Wednesday Closing Dairy Market Update - December Class III Price is $15.86

GENERAL OVERVIEW:

Milk futures took a hit due to the inability of the block cheese price to continue higher. The December Federal Order class prices were lower in all categories. The butterfat test for November was 0.07% higher than a year ago.

MILK:

Milk futures closed the last trading day of the year on a sour note. The weakness in block cheese and butter triggered liquidation. The markets will be closed on Thursday, giving traders some time to think about the potential for price direction on Friday. The fundamentals will not change as the New Year begins. Traders will likely continue to see a choppy market for some time to come. The USDA announced the Federal Order class prices for December. The Class II price is $14.41, down $0.13 from November and down $6.87 from December 2024. The Class III price is $15.86, down $1.32 from November and down $2.76 from a year ago. The Class IV price is $13.64, down $0.25 from November and down $7.10 from December 2024. The November Agricultural Prices report was released today. The average corn price was $3.98 per bushel, up $0.05 from October, but down $0.09 per bushel from November 2024. The supreme/premium hay price was $216.00 per ton, down $7 per ton from October and down $19 per ton from a year ago. The All-milk price was $19.70, down $0.30 per cwt and down $4.50 per cwt from November 2024. The average soybean meal price needs to be posted before the calculation can be made for income over feed for the Dairy Margin Coverage program. There were other prices of interest. The alfalfa price for November was $151 per ton, down $8 per ton from October and down $8 per ton from a year ago. The soybean price was $10.50 per bushel, up $0.79 per bushel from October and up $0.66 per bushel from a year ago. The average butterfat test was 4.46% compared to 4.35% in October and 4.39% in November 2024.

AVERAGE CLASS III PRICES:

3 Month:	$15.49
6 Month:	$16.08
9 Month:	$16.58
12 Month:	$16.82

CHEESE:

The weakness of blocks after two days of strength may indicate that buyers have purchased sufficient supplies and may now hold back and purchase on price weakness. The block cheese price has been moving sideways in a tight price range for nearly a month.

BUTTER:

The price closed just 1.50 cents above the low of the year. That does not paint a very positive picture to begin 2026. Large cream supplies and strong butter production will keep a sufficient supply available to the market.

OUTSIDE MARKETS SUMMARY:

March corn closed down 0.25 cent per bushel at $4.4025, March soybeans closed down 14.75 cents at $10.4750, and March soybean meal closed down $2.90 per ton at $299.40. March Chicago wheat closed down 3.75 cents at $5.0700. February live cattle closed up $1.13 at $231.60. February crude oil is down $0.54 per barrel at $57.41. The Dow Jones Industrial Average is down 304 points at 48,063, with the NASDAQ down 177 points at 23,242.

Wednesday Midday Dairy Market Summary - Block Cheese Shows Weakness

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	13 Lower
SOYBEAN MEAL:	$0.70 Lower
LIVE CATTLE:	$0.82 Higher
DOW JONES:	163 Points Lower
NASDAQ:	65 Points Lower
CRUDE OIL:	$0.31 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined a penny to close at $1.3750 with eight loads traded. To close the year, there were 27 loads traded over the past three days. The weakness in blocks and another day of a steady price for barrels were unable to support Class III futures. Futures contracts are 7 to 30 cents lower. The butter price slipped 0.50 cents, closing at $1.40 with seven loads traded. The price had been steady to higher for three consecutive days. Grade A nonfat dry milk remained steady at $1.1750 with three loads traded. Class IV futures have only traded in the June contract at a penny lower. Butter futures are 0.52 to 3.17 cents lower. Dry whey futures are 0.65 cent higher, with trading activity only in the February contract. Cheese futures are 0.20 to 2.20 cents lower. The November Federal Order class prices will be announced this afternoon. The November Agricultural Prices report will also be released, providing the average prices used in calculating income over feed for the Dairy Margin Coverage program. The report will not show the average price for soybean meal. This will not be released until Friday or Monday.

Wednesday Morning Dairy Market Update - Mixed Futures and Limited Trading Volume

OPENING CALLS:

Class III Milk Futures:	Steady to 5 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

It is uncertain how trading volume will be Wednesday. Sometimes, trading activity will be limited on the final day of the year. This may depend on the strength or weakness of the underlying cash. The current market fundamentals suggest prices will remain lower for some time to come as milk production is expected to be strong. More milk will be moving to bottling again as schools reopen after the holidays. However, that will not change the market as there is sufficient milk available for both bottling and manufacturing. The January contract is the front month as December finished trading on Tuesday. The December Federal Order class prices will be announced Wednesday. The trade anticipates a Class III price of $15.88 and a Class IV price of $13.56. USDA will also release the November Agricultural Prices report, which provides the prices used in calculating income over feed for the DMC program.

CHEESE:

It will be surprising if the block cheese price moves higher Wednesday. It has increased in the past two days with 19 loads traded. This may have filled the immediate demand that had surfaced. Once the orders are filled, there may be little reason to remain aggressive buyers.

BUTTER:

The butter price may coast through the end of the year with buyers and sellers comfortable with the current price. Churns will resume full schedules next week as cream supplies remain plentiful.

