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.

Fluid Milk and Cream - Western U.S. Report 51

California handlers indicate unfavorable weather is somewhat negatively impacting week over week milk production. Year over year milk production remains strong. Stakeholders indicate balancing plants are taking in milk volumes and running busy production schedules. Some spot milk loads are available. 

Milk production in Arizona and New Mexico is steady. 

Farm level milk output in the Pacific Northwest is mixed. Handlers convey warmer than anticipated temperatures negatively impacting milk production, decreasing snowpack, and causing significant flooding. No transportation difficulties reported. 

Milk production in the mountain states of Idaho, Utah, and Colorado is generally steady; however, some Idaho stakeholders convey record high temperatures are negatively impacting weekly milk output. Spot milk loads continue to be available. Manufacturers note more balanced milk production with processing capacities this week. Stakeholders in the region indicate slaughter numbers are up. Class I and III demands are steady. Class II and IV demands vary from lighter to steady. 

Cream is readily available. Reported cream multiples are higher at the bottom end of both ranges for week 51. Condensed skim milk demand is lighter and loads are available.

Thursday Closing Dairy Market Update - Milk Futures Fall Due to Lower Spot Prices

GENERAL OVERVIEW:

Class III futures were hit hard due to the decline in spot prices. This renews the bearishness in the market.

MILK:

Not only have prices declined in the spot markets, but milk demand has slowed. Schools will be closed for the holiday period, diverting fluid milk to manufacturing. Cheese and butter production has already been strong, keeping sufficient supplies readily available for the market. Milk production remains strong overall and is expected to see a significant increase over a year ago on the December Milk Production report to be released on Monday. There is little expectation of reduced milk output from an increase in culling. Culling may increase due to the lower milk prices, but the reduction in cow numbers may be slow. More milk is already finding its way to the spot market, with prices this week ranging from $6.00 under class to $1.00 over. Prices are expected to decline further over the next few weeks.

AVERAGE CLASS III PRICES:

3 Month:	$15.59
6 Month:	$15.91
9 Month:	$16.38
12 Month:	$16.69

CHEESE:

The decline of the block cheese price today opens the way for a retest of the low. There is increasing concern that the price may fall below that level before the end of the year. Milk production will need to slow, or demand will need to remain strong, or both, before cheese prices can trend higher. There is no indication that this will take place moving into 2026.

BUTTER:

Hopefully, the butter price will be able to hold support. The concern is that the price is only a penny from the low seen in late November. Cream supplies remain heavy, with more anticipated to be available over the holiday season. Some plants will reduce production, which will put more cream on the spot market.

OUTSIDE MARKETS SUMMARY:

March corn closed up 4.00 cents per bushel at $4.4450, January soybeans closed down 6.00 cents at $10.5225 and January soybean meal closed up $.20 per ton at $298.40. March Chicago wheat closed up 1.50 cents at $5.0775. February live cattle closed down $1.15 at $228.40. February crude oil is up $0.07 per barrel at $55.88. The Dow Jones Industrial Average is up 66 points at 47,952, with the NASDAQ up 313 points at 23,006.

Thursday Midday Dairy Market Summary - Spot Prices Fall

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	4 Lower
SOYBEAN MEAL:	$1.10 Higher
LIVE CATTLE:	$2.42 Lower
DOW JONES:	253 Points Higher
NASDAQ:	412 Points Higher
CRUDE OIL:	$0.46 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 3 cents to close at $1.3675 with no loads traded. An unfilled bid and an uncovered offer remained. Clearly, the recent buying interest has been filled. The barrel cheese price remained unchanged at $1.40 with no loads traded. The dry whey price declined 1.50 cents, closing at 70.50 with four loads traded. Class III futures are 26 cents lower to 2 cents higher, with only the July contract posting a gain. The butter price declined 2.75 cents, closing at $1.44 with three loads traded. This eliminates all of the gains since Dec. 1. Grade A nonfat dry milk slipped 0.25 cent to close at $1.1550 with seven loads traded. Class IV futures have traded 26 cents lower in the December contract and 3 cents higher in the June contract. Those are the only two months traded so far today. Butter futures are 0.10-3.50 cents lower. Dry whey futures are 0.85 cent lower to 0.95 cent higher. Cheese futures are steady to 2.50 cents lower.

