Wednesday Closing Dairy Market Update - Light Trading Activity Resulted in Limited Volatility

OVERVIEW:

Class III futures price movement was rather uneventful. Trading volume was very light as traders saw insufficient volatility for day trading. The World Agricultural Supply and Demand Estimates is scheduled for release on Thursday but will not be because of the government shutdown.

MILK:

Class III milk futures were mixed, with the limited gain in the block cheese price being offset by the decline in butter. This left little reason for traders to do much trading. The volatility was too light to even try to scalp the market for a small profit. Trading volume was very light. Class IV futures took another hit, posting double-digit losses. Milk production is increasing seasonally as cooler weather improves cow comfort. The butterfat content in milk is increasing and remains above a year ago. This provides more cream for the production of butter and Class II products. Protein levels are also higher, increasing cheese yields. The World Agricultural Supply and Demand report is scheduled to be released on Thursday, but it will not be released due to the government shutdown. The report contains USDA estimates for milk production, milk prices, and dairy product prices for this year and 2026. Those estimates will be released when the government is in full operation again. It does not look like it will be anytime soon, as there seems to be no progress made on their differences of opinion on the budget.

AVERAGE CLASS III PRICES:

3 Month:	$17.05
6 Month:	$16.97
9 Month:	$17.00
12 Month:	$17.12

CHEESE:

Spot milk prices are strengthening, with spot milk running from class to $3.00 over class this past week. Cheese output has increased and remains strong. Demand is steady and should slowly improve as the holiday season nears. However, the increase in cheese production may outpace the decrease in cheese inventory.

BUTTER:

There is a balance between supply and demand for butter. Unfortunately, the balance is at a low price. The price at the close of spot trading today is only 3.00 cents from the previous low for the year, with a strong possibility that it will revisit that level.

OUTSIDE MARKETS SUMMARY:

December corn closed up 2.25 cents per bushel at $4.2200, November soybeans closed up 7.50 cents at $10.2950 and December soybean meal closed up $1.10 per ton at $278.00. December Chicago wheat closed up .50 cent at $5.0725. December live cattle closed up $1.15 at $238.88. November crude oil is up $0.57 per barrel at $62.30. The Dow Jones Industrial Average is down one point at 46,602, with the NASDAQ up 255 points at 23,043.

Wednesday Midday Dairy Market Update - Cash Provides Little Direction

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	6 Higher
SOYBEAN MEAL:	$2.80 Higher
LIVE CATTLE:	$0.50 Higher
DOW JONES:	134 Points Higher
NASDAQ:	207 Points Higher
CRUDE OIL:	$1.00 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.25 cent to close at $1.7375 with no loads traded. The barrel cheese price remained unchanged at $1.74 with no loads traded. The dry whey price remained unchanged at 63.00 with no loads traded. Class III futures are mixed, ranging from 10 cents lower to 7 cents higher. The butter price decreased 1.75, closing at $1.65 with no loads traded and no buyers showing up during spot trading. Grade A nonfat dry milk remained unchanged at $1.15 with no loads traded and no buyers or sellers showing up during trading. Class IV futures have only traded in the February contract at 28 cents lower. Butter futures are 0.52 to 5.25 cents lower. Dry whey futures are unchanged. Cheese futures are unchanged to 0.80 cent lower.

Dairy updates - Unprecedented milk production growth

Increases in U.S. milk production, driven by unprecedented herd expansion, have been bearish for milk prices. The U.S. now boasts the largest dairy herd in over 30 years. Over the past six months alone, the herd has grown by 125,000 cows, marking the fastest six-month growth period on record. Despite tight replacement availability, producers have found ways to bring on new capacity. Producers are holding onto cows longer, as shown by slaughter rates down 5% year-to-date compared to 2024. This trend reflects a cautious approach to herd management. Instead of investing significant capital to expand their herds, dairies have maintained a more conservative strategy.

The increase in cow numbers has fueled significant growth in both milk production and milk solids. Milk production in July rose 3.2% year over year, while milk solids growth increased 4.8%. As milk production increases, prices are softening. In 2025, milk prices have declined and are expected to drop further in the second half of the year. However, many producers are still operating above breakeven, largely due to additional income from dairy-beef crossbreeding. Most of the dairy herd growth has occurred on larger farms, which are better equipped to manage lower prices thanks to their economies of scale. However, the profit margins for large producers will not be immune if supply outpaces demand.

