OVERVIEW:
Class III futures closed under pressure but did not fall as much as Class IV contracts did. The weakness in butter hit Class IV futures hard. The USDA increased its estimate for milk production and lowered its estimate for milk and dairy product prices.
MILK:
Milk futures took it on the chin again today with substantial pressure on Class IV contracts. October through February contracts fell below $16.00 and have moved significantly below Class III contracts. The market is extremely bearish, and it will take a monumental effort for that to change.
The World Agricultural Supply and Demand report added to the bearishness as the USDA raised its estimate for milk production. Milk production for this year was raised by 800 million pounds to a projected 230.0 billion pounds. If this comes to fruition, it would be 4.1 billion pounds higher than in 2024. The estimate for milk production in 2026 was raised by 900 million pounds from August to 231.1 billion pounds. The average Class III price was reduced by $0.30 to an average of $18.20 for this year. The price for next year was reduced $0.35 to an average of $17.40. The Class IV price was lowered by $0.80 to average $18.15 this year and was reduced by $1.60 next year to an average of $17.25. The All-milk price was lowered $0.65 to an average of $21.35. The average for next year was lowered $.50 to $20.40.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.70 |
| 6 Month: | $16.76 |
| 9 Month: | $16.85 |
| 12 Month: | $16.95 |
CHEESE:
For the week, blocks declined 7.50 cents with 25 loads traded. The weekly average price was $1.6535. Barrels declined 8.75 cents with 5 loads traded. The weekly average price was $1.6605. Dry whey gained 2.75 cents with eight loads traded. The weekly average price was $0.5875. The USDA reduced its estimate of the average cheese price this year to $1.8150, down 3.50 cents from August. The average price for 2026 was reduced by 3.50 cents to $1.7750. The dry whey price remained unchanged for this year at $0.5750 and was reduced by 0.50 cent next year to $0.5100.
BUTTER:
For the week, butter fell 16.25 cents with 28 loads traded. The weekly average price was $1.9565. Grade a nonfat dry milk declined 5.50 cent with 34 loads traded. The weekly average price was $1.1890. The USDA reduced its estimate of the butter price by 16.00 cents to an average of $2.36 for this year. They reduced the estimate for 2026 to $2.2450, down 30.50 cents compared to August. Nonfat dry milk was reduced by 2.00 cents to an average of $1.2550, with the price for 2026 reduced by 3.50 cents to an average of $1.22.
OUTSIDE MARKETS SUMMARY:
December corn closed up 10.25 cents per bushel at $4.3000, November soybeans closed up 12.75 cents at $10.4625 and December soybean meal closed up $.90 per ton at $288.60. December Chicago wheat closed up 2.00 cents at $5.2350. October live cattle closed down $2.30 at $229.98. October crude oil is up $0.32 per barrel at $62.69. The Dow Jones Industrial Average is down 274 points at 45,834, with the NASDAQ up 98 points at 22,141.