Thursday Morning Livestock Market Update - Overnight Trade Shows Weakness

OPENING CALLS:

Class III Milk Futures:	5 to 12 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The strong early Class III futures prices on Wednesday quickly turned lower due to the cheese prices remaining steady and the decline in dry whey. Cheese prices remaining steady may be viewed as possible support, but the recent pattern has been that a day of steady cheese prices has been followed by weakness. The dry whey price was the negative item that took support out of the futures. Dry whey has been holding well, but a decline of 3 cents is significant as each penny move in dry whey is equal to a 6-cent move in the Class III price. Milk production is not expected to slow down anytime soon, and the November Milk Production report that will be released on Monday is expected to confirm that.

CHEESE:

Cheese production is strong and may increase further over the next few weeks as more milk will be diverted from bottling to manufacturing. Most orders for the holiday season are filled, with some fill-in buying continuing to take place to fill immediate orders. This may keep cheese prices choppy.

BUTTER:

The butter price is likely to remain in a range. Buying interest has been strong with retail demand improving due to the holiday season and the low price. Heavy cream supplies will keep production strong after the holiday season, which could harm price and limit upside potential.

Wednesday Closing Dairy Market Update - Class III Milk Futures Close Lower through May Contract

GENERAL OVERVIEW:

Class III futures closed lower through the May contract, while later contracts closed higher. Class IV futures closed steady to higher. The Global Dairy Trade auction trade-weighted average declined 4.4%. Congress passed the Whole Milk for Healthy Kids Act, allowing schools to offer whole milk again.

MILK:

It seems as though there is some support under the market, at least for the time being. Some optimism may have come from Congress passing the Whole Milk for Healthy Kids Act. The passage of this act reverses the 2012 restriction on offering whole milk in schools. Statistics showed that school milk consumption decreased when schools were limited to offering only 1% and skim milk for lunch programs. Whole milk and reduced-fat milk were eliminated in 2012 with the intention of reducing childhood obesity. This had no impact on the growing problem of childhood obesity, with research showing that milk fat has a neutral or positive effect on health. This is a huge win for dairy.

The Global Dairy Trade auction trade-weighted average declined 4.4%, and the ninth consecutive decline. Anhydrous milk fat declined 5.2% to $5,602 per metric ton or $2.54 per pound. Butter declined 2.5% to $5,012 or $2.27. Cheddar cheese remained at 0.0% to $4,646 per metric or $2.11 per pound. Lactose jumped 14.4% to $1,430 per metric ton or $0.65 per pound. Skim milk powder declined 2.1% to $2,431 per metric ton or $1.10 per pound. Whole milk powder declined 5.7% to $3,161 per metric ton or $1.43 per pound. Mozzarella gained 6.7% to $3,395 per metric ton or $1.54 per pound.

AVERAGE CLASS III PRICES:

3 Month:	$15.72
6 Month:	$16.05
9 Month:	$16.51
12 Month:	$16.79

CHEESE:

Cheese prices held during spot trading, but that does indicate the support has been established. There have been other times when cheese prices remained steady only to decline as aggressive selling resumed. There are sufficient cheese supplies available for buyers, which will limit the potential upside price.

BUTTER:

It was good to see buyers step in aggressively to purchase butter. Holiday demand is good and keeping a floor under the market for the time being. Strong butter production could mean lower prices moving post the holiday season if demand slows.

OUTSIDE MARKETS SUMMARY:

March corn closed up 4.00 cents per bushel at $4.4050, January soybeans closed down 4.50 cents at $10.5825 and January soybean meal closed down $4.20 per ton at $298.20. March Chicago wheat closed down 3.25 cents at $5.0625. February live cattle closed down $1.15 at $229.55. January crude oil is up $0.67 per barrel at $55.94. The Dow Jones Industrial Average is down 228 points at 47,886, with the NASDAQ down 418 points at 22,693.

Wednesday Midday Dairy Market Summary - Milk Futures Fall From Early Highs

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	3 Lower
SOYBEAN MEAL:	$3.80 Lower
LIVE CATTLE:	$0.65 Lower
DOW JONES:	209 Points Lower
NASDAQ:	343 Points Lower
CRUDE OIL:	$0.75 Higher

MIDDAY MARKET UPDATE:

There was optimism that the cheese price would find further support today. Class III futures were significantly higher, with the February contract gaining as much as 34 cents before spot trading took place. Both the block and barrel cheese prices remained unchanged at $1.3975 and $1.40, respectively, with no loads traded. The weakness in dry whey put pressure on Class III futures. The dry whey price declined 3.00 cents, closing at 72.00 cents with two loads traded. Class III futures retreated from the highs and are mixed, ranging from 4 cents lower to 15 cents higher. The butter price increased 1.50 cents, closing at $1.4675 with 18 loads traded. Grade A nonfat dry milk slipped 0.50 cent to close at $1.1575 with no loads traded. Class IV futures are 7-12 cents higher. Butter futures are 2.10 cents lower to 0.87 cent higher. Dry whey futures are unchanged to 0.80 cent lower. Cheese futures are 0.90 cent lower to 0.30 cent higher.