Tuesday Closing Dairy Market Update - Strong Close for Milk Futures

GENERAL OVERVIEW:

Milk futures had a strong day with double-digit gains in numerous contracts. The increase in the block cheese price fueled the rally in Class III futures. The strength of the overnight trade carried through Tuesday.

MILK:

The strength of milk futures was unexpected, as it had been anticipated that spot prices would drift through the end of the year. The buying interest in block cheese did not have an impact on milk futures on Monday, but that changed with the gain in the cheese price on Tuesday. There has not been a change in the fundamentals, which is a cause for concern, as it may indicate that there may be limited support under the market for the longer term. Milk production remains strong and is expected to be that way for some time to come. There was an article calling for farmers to cull cows to improve milk prices. That is a noble idea and would take in a usual market, such as we have seen in the past. If beef on dairy calf prices were not very strong, and replacement heifer prices were significantly lower, culling would follow the usual and historical pattern. But this is a different market, and farmers likely will have little desire to increase culling in the hope that milk prices may improve unless all do it collectively, which is unlikely. USDA will release the December Federal Order class prices on Wednesday.

AVERAGE CLASS III PRICES:

3 Month:	$15.71
6 Month:	$16.07
9 Month:	$16.53
12 Month:	$16.85

CHEESE:

The strength in the cheese price was welcomed, as buyers stepped up in the past two days, purchasing 19 loads of blocks. Wednesday is the final trading day of the year, and it will be interesting to see whether buyers will remain aggressive. Cheese production has increased as more milk has moved to manufacturing due to schools being closed for the holiday season.

BUTTER:

At least butter has been holding and not falling to new lows. This remains a concern, as cream supplies remain plentiful. Butter production is expected to remain strong, potentially increasing butter supplies significantly when demand slows due to the time of year.

OUTSIDE MARKETS SUMMARY:

March corn closed down 1.75 cents per bushel at $4.4050, March soybeans closed down 1.25 cents at $10.6225 and March soybean meal closed down $1 per ton at $302.30. March Chicago wheat closed down 2.25 cents at $5.1075. February live cattle closed up $1.50 at $230.48. February crude oil is down $0.13 per barrel at $57.95. The Dow Jones Industrial Average is down 95 points at 48,367, with the NASDAQ down 55 points at 23,419.

Tuesday Midday Dairy Market Summary - Block Cheese Pushes Higher

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	2 Lower
SOYBEAN MEAL:	$2.00 Lower
LIVE CATTLE:	$2.35 Higher
DOW JONES:	52 Points Lower
NASDAQ:	14 Points Lower
CRUDE OIL:	$0.05 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 4.00 cents to close at $1.3850 with nine loads traded. Buying interest has improved this week. Traders remain cautious as the potential for limited upside is possible. Once the current buying interest is satisfied, the price could drift lower. The barrel cheese price remained unchanged at $1.40 with no loads traded. The dry whey price remained steady at 73.00 cents with no loads traded. Class III futures are 1-35 cents higher, with February posting the greatest gain. The butter price increased 0.25 cent, closing at $1.4050 with four loads traded. Grade A nonfat dry milk increased 0.50 cent to close at $1.1750 with no loads traded. Class IV futures are 11-20 cents higher. Butter futures are 0.27-4.20 cents higher. Dry whey futures have not yet been traded, which is very unusual. Cheese futures are 0.20 cent lower to 2.60 cents higher. Today is the last trading day for December futures and options, with January taking over as the front month. The December Federal Order prices will be announced on Wednesday.

Tuesday Morning Dairy Market Update - Overnight Trade Follows Similar Pattern

OPENING CALLS:

Class III Milk Futures:	10 to 15 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	3 to 4 Higher
Soybean Meal Futures:	$0.50 to $1 Higher
Wheat Futures:	Mixed

MILK:

It appears traders intend to create volatility in an attempt to scalp that market for a slight profit again Tuesday. The overnight pattern was similar with no change in fundamentals. Higher early trade on Monday succumbed to selling as the underlying cash market showed little change, and earlier positions were liquidated. A similar setup seems to have developed overnight. Spot trading will dictate the direction of the futures. Tuesday is the last day of trading for December futures and options, with the December Federal Order prices announced on Wednesday.

CHEESE:

The increase in the block cheese price Monday may not continue. Strong buying interest developed, but that was only able to increase the price by a penny. Manufacturers continue to move supplies to the market to avoid building inventory. Low prices should stimulate demand, but the time of year may limit the increase in demand.

BUTTER:

The butter price has been holding, but is not expected to have much upside price potential anytime soon. There is concern the price could make a new low prior to the end of the year. Sellers may want to move more inventory before the end of the year and buyers may hold back

Monday Closing Dairy Market Update - Milk Futures Close Lower With Substantial Volatility

GENERAL OVERVIEW:

Milk futures came under pressure on Monday despite relative stability in the spot market. Trading volume was large in January and February futures, with over 1,000 contracts traded in each. Dairy exports in September declined 2% on a milk solids equivalent basis.