Dairy markets have also been bearish. While butter and cheese exports have been a bright spot for U.S. dairy in recent months, falling prices in global markets are challenging U.S. export competitiveness. Global milk production increases are fueled by higher production in the E.U., South America, and New Zealand. (The only major dairy-producing region to experience a decline in milk production is Australia, where drought conditions have limited feed supplies and led to herd culling.) In September, butter markets saw spot prices drop to a three-year low, an unusual trend for this time of year when prices typically begin to rise due to increased holiday demand. Cheese prices are stable and are holding near $1.60. However, softening E.U. cheese prices limit upside potential.

Profitability

Dairy: Slightly profitable - Neutral 12-month outlook

Rising milk production and falling futures prices could strain profitability. However, low feed costs and beef-on-dairy income should support margins.

Wednesday Morning Dairy Market Update - Further Weakness Possible in the Spot Market

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures are unlikely to exhibit significant volatility before spot trading commences. The pattern of limited price strength has continued, leaving traders less likely to buy aggressively on any price strength in the underlying cash. Increasing milk production will provide a sufficient supply for bottling and manufacturing. This will provide sufficient supplies to meet consumer demand without having to dip into inventory as much as usual during the rest of the year. Cow numbers continue to increase as well as production per cow.

CHEESE:

Cheese prices are expected to remain in a range, with lower prices being buying opportunities and higher prices increasing the selling interest. This has been the pattern since November 2024 and is expected to remain.

BUTTER:

The weakness of spot butter over the past two days may result in further weakness and the price moving back down to the low again. Manufacturers have increased butter output due to increased cream supply. Excess butter supplies will be offered on the spot market to keep plant inventories from building.

Tuesday Closing Dairy Market Update - Class IV Milk Futures Suffer Significant Losses

OVERVIEW:

Class III futures closed mixed despite the weakness of cheese prices. Class IV futures suffered significant losses as the butter and nonfat dry milk prices declined. Sellers had butter to move and were willing to move it at lower prices.

MILK:

Milk futures step back after making brief gains. This keeps Class III futures in a sideways range and keeps seasonal premium out of the market for contracts next year. The weakness of butter put substantial pressure on Class IV futures, pushing the November contract below $15.00 again. The pattern indicates limited upside price potential through the end of the year. There is concern that spot prices could see further weakness moving through the rest of the year. Prices may hold through October, but further weakness could be seen later as buying for the holiday season is finished. On the other hand, milk production is expected to increase and remain above a year ago. The World Agricultural Supply and Demand report is scheduled to be released on Thursday, but it is unlikely due to the government shutdown. We can only presume that grain production remains large and prices low. This ensures plentiful feed supplies at reasonable prices.

AVERAGE CLASS III PRICES:

3 Month:	$17.03
6 Month:	$16.99
9 Month:	$17.02
12 Month:	$17.12

CHEESE:

Cheese prices are likely to remain in a range for the foreseeable future. Cheese production is increasing as milk output rises. Cheese production may increase similar to demand, resulting in inventory decreasing but at a slower pace than usual. The weakness of prices today leaves the market in a bearish posture.

BUTTER:

The weakness of butter over the past two days increases the potential for the price to revisit the lows of September 24 at $1.62. There had been hope that the market had found a bottom, but that cannot be certain due to the recent price movement. Buyers were able to purchase a substantial amount of butter today at lower prices, increasing their supply for the holidays.

OUTSIDE MARKETS SUMMARY:

December corn closed down 2.00 cents per bushel at $4.1975, November soybeans closed up 4.25 cents at $10.2200 and December soybean meal closed down $.20 per ton at $276.90. December Chicago wheat closed down 6.00 cents at $5.0675. December live cattle closed up $1.05 at $237.73. November crude oil is up $0.04 per barrel at $61.73. The Dow Jones Industrial Average is down 92 points at 46,603, with the NASDAQ down 153 points at 22,788.