Wednesday Morning Dairy Market Update - Milk Futures Stronger Ahead of Cash Trade

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

MILK:

Class III milk futures were able to close mostly higher, with gains limited as traders remain cautious over how much more strength block cheese will have. However, overnight trade indicates continued interest in buying. Milk production slowed a bit over the past week as very cold weather impacted cow comfort. The weather pattern has changed with milder weather in the forecast for much of the rest of the month. Milk production will remain strong, keeping a sufficient supply available to the market. More milk will be diverted to cheese production over the next few weeks as schools will close for the holidays. Spot milk should be readily available for those who want it.

CHEESE:

The block cheese price has increased for three consecutive trading days and may soon run out of strength. Once the immediate buying interest is satisfied, the buying interest may not be as strong. Higher cheese production may keep sellers aggressive, as they do not want to limit inventory growth.

BUTTER:

The price may revisit the low as the recent weakness may indicate holiday demand is slowing. The hope is demand will remain sufficient to provide a level of support through the end of the year. Butter production is strong due to the heavy cream supply.

Tuesday Closing Dairy Market Update - October Income Over Feed Was $10.52

GENERAL OVERVIEW:

Class III futures closed higher, with Class IV futures mixed. The increase in the block cheese price provided further support. The USDA released the October Agricultural Prices report on Monday with an income over feed price of $10.52.

MILK:

Class III milk prices were higher again, but traders are being cautious. The expectation is that the upside price potential is limited. Support from underlying spot cheese prices may be short-lived once holiday demand is finished. The recent buying is from immediate orders for fresh cheese that need to be filled. Once that is satisfied, prices may fall back again due to the market entering the time of year during which demand is slower. Some had been hoping that there would be some Dairy Margin Coverage payments to help minimize the lower milk price, but that is not the case. USDA released the Agricultural Prices report for October and updated prices since the government shutdown. The October income over feed price was $10.52, leaving no payment for the month. The average corn price was $3.93, down $0.07 from September. The premium/supreme hay price was $223.00 per ton, up $1.00 from the previous month. The soybean meal average price was $300.68 per ton, down $0.37. The All-milk price was $20.00, down $0.40 per cwt from September. USDA did some catching up with the Agricultural Prices report. The result was an income over feed price for September of $10.87 and a price of $11.52 for August. If the current prices hold, there could be a Dairy Margin Coverage payment for December, which would not be known until the end of January. There may not be a payment for November due to the level of milk prices seen in November. November prices will be released at the end of December.

AVERAGE CLASS III PRICES:

3 Month:	$15.82
6 Month:	$16.15
9 Month:	$16.53
12 Month:	$16.79

CHEESE:

The increase in the block cheese price provided support to Class III futures. However, traders are exercising caution due to the price increasing for three consecutive days. Once the current orders are filled and buying interest is complete, the prices are expected to drop back down again. This has been the pattern, and the time of year is likely not going to change that. Once the holiday demand is finished, lower prices are expected again.

BUTTER:

There had been hope that butter had found support and that demand was going to be sufficient to keep buying interest strong at the lower price level. That still may be true, but the indication is that the price will remain low for an extended period.

OUTSIDE MARKETS SUMMARY:

March corn closed down 3.25 cents per bushel at $4.3650, January soybeans closed down 9.00 cents at $10.6275 and January soybean meal closed down $1.10 per ton at $302.40. March Chicago wheat closed down 11.25 cents at $5.0950. February live cattle closed up $0.15 at $230.70. January crude oil is down $1.72 per barrel at $55.10. The Dow Jones Industrial Average is down 302 points at 48,114, with the NASDAQ up 54 points at 23,111.