MILK:

Class III milk showed significant volatility on Monday, with contracts showing large price movements through May. The January contract showed the greatest swing of 43 cents from high to low. Very limited trading activity took place in Class IV futures. Dairy exports in September showed a decline of 2% on a milk solids equivalent basis. However, butter and cheese exports continued to show impressive growth. Year-to-date exports of dairy products remained 1.7% above the same period in 2024. However, the strong gains in butter and cheese exports compared to a year ago have had little impact on domestic prices as seen on the daily spot market. It will take a contraction in milk production and/or an increase in demand to change this anytime soon.

AVERAGE CLASS III PRICES:

3 Month:	$15.49
6 Month:	$15.86
9 Month:	$16.37
12 Month:	$16.72

CHEESE:

September exports of cheese increased 34.5%, totaling 52,854 metric tons over last year. Year-to-date exports are 17.2% above the same period a year ago. Lactose exports totaled 37,455 metric tons, down 5.4% from September 2024. Year-to-date exports are up 0.3% compared to the same period a year ago. Whey exports totaled 40,329 metric tons, down 13.3% from a year ago, with year-to-date exports down 3.6% from the previous year. Whey protein concentrate +80 exports totaled 8,098 metric tons, an increase of 9.9% from September 2024. Year-to-date exports are 10.4% higher than a year ago.

BUTTER:

Butterfat exports continue to show phenomenal growth, with September exports up 100.9% above a year ago, totaling 8,817 metric tons. Nonfat dry milk/skim milk powder exports declined 18.5% from September 2024, totaling 50,491 metric tons. Year-to-date exports are down 13.6%. Whole milk powder exports fell 29.3%, totaling 2,885 metric tons. However, year-to-date exports are 40% above the same period in 2024.

OUTSIDE MARKETS SUMMARY:

March corn closed down 7.75 cents per bushel at $4.4225, March soybeans closed down 9 cents at $10.6350 and March soybean meal closed down $4.10 per ton at $303.30. March Chicago wheat closed down 6 cents at $5.1300. February live cattle closed down $0.68 at $228.98. February crude oil is up $1.08 per barrel at $57.82. The Dow Jones Industrial Average is down 249 points at 48,462, with the NASDAQ down 119 points at 23,474.

Monday Midday Dairy Market Summary - Class III Futures Unable to Hold Gains

OUTSIDE MARKETS SUMMARY:

CORN:	7 Lower
SOYBEANS:	9 Lower
SOYBEAN MEAL:	$3.40 Lower
LIVE CATTLE:	$0.82 Lower
DOW JONES:	275 Points Lower
NASDAQ:	171 Points Lower
CRUDE OIL:	$1.22 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased a penny to $1.3450 with 10 loads traded. There were four unfilled bids and one uncovered offer remaining at the close. The barrel cheese price remained unchanged at $1.40 with no loads traded. The dry whey price remained unchanged at 73.00 cents with no loads traded. Class III futures are 21 cents lower to one cent. The only increase was in the December contract, with Tuesday being the last trading day for the contract. The butter price remained unchanged at $1.4025 with no loads traded. Grade A nonfat dry milk decreased a penny to close at $1.17 with no loads traded. Class IV futures have traded unchanged in March, the only contract traded. Butter futures are 0.20-1.75 cents lower. Dry whey futures are steady to 0.20 cent higher. Cheese futures are 0.30-2.50 cents lower.

Monday Morning Dairy Market Update - Surprising Overnight Strength

OPENING CALLS:

Class III Milk Futures:	10-15 Higher
Class IV Milk Futures:	5 to 8 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	7 to 10 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	2 to 3 Lower

MILK:

The strength in Class III futures overnight is surprising. There has not been any change in fundamentals over the weekend. The recent Milk Production report was bearish, while the Cold Storage report was neutral. High cow numbers and production per cow continue to be maintained. It seems as if traders want to create some volatility ahead of the year's end to move the market in their favor to liquidate positions at a profit. Caution will be exercised due to the steady spot butter and cheese prices on Friday. Recently, steady prices have been followed by further weakness. The December Federal Order class prices will be released on Wednesday. The November Agricultural Prices report will also be released on Wednesday.

CHEESE:

Cheese prices are not expected to see much movement, with upside price potential limited through the end of the year and moving into 2026. Demand generally slows during the first quarter, resulting in increased inventory. The November inventory was already 2 percent above a year ago.

BUTTER:

There is concern the butter price could move to a new low for the year again this week. Buyers are not expected to be aggressive, as the holiday demand has been met, and ongoing demand may not be as great. Low price may stimulate demand, but production will easily meet that demand.

Friday Closing Dairy Market Update - Class III Milk Futures Close Higher

GENERAL OVERVIEW:

Class III futures showed nice gains, with February showing a significant increase in price. The movement was not the result of a large change in spot prices, but likely some positioning ahead of the weekend.

