.53 million head. This is the highest cow numbers since my records back to 1999. This is a bearish report and shows that lower milk prices have not triggered heavier culling to this point.

AVERAGE CLASS III PRICES:

3 Month:	$16.92
6 Month:	$16.84
9 Month:	$16.89
12 Month:	$17.00

CHEESE:

Cheese prices showed further weakness and may continue to show weakness as a result of increasing milk production. Increasing cheese production will limit the decrease in cheese inventory for the rest of the year. Demand is not expected to increase sufficiently to reduce inventory as much as usual over the next few months. Buyers remain confident the supply of cheese will remain ample.

BUTTER:

A few weeks ago, I mentioned that there was a low unfilled bid that remained at the close of spot trading at $1.67. Many times, bids or offers that are placed far from the market eventually are where the price goes. It certainly appears that this will be another example of that. There is no indication of a bottom in the market.

OUTSIDE MARKETS SUMMARY:

December corn closed down 2.25 cents per bushel at $4.2175, November soybeans closed down 14.50 cents at $10.1100 and December soybean meal closed down $3.90 per ton at $280.10. December Chicago wheat closed down 11.75 cents at $5.1075. December live cattle closed up $4.50 at $240.23. November crude oil is down $0.12 per barrel at $62.28. The Dow Jones Industrial Average is up 66 points at 46,382, with the NASDAQ up 158 points at 22,789.

August Milk Production in the United States up 3.2 Percent

August Milk Production up 3.3 Percent        

Milk production in the 24 major States during August totaled 18.8 billion pounds, up 3.3 percent from August 2024. July revised production, at 19.0 billion pounds, was up 4.3 percent from July 2024. The July revision represented an increase of 139 million pounds or 0.7 percent from last month's preliminary production estimate.  Production per cow in the 24 major States averaged 2,068 pounds for August, 28 pounds above August 2024.   The number of milk cows on farms in the 24 major States was 9.08 million head, 172,000 head more than August 2024, and 7,000 head more than July 2025.   

August Milk Production in the United States up 3.2 Percent  

Milk production in the United States during August totaled 19.5 billion pounds, up 3.2 percent from August 2024.  Production per cow in the United States averaged 2,050 pounds for August, 27 pounds above August 2024.  The number of milk cows on farms in the United States was 9.52 million head, 176,000 head more than August 2024, and 10,000 head more than July 2025. 

Monday Midday Dairy Market Summary - Spot Prices Fall

OUTSIDE MARKETS SUMMARY:

CORN:	5 Lower
SOYBEANS:	15 Lower
SOYBEAN MEAL:	$4.10 Lower
LIVE CATTLE:	$4.30 Higher
DOW JONES:	98 Points Higher
NASDAQ:	141 Points Higher
CRUDE OIL:	$0.21 Higher

MIDDAY MARKET UPDATE:

The block cheese price fell 4.00 cents, closing at 41.61 with three loads traded. The barrel cheese price slipped 0.75 cent, closing at $1.6325 with no loads traded. Buyers are willing to pick up supply, but only at lower prices. The dry whey price remained unchanged at 64.00 cents with no loads traded. Class III futures are 1 to 37 cents lower. The butter price fell 5.00 cents, closing at $1.70 with six loads traded. This is another new low for the year and the lowest price since Oct. 7, 2021. Grade A nonfat dry milk slipped 0.25 cent to close at $1.1450 with four loads traded. Class IV futures are 32 to 35 cents lower. Butter futures are 0.10 to 7.50 cents lower. Dry whey futures are unchanged to 0.17 cent higher. Cheese futures are 0.40 to 3.20 cents lower. USDA will release the August Milk Production report this afternoon. I estimate milk production to be up 3.1% from a year ago and cow numbers to be 4,000 head higher than in July.

Monday Morning Dairy Market Update - Overnight Trade Shows Further Weakness

OPENING CALLS:

Class III Milk Futures:	4 to 7 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

There is little for traders to get excited about to begin the week. There is sufficient milk for demand, leaving plants with sufficient supply for manufacturing and bottling. The milk supply is not going to diminish as milk production has surpassed its seasonal low and will steadily increase over the next months. Demand has not been sufficient to tighten the market, resulting in prices moving counter-seasonally. USDA will release the August Milk Production report this afternoon. I estimate milk production to be 3.1% above a year ago and cow numbers to increase by 4,000 head from July.

CHEESE:

It may be difficult for cheese prices to increase much. If there is an increase, it will not last very long. Manufacturers want to limit inventory growth at the plant level and will continue to offer supply to the spot market even at lower prices. Buyers see no need to be aggressive due to uncertain demand.

BUTTER:

Butter continues to exhibit weakness, and that is not expected to change anytime soon. Buyers have sufficient supply on hand for this time of year and see no need to be aggressive. The sellers continue to move the supply at whatever price they can.