Tuesday Midday Dairy Market Summary - Block Cheese Shows Further Strength

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	11 Lower
SOYBEAN MEAL:	$0.90 Lower
LIVE CATTLE:	$0.05 Lower
DOW JONES:	385 Points Lower
NASDAQ:	100 Points Lower
CRUDE OIL:	$1.29 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 1.75 cents to close at $1.3975 with six loads traded. This is the third consecutive trading day posting a gain. The barrel cheese price remained unchanged at $1.40 with no loads traded. The dry whey price remained unchanged at 75.00 cents with no loads traded. Class III futures are mixed, ranging from 4 cents lower to 6 cents higher. The butter price declined 1.25 cents, closing at $1.4525 with two loads traded. The gain in the butter price since Dec. 1 has been eliminated. Grade A nonfat dry milk declined 0.75 cent to close at $1.1625 with one load traded. Class IV futures are 2-12 cents lower. Butter futures are 0.30 cent lower to 2.20 cents higher. Dry whey futures are 1.60 cents lower to 1.50 cents higher. Cheese futures are 0.10 to 1.20 cents higher. The Global Dairy Trade action trade-weighted average declined 4.4% today. This is the 10th consecutive trading session showing a decline.

Tuesday Morning Dairy Market Update - Milk Futures May Trade Lower Ahead of Cash

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures rallied, but the strength may be short-lived. Traders may use the recent strength as a selling opportunity. The overall attitude of traders is bearish and they will use price swings to scalp the market for a profit if they guess correctly. Market fundamentals do not suggest a change in the trend. Milk production remains strong and above a year ago. Slaughter is showing signs of increasing, but the volume of culling is expected to be low. Feed prices are expected to remain reasonable, reducing the cost per cwt of milk. Milk production per cow is significantly higher than a year ago, with components higher. This is improving cheese yields and cream supplies. This is not expected to change anytime soon.

CHEESE:

The buying interest for blocks over the past two days may have nearly run its course. Buyers needed to step up to fill immediate orders that were received and came to the spot market to fill those orders. This is not expected to continue, as it seems unlikely that buying will continue even though prices are low. Buyers have no interest in building inventory.

BUTTER:

A further decrease in the butter price is possible, as there is quite a bit of butter available due to heavy churning activity. Retail demand may be filled, and overall demand may slow after the holiday season. The butter price is expected to remain rangebound through the end of the year.

Monday Midday Dairy Market Summary - Block Cheese Higher Again

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	4 Lower
SOYBEAN MEAL:	$0.08 Higher
LIVE CATTLE:	$1.03 Higher
DOW JONES:	129 Points Lower
NASDAQ:	119 Points Lower
CRUDE OIL:	$0.96 Lower

MIDDAY MARKET UPDATE:

The block cheese price jumped 3 cents higher today, settling at $1.38 with 11 loads traded. There were four bids remaining at the close. The barrel cheese price fell 1.25 cents at $1.40 with no loads traded. The dry whey price dropped 1.5 cents to 75.0 cents with one load traded. There were three offers and six bids remaining at the close. Class III futures are trading anywhere from 16 cents lower to 10 cents higher over the noon hour. The butter price fell 1.5 cents, closing at $1.4650 with nine loads traded today. Grade A nonfat dry milk increased 1 cent, closing at $1.17 with three loads traded. Nonfat dry milk is currently trading 0.025 to 0.375 cents higher. Class IV futures have not yet traded for the day. Butter futures are 0.725 to 1.025 cents lower. Dry whey futures are 0.225 to 1.1 cents lower. Cheese futures are 0.3 to 1.5 cents lower.

Monday Morning Dairy Market Update - Futures May Begin the Week Where They Left Off

GENERAL COMMENTS:

Last week was another banner week for cash cattle, with Northern dressed cattle trading as much as $12.00 higher, while Southern live cattle traded $6.00 higher. Futures reflected the higher cash with stronger prices for the week. However, even with the volatility, the price changes for the week were the least they have been for a while. Last week, Feb live cattle had a $6.125 range, and Jan feeders had a $12.50 range. That is the narrowest range for February live cattle since the week of Oct. 3, with January feeders having the narrowest since the week of Oct. 17. Neither live cattle nor feeder futures closed the price gaps remaining in the market. There is an indication that packers have purchased a significant number of cattle ahead for the remainder of the month. Boxed beef prices closed mixed on Friday, with choice down $0.67 and select up $0.76. JBS is closing its Swift Beef Company facility in Riverside, California, on Feb. 2, 2026. The company indicates the closing is not due to tight beef supplies, but to streamline operations.

Hog futures were able to close higher, but the gains were not due to stronger cash or cutouts, but due to continued optimism. The gains in futures were not large, but they were gains. The December contract is off the board with February as the spot month. The June contract closed above $100 and the highest close since Oct. 22. The National Direct Afternoon Hog report showed cash down $0.41. Pork cutouts declined $0.63. Cutouts have been higher for the week, which increases the confidence of traders to buy into the market and hold current positions.