Tuesday Midday Dairy Market Summary - Spot Prices Show Weakness

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$1.90 Higher
LIVE CATTLE:	$1.27 Higher
DOW JONES:	152 Points Lower
NASDAQ:	149 Points Lower
CRUDE OIL:	$0.11 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 1.50 cents, closing at $1.7350 with six loads traded. The barrel cheese price declined 3.00 cents, closing at $1.74 with no loads traded. The dry whey price remained steady at 63.00 cents with 10 loads traded. This was an unusually high volume traded in a single day in dry whey. Class III futures are mixed from 6 lower to 13 higher. The butter price declined 2.75 cents, closing at $1.6675 with 22 loads traded. There were four unfilled bids and eight uncovered offers remaining at the close. Grade A nonfat dry milk declined a penny to close at $1.15 with two loads traded. Class IV futures are being hit hard, ranging from 28 to 35 cents lower. Butter futures are 1.00 to 6.85 cents lower. Dry whey futures are 0.10 to 0.35 cent lower. Cheese futures are 1.00 cents lower to 1.10 cents higher.

Tuesday Morning Dairy Market Update - Traders Will Be Uncertain 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:	Mixed
Soybean Futures:	2 to 3 Higher
Soybean Meal Futures:	Steady to $1 Lower
Wheat Futures:	1 to 2 Higher

MILK:

Milk futures will fluctuate with the underlying cash market due to the absence of a specific trend developing. There is sufficient milk available to meet demand, which may keep prices stable and choppy. The time of year does not suggest there will be much upside price potential unless something unforeseen takes place, significantly impacting the market. Milk output is slowly increasing, along with the addition of more cows to the herds. The current milk prices and the high prices for calves have not increased culling. Cow numbers may continue to rise as farms increase their cow numbers.

CHEESE:

The increase in the milk supply has increased cheese production. Higher milk production is not overwhelming the market, as increased cheese production limits the decrease in inventory. The inventory of American cheese increased in August compared to July, rather than decreasing as it usually does. The reduced decline in inventory may be the pattern for the rest of the year.

BUTTER:

The decline in the butter price on Monday took some of the bullishness out of the market that had recently developed. It had been anticipated that delayed demand would support the market, bringing more aggressive buying into the spot market. However, Monday's decline eliminated the gains of last week, which dampened that enthusiasm.

Monday Closing Dairy Market Update - Markets Settled Back to Begin the Week

OVERVIEW:

Milk futures closed under pressure with Class IV contracts posting greater losses. The decline in the butter price put greater pressure on the market than the decline in cheese.

MILK:

Class III milk futures held up well despite the weakness of the block cheese price. Traders did not get carried away with futures when prices were increasing, but remained closely in line with the underlying cash. This reduced the need to eliminate the extra premium on price weakness. Milk output continues to slowly improve due to increased cow comfort and increased feed intakes. Grain harvest is progressing rapidly, ensuring a plentiful feed supply at reasonable prices. The high prices for replacement heifers are expected to increase further as the supply is not going to increase anytime soon, and beef-on-dairy calves can be sold for record-high prices.

AVERAGE CLASS III PRICES:

3 Month:	$16.99
6 Month:	$16.96
9 Month:	$17.01
12 Month:	$17.11

CHEESE:

The barrel supply seems to be tight, which should support the price. However, demand is not very strong, leaving the market with limited upside potential. If the weakness of blocks continues, it may pull the barrel price down with it. Cheese prices are expected to remain in the trading range they have been in since November.

BUTTER:

The butter price fell to the lowest level it has been since September 25, breaking below the recent sideways trading range. It can be seen that the butter price may have found a bottom, but it appears there may not be much upside price potential. Once buyers have purchased immediate needs, they are unwilling to increase inventory by bidding for further supplies.

OUTSIDE MARKETS SUMMARY:

December corn closed up 2.75 cents per bushel at $4.2175, November soybeans closed down .25 cent at $10.1775 and December soybean meal closed down $1.50 per ton at $277.10. December Chicago wheat closed down 2.50 cents at $5.1275. December live cattle closed up $2.18 at $236.68. November crude oil is up $0.90 per barrel at $61.78. The Dow Jones Industrial Average is down 63 points at 46,695, with the NASDAQ up 161 points at 22,942.