Friday Closing Dairy Market Update - July Fluid Milk Sales Decline 1.2%

OVERVIEW:

Milk futures close lower to end the week on a negative note. Some optimism had been shown earlier in the week, but that changed somewhat due to lower spot prices. Packaged fluid milk sales in July declined 1.2% from the previous year.

MILK:

Milk futures showed some strength during the week but ended with weakness, as the underlying cash closed with lower prices on Friday. Milk futures closed higher than a week ago, with Class III contracts posting better gains than Class IV. Class IV futures struggled due to the weakness of butter. This increases the potential that milk prices will have difficulty showing strength throughout the rest of the year. If the underlying cash prices cannot find support during the time of year in which buying interest is strong, there may be little to support prices later in the year. Fluid milk sales in July declined 1.2% from July 2024. Whole milk sales declined 0.4%, flavored whole milk gained 4.7%, reduced-fat milk declined 7.0%, low-fat milk declined 5.8%, fat-free skim sales gained 13.3%, flavored fat-reduced milk jumped 22.0%, buttermilk gained 1.6%, while other fluid milk product sales gained 8.2%. Organic whole milk sales declined 3.2%, organic flavored whole milk gained 4.5%, organic reduced-fat milk declined 3.1%, organic low-fat milk declined 15.6%, organic fat-free skim declined 16.2%, organic flavored fat-reduced milk fell 39.5%, while organic other fluid milk products fell 46.5%.

AVERAGE CLASS III PRICES:

3 Month:	$17.17
6 Month:	$17.08
9 Month:	$17.07
12 Month:	$17.13

CHEESE:

For the week, blocks increased 3.50 cents with 22 loads traded. The weekly average price was $1.6525. Barrels gained 2.75 cents with no loads traded. The weekly average price was $1.6290. Dry whey decreased by 1.75 cents with eight loads traded. The weekly average price was 61.70 cents. It is unusual for no loads to have traded in barrels during the week. Buyers may not have needed barrels and showed little interest in purchasing aggressively. Sellers may not have had much to offer, indicating that supply and demand may be balanced.

BUTTER:

For the week, butter fell 11 cents with 39 loads traded. The weekly average price was $1.7910. Grade A nonfat dry milk declined 1.75 cents with 33 loads traded. The weekly average price was $1.1475. The butter price fell to the lowest level for the year and the lowest price since Oct. 11, 2025.

OUTSIDE MARKETS SUMMARY:

December corn closed up 0.25 cent per bushel at $4.2400, November soybeans closed down 12 cents at $10.2550 and December soybean meal closed down $0.70 per ton at $284. December Chicago wheat closed down 1.75 cents at $5.2250. October live cattle closed up $1.20 at $233.58. November crude oil is down $0.90 per barrel at $62.36. The Dow Jones Industrial Average is up 173 points at 46,315, with the NASDAQ up 161 points at 22,631.

Friday Midday Dairy Market Summary - Butter Falls to a New Low

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	12 Lower
SOYBEAN MEAL:	Unchanged
LIVE CATTLE:	$0.92 Higher
DOW JONES:	136 Points Higher
NASDAQ:	95 Points Higher
CRUDE OIL:	$0.77 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 3.25 cents, closing at $1.65 with no loads traded. The barrel cheese price remained unchanged at $.1.64 with no loads traded. No buyers showed up to do any business. The dry whey price increased a penny, closing at 64.00 cents with one load traded. Class III futures posted nice gains ahead of spot trading, but quickly turned lower with the weakness of blocks. Futures are 34 cents lower to 1 cent higher. The butter price declined 5.50 cents, closing at $1.75 with 12 loads traded. There is basically no hope for the butter price through the rest of the year, with it being unable to show strength at this time. Grade A nonfat dry milk gained 0.25 cent closing at $1.1425 with five loads traded. Class IV futures are 43 cents lower to 20 cents higher. Butter futures are 0.97 to 6.90 cents lower. Dry whey futures are 1.02 to 2.75 cents higher. Cheese futures are 0.10 to 4.20 cents lower. 

Friday Morning Dairy Market Update - Uncertainty Will Dominate Ahead of Spot Trading

OPENING CALLS:

Class III Milk Futures:	5 to 10 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures made a nice rebound this week and have been able to hold those gains. Seasonal demand may have increased the buying interest in the underlying cash, providing some hope for increases in milk prices. However, traders remain cautious over further upside potential as prices historically peak in September or October. There is sufficient milk available for both bottling and manufacturing. Milk output has surpassed the low point of the year and should steadily improve.

CHEESE:

The inability of the block cheese price to show follow-through strength on Thursday keeps some negativity in the market, indicating the upside price potential may be limited. However, the barrel price holding steady may indicate there is support under the market, which may limit the downside weakness. Cheese prices may remain choppy.

BUTTER:

Buyers continue to purchase supplies without having to chase the price higher. Manufacturers continue to move butter to the spot market in an attempt to limit any further increase in inventory. Churning has increased as cream supplies increase. The price is expected to move back to the low again.