MILK:

The strength in Class III milk futures was a surprise, given the limited movement of the underlying cash. Much of it might have been some short-covering and positioning ahead of the weekend. Trading was moderate and higher than anticipated for the day after Christmas. The movement of spot prices did not support the strength. The increase in dry whey helped, but other prices remaining steady has increased the concern of lower prices next week. That has been the pattern for some time as new lows have occurred after a day of stability. Spot milk prices have shown further weakness at the bottom of the price range. Prices are as low as $9 under class, while the top of the range is $0.50 over class. Surprisingly, some spot milk is maintaining a positive price. The December Federal Order class prices will be announced next week and will be significantly lower than November.

AVERAGE CLASS III PRICES:

3 Month:	$15.65
6 Month:	$16.01
9 Month:	$16.48
12 Month:	$16.80

CHEESE:

For the week, blocks decreased 2.50 cents with 10 loads traded. Barrel decreased 2 cents with no loads traded. Dry whey gained 2.50 cents with two loads traded.

There is little to create much volatility or price direction for the market. That is expected to continue through the end of the year. There is concern that prices may decline further through the first part of 2026 as milk production is expected to remain strong. At some point, prices will find a bottom, but there is no indication as to where that level will be.

BUTTER:

For the week, butter decreased 1.25 cents with 36 loads traded. Grade A nonfat dry milk gained 2.25 cents with 12 loads traded. The holiday season is affecting butter production as plants vary their production schedules. Heavy cream supplies will keep a limit on the upside price potential of butter. International remains strong, but it is not enough to support the price.

OUTSIDE MARKETS SUMMARY:

March corn closed down 1 cent per bushel at $4.50, March soybeans closed down 4 cents at $10.7250 and March soybean meal closed down $0.70 per ton at $307.40. March Chicago wheat was down 2.75 cents at $5.1900. February live cattle was up $1.10 at $229.65. February crude oil is down $1.36 per barrel at $56.99. The Dow Jones Industrial Average is down 20 points at 48,711, with the NASDAQ down 20 points at 23,593.

Friday Midday Dairy Market Summary - Only Spot Dry Whey Shows Price Movement

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	4 Lower
SOYBEAN MEAL:	$0.10 Higher
LIVE CATTLE:	$1.05 Higher
DOW JONES:	98 Points Lower
NASDAQ:	1 Point Higher
CRUDE OIL:	$1.10 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remained unchanged at $1.3350 and $1.40, respectively, with no loads traded. There was an unfilled bid and seven uncovered offers remaining in blocks. No one showed up to do any business in barrels. The dry whey price increased by 0.50 cent to close at 73.00 cents with one load traded. Class III futures are 1-28 cents higher. The butter price remained unchanged at $1.4025 with three loads traded. There were seven unfilled bids and one uncovered offer remaining at the close. Grade A nonfat dry milk remained unchanged at 1.18 with no loads traded. Class IV futures have not yet been traded. Butter futures are 1.05 cents lower to 0.50 cent higher. Dry whey futures are steady to 0.50 cent higher. Cheese futures are steady to 1.80 cents higher.

Fluid Milk and Cream - West U.S. Report 52

California week-over-week milk production is stronger. Although handlers convey December 2025 milk production is up from the prior month, some manufacturers note milk intakes this month are below anticipated volumes. Open processing capacity is tight this week, especially in the Central Valley, with some processors scheduling holiday downtime. Spot milk loads are available. 

Farm level milk output in Arizona and New Mexico varies from steady to stronger. 

Handlers convey heavy rains and flooding have negatively impacted cow comfort and lightened milk production for parts of the Pacific Northwest. Some stakeholders note the recent weather challenges have caused some transportation delays for haulers. Manufacturing facilities in the area that started receiving milk intakes this year continue to ramp up production paces. Processors indicate week-over-week downticks in milk production have not caused short milk volumes. 

arm level milk output in the mountain states of Idaho, Utah, and Colorado vary from steady to stronger. Spot loads are more available this week with some manufacturers planning downtime during the holiday. Class I demand is lighter, while all other Class demands are mixed, throughout the region. 

Cream volumes are readily available, and multiples are lower this week. Manufacturers requesting contracted condensed skim milk load deliveries are lighter, as expected for the holiday week. Stakeholders report lighter condensed skim milk demand in California, partly attributed to processing facilities permanently closing, but stronger demand outside of California. Condensed skim milk loads are more available this week.

Friday Morning Dairy Market Update - Limited Trading Activity Expected

OPENING CALLS:

Class III Milk Futures:	4-10 Higher
Class IV Milk Futures:	2 to 4 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Trading activity is expected to be light Friday, similar to what took place on Wednesday. Of course, movement in the underlying cash may generate greater volume if the movement is significant. Not much movement in futures is expected, with traders mainly trying to scalp the market for a small profit if realized. Both the Milk Production and Cold Storage reports were not conducive to much upside price potential in milk prices developing anytime soon. The Milk Production report was bearish with the strongest milk output change of the year compared to the previous year. The Cold Storage report was neutral to slightly bearish. The reports indicate that the upside price potential for milk may be limited for an extended time. The markets will have a full trading day.

CHEESE:

Cheese prices are expected to remain in a range. But there is concern that further weakness may unfold as holiday demand is complete and cheese production remains strong. It will be up to regular demand to carry the baton, but that demand may not be able to absorb the production.