Monday Midday Dairy Market Summary - Butter and Blocks Fall Back

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	Unchanged
SOYBEAN MEAL:	$0.80 Lower
LIVE CATTLE:	$1.40 Higher
DOW JONES:	137 Points Lower
NASDAQ:	153 Points Higher
CRUDE OIL:	$0.86 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 4.00 cents, closing at $1.75 with seven loads traded. The barrel cheese price remained steady at $1.77 with no loads traded. The dry whey price remained unchanged at 63.00 cents with no trades. Class III futures are holding well, considering the weakness of blocks. Contracts are mixed, ranging from 16 cents lower to 8 cents higher. The butter price fell 5.50 cents, closing at $1.6950 with six loads traded. This eliminated the gains of last week and then some. The price initially declined to $1.68 before bouncing on buying interest at the lower price. Grade A nonfat dry milk remained unchanged at $1.16 with three loads traded. Class IV milk futures have not yet been traded with wide bids and offers. Butter futures are 1.52 to 7.77 cents lower. Dry whey futures have only traded in the May contract at 1.50 cents higher. Cheese futures are 1.10 cents lower to 0.50 cent higher.

Monday Morning Dairy Market Update - Traders Anticipate Stronger Cash

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	4 to 6 Higher
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Spot dairy prices have provided good support to Class III milk futures. It seems that delayed seasonal price strength has kicked in, providing support to milk futures prices. It is uncertain whether this support may continue for an extended duration or if it will be short-lived and follow a seasonal pattern. At least the price outlook has been improved by the recent strength of the underlying cash. Class IV futures have found support, but not to the extent that Class III futures have. Spot cheese prices had increased quite a bit more than butter did last week. There may be further upside price potential for spot prices this week until buyers have purchased enough for current needs and seasonal demand.

CHEESE:

Cheese prices have made significant gains, remaining in the wide sideways range they have been in since November. It seems unlikely that cheese prices will move above this top end of the trading range and surpass the previous high of $1.88 set in August.

BUTTER:

The butter price seems to have found support and may be developing a sideways trading pattern. Manufacturers are focusing on retail butter production rather than bulk production. There are sufficient bulk supplies readily available to the market.

Friday Closing Dairy Market Update - Class III Futures Eliminate Some of the Gains of the Week

OVERVIEW:

Class III futures closed on a negative note with some contracts posting double-digit losses. The August Dairy Products report was not released today due to the government shutdown.

MILK:

Class III futures did not follow the underlying cash. Futures eliminated the gains of the past two days. The weakness may have been due to no unfilled bids remaining in spot cheese after the trading period ended. Traders may be concerned that buyers may not want to push prices higher than the current level. Stronger milk production and lower feed prices should keep the milk supply sufficient for demand. Hopefully, prices will retain support and not revisit the lows. Class III futures continue to hold a limited premium throughout most of next year. USDA was scheduled to release the August Dairy Products report today, but it was not released due to the government shutdown.

AVERAGE CLASS III PRICES:

3 Month:	$17.08
6 Month:	$17.03
9 Month:	$17.06
12 Month:	$17.16

CHEESE:

For the week, blocks jumped 16.50 cents with 32 loads traded. The weekly average price was $1.7410. Barrels jumped 14.75 cents with two loads traded. One load was traded on Thursday and one today. The weekly average price was $1.71. Dry whey declined 1.75 cents with one load traded. The weekly average price was 64.10 cents. Cheese is showing the largest increase since the beginning of August. It has remained in a wide trading range since October 2024.

BUTTER:

For the week, butter increased 3.00 cents with 58 loads traded. The weekly average price was $1.7390. Grade A nonfat dry milk increased 0.50 cent with 27 loads traded. The weekly average price was $1.1580. The price seems to be developing a sideways trading range.

OUTSIDE MARKETS SUMMARY:

December corn closed down 2.75 cents per bushel at $4.1900, November soybeans closed down 5.75 cents at $10.1800 and December soybean meal closed down $.70 per ton at $278.60. December Chicago wheat closed up .50 cent at $5.1525. December live cattle closed up $1.03 at $234.50. November crude oil is up $0.26 per barrel at $60.74. The Dow Jones Industrial Average is up 239 points at 46,758, with the NASDAQ down 64 points at 22,781.

Fluid Milk and Cream - Western U.S. Report 40

California milk production is strengthening week over week from summer declines. Manufacturers report processing capacities are handling milk volumes, despite some production and transportation challenges. Handlers report spot milk loads are finding homes. According to the California Department of Water Resources, as of September 30, 2025, the 2024-25 Water Year ended with 0.89 inches below the historical mean in statewide precipitation. Despite the lower precipitation total, the estimated statewide reservoir storage is above the historical average. 

New Mexico and Arizona farm level milk output is steadily increasing from summer lows. Manufacturers indicate processing capacities are handling the rising milk volumes. 

Pacific Northwest milk production is stronger. Stakeholders report plenty of milk for processors and spot milk loads are widely available. Some sellers report challenges in finding homes for spot milk loads. 

In the mountain states of Idaho, Utah, and Colorado, week over week milk production is strengthening. These handlers indicate there is more than adequate milk volumes for processing. Spot milk loads are available. All Class demands are steady throughout the region. Stakeholders note 

UF milk demand is increasing because cream is readily available this year. Cream demand is mixed. Cream multiples sharply decreased for the bottom ends of the ranges and increased slightly for the top end of the ranges. Condensed skim milk availability is somewhat looser, and demand is somewhat stronger.

Friday Midday Dairy Market Summary - Cheese Prices Move Higher, Milk Futures Decline

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	1 Lower
SOYBEAN MEAL:	$1.10 Higher
LIVE CATTLE:	$0.07 Higher
DOW JONES:	438 Points Higher
NASDAQ:	43 Points Lower
CRUDE OIL:	$0.70 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 1.50 cents, closing at $1.79 with six loads traded. The barrel cheese price increased 5.00 cents, closing at $1.77 with one load traded. There were no unfilled bids or uncovered offers remaining at the close. The block price is at the highest level since Aug. 26, with the barrel price at the highest level since Sept. 3. It certainly appears that delayed seasonal buying has kicked in. The dry whey price decreased a penny, closing at 63.00 cents with no loads traded. Class III futures are significantly lower, posting double-digit losses as traders may be concerned over there being no unfilled bids remaining in spot cheese at the close. The butter price remained unchanged at $1.75 with four loads traded. There were three unfilled bids and six uncovered offers remaining at the close. Grade A nonfat dry milk increased a penny to close at $1.16 with six loads traded. Class IV futures have not yet been traded. Butter futures are 1.00 cent lower to 3.00 cents higher. Dry whey futures are 1.00 cent lower to 1.52 cents higher. Cheese futures are steady to 2.60 cents lower.

Friday Morning Dairy Market Update - Milk Futures May Settle Back Into the Weekend

OPENING CALLS:

Class III Milk Futures:	3 to 6 Higher
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures have made some nice gains, and hopefully, it will continue. It is possible that seasonal buying will increase after being delayed. The problem is that buyers have been purchasing supplies at lower prices. This may limit the need to purchase later, as inventory may be sufficient. The August Cold Storage report did show American cheese stocks increasing from July. Cheese stocks historically decline at this time of year. Increasing milk production will increase cheese output.

CHEESE:

The block cheese price has increased for four consecutive days, rising 15 cents. Buyers may be reaching a threshold soon and may not be interested in supporting the market further. Cheese is available, and cheese production remains steady.

BUTTER:

The butter price may be carving out a sideways trading range with buyers and sellers comfortable at the current level. Increasing cream supply and churning schedules should keep a sufficient supply available to the market. The butterfat content in milk remains higher than a year ago.

Thursday Closing Dairy Market Update - Spot Prices Lack Solid Direction

OVERVIEW:

Class III futures came back from their lows that were seen around the time spot trading took place. Class IV futures posted strong gains in later contracts. Spot milk prices have strengthened over the past week as demand seems to be improving.