BUTTER:

Butter may suffer the same fate as cheese, with the potential of further weakness. Strong butter production due to substantial cream supplies and inventory in November, only one percent below a year ago, does not bode well for the price potential in the near term.

Wednesday Closing Dairy Market Update - November Dairy Cattle Slaughter Falls Substantially From October

GENERAL OVERVIEW:

The trading volume was exceptionally thin today as expected. Class III futures closed lower with activity not representative of the movement of underlying cash. The November Livestock Slaughter report was released on Tuesday, Dec. 23, and showed a substantial decrease in slaughter.

MILK:

Trading volume was very light in milk futures. This light trade resulted in Class III futures slipping lower as there was little reason for traders to get excited over the minor gains in the spot market. The November Livestock Slaughter report was released on Tuesday, Dec. 23. I made an error in reporting that it was to be released today. Dairy cattle slaughter in November totaled 204,100 head. This was 38,900 head lower than October and 6,200 head lower than November 2024. This is the lowest monthly slaughter number since June and the lowest November slaughter since 2004. This supports the idea that farmers are holding onto cows due to the continued high calf prices. The markets will be closed on Thursday, Dec. 25, for Christmas and will reopen for trading at the regular time Christmas night.

AVERAGE CLASS III PRICES:

3 Month:	$15.47
6 Month:	$15.86
9 Month:	$16.35
12 Month:	$16.69

CHEESE:

The increase in the block cheese price was minor and not viewed as bullish. Trading activity in Class III futures was representative of this thinking, and the market did not react to its strength. Likely, the largest element was the light trading activity in milk futures. Also, the pattern of limited upside movement keeps traders cautious.

BUTTER:

The gain in butter is likely limited with concern that the increase will only result in a lower price again. That has been the pattern with the decline after an increase, moving to a new low. Butter production will slow somewhat through the holiday season, resulting in lower cream prices on the spot market.

OUTSIDE MARKETS SUMMARY:

March corn closed up 3.50 cents per bushel at $4.5100, January soybeans closed up 11.75 cents at $10.6325 and March soybean meal closed up $3.90 per ton at $308.10. March Chicago wheat closed up 4.75 cents at $5.2175. February live cattle closed down $1.45 at $228.55. February crude oil is up $0.02 per barrel at $58.40. The Dow Jones Industrial Average is up 289 points at 48,73, with the NASDAQ is up 51 points at 23,613.

Wednesday Midday Dairy Market Update - Butter and Block Cheese Showed Slight Gains

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	12 Higher
SOYBEAN MEAL:	$3.30 Higher
LIVE CATTLE:	$0.17 Higher
DOW JONES:	299 Points Higher
NASDAQ:	50 Points Higher
CRUDE OIL:	$0.02 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 0.25 cent to close at $1.4025 with eight loads traded. The barrel cheese price remained unchanged at $1.40 with no trades. The dry whey price increased a penny to close at 72.50 with no loads traded. Class III futures are 15 cents lower to 1 cent higher. The butter price increased 0.25 cent to close at $1.4025 with two loads traded. Grade A nonfat dry milk increased 0.50 cent to close at 41.18 with one load traded. Class IV futures have not yet been traded. Butter futures are 1.25 cents lower to 0.25 cent higher. Dry whey futures are 0.25-0.52 cent higher. Cheese futures are unchanged to 0.50 cent lower.

Wednesday Morning Dairy Market Update - Limited Volatility Expected

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	4 to 6 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	5 to 6 Higher

MILK:

Milk futures have been chopping around in a sideways pattern at the low-end of the trading range in nearby contracts. Later contracts have been able to hold some of the recent gains. The bearish November Milk Production report and the neutral to slightly bearish November Cold Storage report have not had much influence on the market. The current fundamentals do not suggest there will be much upside price potential for a while. Milk production is expected to continue to remain strong and cow numbers large. USDA will release the November Livestock Slaughter report Wednesday afternoon, showing the level of dairy cattle slaughter for the month. The markets will close at noon CST and will reopen Thursday night at the usual time.

CHEESE:

Further weakness of cheese prices may be possible as buyers remain unaggressive. Cheese supplies are plentiful, with demand likely slowing seasonally. The current level of the milk supply and strong cheese production is likely to limit the upside price potential for a while.

BUTTER:

The butter price is expected to have limited upside potential and the possibility of making a new low for the year over the next week. The minor increase on Tuesday may be temporary. However, the volume of loads traded might suggest buyers may be willing to step up at the current low price even though supplies are plentiful.

Tuesday Closing Dairy Market Update - November Butter and Cheese Inventory Declined

GENERAL OVERVIEW:

Class III futures held up well despite a further decline in spot cheese prices. Class IV futures showed limited trade. The November Cold Storage report was released on Tuesday, showing a decrease in all categories except Swiss cheese.