MILK:

Class III milk futures moved within a 30-50 cents range, ultimately closing higher in most contracts. Milk production is slowly improving as cooler temperatures improve cow comfort. Class I demand is steady. Spot milk prices range from $1.00 below class to $1.00 above class. There has been some improvement in demand from manufacturing, keeping the milk supply from becoming burdensome. Steady cheese production and steady demand for cheese keep the supply from building. Higher milk production is expected to remain higher throughout the rest of the year. Hopefully, the balance of milk supply to demand will support prices and higher milk checks as time moves forward.

AVERAGE CLASS III PRICES:

3 Month:	$17.39
6 Month:	$17.28
9 Month:	$17.22
12 Month:	$17.28

CHEESE:

Cheese production is steady to stronger as milk receipts at the plant level are improving. Some plants indicate that they have been busy filling contracted orders, leaving spot supplies somewhat tight. However, the consensus is that cheese is readily available to meet demand. Packagers and recutters continue to purchase cheese in preparation for the holidays.

BUTTER:

Cream supplies have been increasing, putting pressure on cream prices. With the plentiful cream supplies, churning has been active with many plants indicating they are not looking to purchase cream from the spot market. Buyers have been looking to increase ownership to build supplies ahead of the holiday season.

OUTSIDE MARKETS SUMMARY:

December corn closed up 5.25 cents per bushel at $4.2175, November soybeans closed up 10.75 cents at $10.2375 and December soybean meal closed up $5.70 per ton at $279.30. December Chicago wheat closed up 5.50 cents at $5.1475. December live cattle closed down $1.03 at $233.48. November crude oil is down 1.30 per barrel at $60.48. The Dow Jones Industrial Average is up 79 points at 46,520, with the NASDAQ up 89 points at 22,844.

Thursday Midday Dairy Market Summary - Barrels Slip With One Load Traded

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	12 Higher
SOYBEAN MEAL:	$4.30 Higher
LIVE CATTLE:	$0.37 Lower
DOW JONES:	34 Points Higher
NASDAQ:	84 Points Higher
CRUDE OIL:	$1.25 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 2.00 cents, closing at $1.7750 with nine loads traded. The barrel cheese price slipped 0.50 cent, closing at $1.72 with one load traded. The dry whey price remained unchanged at 64.00 cents with no loads traded. Class III futures are mixed from 14 cents lower to 3 cents higher, with trading activity only through April. The butter price increased 2.50 cents, closing at $1.75 with eight loads traded. Grade A nonfat dry milk decreased 1.25 cents to close at $1.15 with 12 loads traded. Class IV futures are 6 to 22 cents higher. Butter futures are 0.22 cent lower to 5.75 cents higher. Dry whey futures are 0.50 to 1.50 cents lower. Cheese futures are 0.70 cent lower to 0.50 cent higher.

Thursday Morning Dairy Market Update - Late Support May Be Developing

OPENING CALLS:

Class III Milk Futures:	2 to 5 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Class III milk futures through the end of the year have increased around $1.00 per cwt over the past week, supported by higher cheese prices. It is uncertain whether this is a change in trend. Historically, the market reaches its peak in October, but this year has been anything but usual. Cow numbers continue to increase, with milk production per cow significantly higher than a year ago. This has kept the milk supply sufficient for demand. Dairy farms have retained more cows to keep the barns full rather than purchasing replacement heifers at a cost of more than $4,000. It is good to see the recent strength in the market, and hopefully, we are seeing delayed seasonal strength.

CHEESE:

Cheese prices have increased for three consecutive days. Buyer interest has improved while sellers have held back. The barrel price has been increasing with no sellers showing up during spot trading. Cheese production has been slowly increasing due to an increase in milk receipts at the plant level.

BUTTER:

The butter price may be developing a sideways trading range for the time being. Buyers have been more aggressive as they take advantage of the low price. Butter production has been increasing due to increasing cream supplies.

Wednesday Closing Dairy Market Update - September Class III Price is $17.59

OVERVIEW:

Class III nearby futures closed higher as they were supported by stronger spot cheese prices. Later contracts were mixed as traders did not want to support the futures for next year unless there was a change in trend. The August Federal Order prices were released and showed an increase in the Class III price and a decrease in Classes II and IV.