MILK:

Class III futures closed mixed but mostly higher. This was a bit surprising, as spot cheese prices declined on Tuesday. This does not indicate that traders believe a bottom has been found, but it was just some position-trading ahead of the holidays. Continued weakness of underlying cash does not bode well for milk prices moving through the end of the year. This also sets the stage for a negative beginning to 2026. Traders are a bit optimistic for the second half of 2026, with Class III futures above $17 and the October contract nearly at $18. Much of this strength may not be from an optimistic view of cheese and butter prices, but more of the potential for the dry whey price. Dry whey demand has kept the dry whey price in the 70-cent level, with some estimating dry whey prices may increase significantly later in 2026.

AVERAGE CLASS III PRICES:

3 Month:	$15.55
6 Month:	$15.91
9 Month:	$16.41
12 Month:	$16.74

CHEESE:

USDA released the November Cold Storage report on Tuesday. Cheese inventory declined in all categories except Swiss cheese. American cheese stocks declined 11.8 million pounds from October, totaling 787.3 million pounds. This is 2% above a year ago. Swiss cheese stocks increased by 461,000 pounds from October, totaling 22.0 million pounds. This was 6% below a year ago. Other cheese stocks declined 8.1 million pounds from the previous month, totaling 552.7 million pounds. This is 2% above a year ago. Total cheese stocks reached 1.362 billion pounds. This was down 19.5 million pounds from October, but 2% above November 2024.

BUTTER:

Butter futures bounced, but the gains lacked conviction. The higher spot price caused some short-covering. Butter inventory in November declined 18.2 million pounds to 210.5 million pounds. This was just 1% below the November 2024 inventory. The report is slightly bearish.

OUTSIDE MARKETS SUMMARY:

March corn closed up 0.50 cent per bushel at $4.4750, January soybeans closed down 1.75 cents at $10.5150 and March soybean meal closed up $2.30 per ton at $304.20. March Chicago wheat closed up 1.50 cents at $5.1700. February live cattle closed down $1.43 at $230.00. February crude oil is up $0.37 per barrel at $58.38. The Dow Jones Industrial Average is up 78 points at 48,442, with the NASDAQ up 133 points at 23,562.

Tuesday Midday Dairy Market Summary - Blocks Make Another New Low

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	1 Higher
SOYBEAN MEAL:	$3.10 Higher
LIVE CATTLE:	$1.57 Lower
DOW JONES:	133 Points Higher
NASDAQ:	104 Points Higher
CRUDE OIL:	$0.33 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 0.75 cent to close at $1.3325 with no loads traded. This is another new low for the year. There were three uncovered offers with no buyers showing up. The barrel cheese price declined 2.00 cents, closing at $1.40 with no loads traded and one uncovered offer. The dry whey price increased a penny to close at 71.50 cents with one load traded. Class III futures are 14 cents lower to 24 cents higher. The butter price gained 1.50 cents, closing at $1.40 with 23 loads traded. Grade A nonfat dry milk gained 0.50 cent to close at $1.1750 with six loads traded. Class IV futures have not yet been traded. Butter futures are 0.75-3.67 cents higher. Dry whey futures are 0.15-1.52 cents higher. Cheese futures are 0.60 cent lower to 0.80 cent higher. USDA will release the Cold Storage report this afternoon. This should bring inventory reports up to date as there has not been a report since the government shutdown. I generally do not make estimates on cold storage, but based on the movement of the underlying cash, it is likely that inventory has not decreased as much as usual due to strong butter and cheese production.

Tuesday Morning Dairy Market Update - Cold Storage Report Will Be Released

OPENING CALLS:

Class III Milk Futures:	Steady to 5 Lower
Class IV Milk Futures:	4 to 6 Lower
Butter Futures:	Steady to 1 Lower

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:

The November Milk Production report was bearish. There was nothing in it to give any indication of light at the end of the tunnel. Strong milk output per cow and higher cow numbers are not going to change anytime soon. Farmers are intent on pushing milk production to make up for lower milk prices, and they are retaining cows to do it. Reasonable feed prices and high calf prices continue to maintain overall profitability for many dairies. This does not indicate that this will change anytime soon. The overall weather has been good for maintaining strong milk output. There were only four of the top 24 states that showed a decrease in milk production in Movember. Washington showed a decline of 6.6%, followed by New Mexico, down 2.8%; Pennsylvania, down 1.1%; and Virginia, down 0.9%. USDA will release the Cold Storage report Tuesday, which should bring the report current.

CHEESE:

There is little expectation cheese prices will find support in the near term. Increased cheese production keeps plants moving cheese to the spot market at lower prices rather than building plant inventories.

BUTTER:

The butter price remains under pressure due to high production and reduced demand for the food service industry. Retail demand has been strong, but not strong enough to tighten the supply. Butterfat exports in September remained very strong, totaling 8,817 metric tons and 100.9% above a year ago. But that has not been sufficient to support the price

Monday Closing Dairy Market Update - November Milk Production Jumps 4.5%

GENERAL OVERVIEW:

Class III milk futures were mixed, with nearby contracts lower and later contracts higher. It was surprising that more pressure was not put on the market after the release of the November Milk Production report. The milk production report was bearish, with the highest increase in milk production for the year. Production increased by 4.5%, with increased cow numbers.

MILK:

Milk production continues to increase, with November showing the greatest year-over-year gain so far. Milk production in the top 24 states was up 4.7%, totaling 18.1 billion pounds. October milk production was revised 0.1% higher. Milk production per cow was 43 pounds higher than in November 2024. Cow numbers increased by 1,000 head from October. United States milk production was 4.5% higher than in November 2024, totaling 18.8 billion pounds. This is the largest percentage increase in year-to-date milk production. Milk production per cow was 41 pounds higher than in November 2024 at 1,963 pounds. Cow numbers in the country were steady with October and are 211,000 head more than a year ago at 9.57 million head. There is no evidence of it slowing down, and according to this, the nation's dairy herd may increase further over time. There was a huge rebound in the percentage of milk production in some states. Kansas increased 26.4% from a year ago. South Dakota was 10.8% higher. California was up 10.4%.

AVERAGE CLASS III PRICES:

3 Month:	$15.47
6 Month:	$15.84
9 Month:	$16.36
12 Month:	$16.68

CHEESE:

The block cheese price made another new low for the year, with the price moving to the lowest level since June 29, 2023. It does not look as if the price will rebound quickly as it did at that time. The fundamentals are very different. There is a plentiful supply of cheese.

BUTTER:

The butter price made a new low for the year, with the price at the lowest level since February 22, 2021. Retail demand has been strong, but food service demand has been lower than a year ago. The USDA will release the November Cold Storage report, and it should bring cold storage reports up to date. I am afraid that inventory is higher than expected based on the market price action. We have not had a cold storage report since the government shutdown in October.

OUTSIDE MARKETS SUMMARY:

March corn closed up 3.25 cents per bushel at $4.4700, January soybeans closed up 4.00 cents at $10.5325 and March soybean meal closed up $.80 per ton at $301.90. March Chicago wheat closed up 5.75 cents at $5.1550. February live cattle closed up $0.63 at $231.43. February crude oil is up $1.43 per barrel at $57.95. The Dow Jones Industrial Average is up 228 points at 48,363, with the NASDAQ is up 121 points at 23,429.

November Milk Production in the United States up 4.5 Percent

November Milk Production up 4.7 Percent        

Milk production in the 24 major States during November totaled 18.1 billion pounds, up 4.7 percent from November 2024. October revised production, at 18.7 billion pounds, was up 3.8 percent from October 2024. The October revision represented a decrease of 11 million pounds or 0.1 percent from last month's preliminary production estimate.  Production per cow in the 24 major States averaged 1,979 pounds for November, 43 pounds above November 2024.   The number of milk cows on farms in the 24 major States was 9.13 million head, 214,000 head more than November 2024, and 1,000 head more than October 2025.   

November Milk Production in the United States up 4.5 Percent  

Milk production in the United States during November totaled 18.8 billion pounds, up 4.5 percent from November 2024.  Production per cow in the United States averaged 1,963 pounds for November, 41 pounds above November 2024.  The number of milk cows on farms in the United States was 9.57 million head, 211,000 head more than November 2024, but unchanged from October 2025. 

Monday Midday Dairy Market Update - Cheese and Butter Prices Fall

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$0.90 Higher
LIVE CATTLE:	$0.60 Higher
DOW JONES:	228 Points Higher
NASDAQ:	119 Points Higher
CRUDE OIL:	$1.38 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 2.00 cents, closing at $1.34 and a new low for the year. There were two loads traded. The barrel cheese price remained unchanged at $1.42 with no trades. The higher barrel price over blocks has no impact on the weakness of blocks. The dry whey price remained unchanged at 70.50 with no loads traded. Class III futures are 30 cents lower to 19 cents higher. The January contract is being hit the hardest. The butter price declined 3.00 cents, closing at $1.3850 with eight loads traded. This is a new low for the year. Grade A nonfat dry milk gained 1.25 cents to close at $1.17 with five loads traded. Class IV futures are 3.00 cents lower to 10.00 cents higher. Butter futures are 0.70-3.60 cents lower. Dry whey futures are 0.20-1.72 cents higher. Cheese futures are 0.20-2.80 cents lower. USDA will release the November Milk Production report this afternoon. I estimate milk production to be up 3.5% from a year ago and cow numbers down 5,000 head from October.

Monday Morning Dairy Market Update - November Milk Production Report To Be Released

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 3 Higher
Soybean Futures:	2 to 4 Higher
Soybean Meal Futures:	$0.50 to $1.00 Higher
Wheat Futures:	4 to 5 Higher

MILK:

Milk futures have been unable to trend higher and possibly the next two weeks will be the same. Both weeks are shorter trading weeks due to Christmas and New Years. Milk production will not slow down, but more milk will be diverted to manufacturing due to schools being closed. Spot trading will influence the market Monday, while the November Milk Production report may influence futures later Monday and on Tuesday. The report will be released Monday afternoon and is expected to show higher milk production. I estimate milk production to be 3.5% above a year ago, with cow numbers to decline by 5,000 head from October.

CHEESE:

More milk is available for cheese production as milk has been diverted from bottling due to schools being closed for the next few weeks. Spot milk prices are declining as more milk is available for purchase. This may lead to further pressure on prices.