MILK:

Class III futures have rebounded around $1.00 per cwt from the lows of a week ago. This improves the outlook for milk prices, but the increase does not mean prices will remain, and the current futures prices are not much to write home about. At least the September Class III price was better than August, being announced at $17.59, up $0.35, but the price is down $5.75 per cwt from September 2024. The Class II price was announced at $17.39, down $1.79 from August and down $5.01 from a year ago. The Class IV price is $16.17, down $2.33 from August and down $6.12 from September 2024. The average soybean meal price has not been released, which is missing from the calculation of the August income over feed price. This will not be released until the government shutdown is over. There was not going to be a Dairy Margin Coverage program payment anyway, so it will not have an impact on dairy farms.

AVERAGE CLASS III PRICES:

3 Month:	$17.36
6 Month:	$17.20
9 Month:	$17.15
12 Month:	$17.23

CHEESE:

Block cheese has had three consecutive days of gains. The price is now 14.50 cents from the low that was established on September 22. Hopefully, a delayed seasonal buying event has kicked in, which will continue to support the market.

BUTTER:

The butter price may chop around at a higher level and develop a sideways trading pattern. This may build some support and limit further downside price weakness for the time being. Once buyers have met their immediate needs, they may be unwilling to remain aggressive in the market.

OUTSIDE MARKETS SUMMARY:

December corn closed up 1.00 cent per bushel at $4.1650, November soybeans closed up 11.25 cents at $10.1300 and December soybean meal closed up $.30 per ton at $273.60. December Chicago wheat closed up 1.25 cents at $5.0925. December live cattle closed down $0.28 at $234.50. November crude oil is down $0.59 per barrel at $61.78. The Dow Jones Industrial Average is up 43 points at 46,441, with the NASDAQ up 95 points at 22,755.

Wednesday Midday Dairy Market Summary - Cheese Prices Continue Higher

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	5 Higher
SOYBEAN MEAL:	$3.70 Lower
LIVE CATTLE:	$0.07 Lower
DOW JONES:	1657 Points Lower
NASDAQ:	805 Points Lower
CRUDE OIL:	$0.49 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 3.50 cents, closing at $1.7550 with two loads traded. The barrel cheese price increased 3.50 cents, closing at $1.7250 with no loads traded. There was an unfilled bid and an uncovered offer for a load of barrels, and one unfilled bid in barrels. The barrel price continues to be pushed higher by the bid to purchase a load, with the buyer unable to find a seller. The dry whey price slipped $0.75 cent to close at 64.00 cents with no loads traded. Class III futures are 1 cent lower to 39 cents higher. The butter price increased 1.50 cents, closing at $1.7250 with seven loads traded. Grade A nonfat dry milk increased 0.50 cent to close at $1.1625 with two loads traded. Class IV futures have traded 5.00 cents higher in the December contract. Butter futures are 1.22 cents lower to 2.60 cents higher. Dry whey futures are 0.75 cent lower to 1.00 cents higher. Cheese futures are steady to 4.20 cents higher. The September Federal Order prices will be announced this afternoon.

Wednesday Morning Dairy Market Update - Cheese Strength May Have Run Its Course

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Class III futures increased in the nearby contract on Tuesday but failed to generate strong buying interest in later contracts. This indicates they believe the market may not see much further upside price potential in the future. Futures contracts throughout next year show virtually no premium. Futures usually show seasonal premiums through the year in anticipation of stronger prices. Class IV futures show significantly more premium through 2026. The October contract is the front month as September finished trading on Tuesday. The September Federal Order class prices will be announced today.

CHEESE:

Spot cheese prices have made nice gains over the past few days, but that may have run its course if it follows the pattern seen much of the year. Demand may be improving as we move into the final quarter of the year. The supply of barrel cheese has been tighter as limited trading has been taking place. However, increasing cheese production may keep up with demand.

BUTTER:

There may be further weakness in butter today, as buyers have been able to purchase large amounts of butter over the past few weeks. The decline in price on Tuesday may indicate that much of the buying has been accomplished, and the price may fall back as buyers step back.