BUTTER:

There is potential for further weakness in the butter price before the end of the year. Food service demand is below a year ago, limiting the volume of butter being consumed. The Cold Storage report will be released on Tuesday, showing the level of butter inventory and whether it has been decreasing seasonally. This will be the first monthly Cold Storage report since the government shutdown and will bring the reports up to date. 

Friday Closing Dairy Market Update - Cheese Prices Close Higher for the Week

GENERAL OVERVIEW:

After being lower most of the day, Class III futures found some strength into the close. The same could not be said for Class IV futures, as they were steady to lower. Barrels have now gone five consecutive weeks with one load traded. Butter declined to a new low for the year.

MILK:

Milk futures closed lower for the week despite spot cheese prices improving slightly since the end of last week. The bearish attitude in the market cannot be shaken under the current fundamentals. The term being used by many is that the market is awash in milk. Yes, milk production is significantly higher than a year ago, yet milk plants are not overwhelmed with milk. More manufacturing capacity has come online, but spot milk prices up until recently have been higher than they were a year ago. Understandably, spot milk prices will decline as schools close for a few weeks and bottling slows. Spot milk prices will decline, as the market needs to clear the extra milk supply. Next week will be full of major reports. The November Milk Production report will be released on Monday. The Cold Storage report will be released on Tuesday and should bring cold storage reports up to date. The November Livestock Slaughter report will be released on Wednesday. The markets will then be closed on Thursday and open on Friday.

AVERAGE CLASS III PRICES:

3 Month:	$15.62
6 Month:	$15.94
9 Month:	$16.39
12 Month:	$16.70

CHEESE:

For the week, blocks increased a penny with 21 loads traded. The weekly average price is $1.3805. Barrels increased 0.75 cent with no loads traded. The weekly average price is $1.4040. There has only been one load of barrels traded over the course of five weeks. Dry whey declined 6 cents with seven loads traded. The weekly average price is 72.60 cents. The block price is only 1.50 cents above the low of the year.

BUTTER:

For the week, butter declined by 6.50 cents with 61 loads traded. The weekly average price is $1.4480. Grade A nonfat dry milk declined by 0.25 cent with 11 loads traded. The weekly average price is $1.1605. Butter made a new low for the year on Friday. This has been the lowest price since Feb. 19, 2021.

OUTSIDE MARKETS SUMMARY:

March corn closed down 0.75 cent per bushel at $4.4375, January soybeans closed down 3 cents at $10.4925 and January soybean meal closed down $0.80 per ton at $297.60. March Chicago wheat closed up 2 cents at $5.0975. February live cattle closed up $2.40 at $230.80. February crude oil is up $0.55 per barrel at $56.55. The Dow Jones Industrial Average is up 183 points at 48,135, with the NASDAQ is up 301 points at 23,308.

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

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	2 Lower
SOYBEAN MEAL:	$0.70 Lower
LIVE CATTLE:	$2.22 Higher
DOW JONES:	313 Points Higher
NASDAQ:	265 Points Higher
CRUDE OIL:	$0.65 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 0.75 cent, closing at $1.36 with four loads traded. The barrel cheese price increased 2 cents, closing at $1.42 with no loads traded. The price increased as a buyer became more aggressive. There was an offer above the market, with no interest in reducing the offer to accomplish business. The dry whey price remained unchanged at 70.50 cents with no loads traded. Class III futures are 2 cents lower to 4 cents higher. The butter price declined 2.50 cents, closing at $1.4150 with 29 loads traded. There were 18 unfilled bids and eight uncovered offers remaining at the close of spot trading. This is a new low for the year. Grade A nonfat dry milk increased 0.25 cent to close at $1.1575 with no loads traded. Class IV futures are 2 to 6 cents lower. Butter futures are steady to 3.52 cents lower. Dry whey futures are 0.75 to 1.75 cents lower. Cheese futures are 0.30 cent lower to 1.10 cents higher.

Friday Morning Dairy Market Update - Mixed Price Activity Expected Ahead of Spot Trading

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The pressure on milk futures did not carry over into the overnight trade as the market adjusted to weaker cash prices. The weakness on Thursday eliminated any hope prices could stabilize through the holidays.

The milk supply is plentiful and is not expected to decline anytime soon. The November Milk Production report will be released Monday. The expectations are for production to be significantly higher than a year ago. There is little bullishness to be found in the market. The passage of the Whole Milk for Healthy Kids Act is positive for allowing 2% and whole milk back in schools, but it is not expected to have much impact on milk prices.

CHEESE:

The block price may be heading back down to the lows again, as the recent buying interest has been filled. Manufacturers will continue to offer cheese to the spot market to limit building inventory at the plant level. Barrels continue to see no trading activity. Over the course of the past five weeks, there has been only one load of barrels traded on the spot market.

BUTTER:

The price is only a penny above the low of the year. The weakness on Thursday may indicate the low will be revisited Friday or next week. Much of the holiday buying is complete with only regular demand having to carry the baton. Strong butter production keeps supplies readily available.