	BULL SIDE		BEAR SIDE
1)	Substantially higher cash cattle in the past two weeks indicate overall support remains strong.	1)	There is an indication that packers have purchased a significant number of cattle to meet their needs for the remainder of the year.
2)	Cattle futures have chart gaps above the market that may be filled sooner rather than later.	2)	Boxed beef prices continued to weaken with overall lower cutout prices last week. Demand has slowed over the past few weeks.
3)	The trend in hog futures remains higher with traders gaining confidence over further strength. The funds continue to add to their long positions.	3)	Packers remain less aggressive in the cash hog market with higher weights allowing them to purchase fewer hogs.
4)	Pork cutouts found further support last week. Demand has been improving.	4)	Hog futures may be overbought and ready for a price correction soon.

Friday Closing Dairy Market Update - Cheese Futures Make a New Weekly Low

GENERAL OVERVIEW:

It was a tough week for cheese futures. Thursday's low futures prices brought the lowest prices we've seen since April of 2024. While prices had a small bounce today, the damage had already been done with Thursday's declines. An increased interest in Block Cheese in the cash market could be a sign that the bottom is in.

MILK:

Class III Milk prices fell this week, due to pressure in the cheese market. While specialty product sales have increased, such as eggnog and holiday flavors of milk, have picked up overall, the supply of fluid milk available is abundant, and no relief is in sight for the American dairy farmer. Class III futures settled 2 cents higher today on the December contract and 13 cents lower on the week.

AVERAGE CLASS III PRICES:

3 Month:	$15.87
6 Month:	$16.18
9 Month:	$16.52
12 Month:	$16.75

CHEESE:

For the week, the block cheese price fell 3.00 cents with 45 loads traded. The barrel cheese price remained unchanged at 1.4125 with no loads traded. Continuing the trend of minimal to no loads traded for the fifth week in a row for barrels. Traders seem to have found a bottom in cheese with an increase in activity in blocks today after setting a new low for the year yesterday. The thinking may be that the market has limited downside from here. The dry why price increased 1 cent this week, with 3 loads traded.

BUTTER:

For the week, butter increased 0.50 cents with 8 loads traded. Grade A nonfat dry milk fell 1 cent with 6 loads traded. Butter futures closed the week out 1.975 cents lower, and traders anticipate lackluster trade with no bullish news in sight. Cream supplies are still plentiful heading into winter, with butterfat percentage high.

OUTSIDE MARKETS SUMMARY:

March corn closed down 5.75 cents per bushel at $4.4050, January soybeans closed down 16.75 cents at $10.7675 and January soybean meal closed down $1.40 per ton at $305.60. March Chicago wheat closed down 3.25 cents at $5.2925. February live cattle $0.4250 lower at $229.80. January crude oil is $0.16 per barrel lower at $57.44. The Dow Jones Industrial Average is 229 points lower at 48,474, with the NASDAQ down 401 points at 23,193.

Fluid Milk and Cream - Western U.S. Report 50

California handlers report steady or lighter week over week milk production. Some manufacturers note milk intakes are slightly below anticipated volumes for the first part of the month. December 2025 year over year milk production is up significantly. Some dairy producers note fat components continue to be strong. Stakeholders convey balancing plants continue to run full schedules and homes are being found for spot milk loads. 

Farm level milk output in Arizona and New Mexico is generally steady. 

Pacific Northwest handlers note warmer than typical winter temperatures thus far are contributing to steady milk production. Manufacturers convey milk intakes are at anticipated volumes. Dairy commodity production facilities that started receiving milk deliveries as of this year continue to gear up towards running at full capacities. 

Week over week milk production is mixed in the mountain states of Idaho, Utah, and Colorado. Some stakeholders note tighter spot milk load availability. All Class demands are steady throughout the region. 

Plenty of cream is available to cover demands. Reported cream multiples are lower for week 50. Condensed skim milk demand and availability is steady.

Friday Midday Dairy Market Summary - Block Cheese in Demand

OUTSIDE MARKETS SUMMARY:

CORN:	5 Lower
SOYBEANS:	14 Lower
SOYBEAN MEAL:	$0.02 Lower
LIVE CATTLE:	$0.60 Lower
DOW JONES:	168 Points Lower
NASDAQ:	328 Points Lower
CRUDE OIL:	$0.04 Higher

MIDDAY MARKET UPDATE:

The block cheese price moved slightly above the new low for the year set Thursday, with the 0.5-cent increase in the price closing at $1.35 with an astounding 28 loads traded. The barrel cheese price remained unchanged at $1.4125 with no loads traded. The dry whey price increased 0.5 cents at 76.50 cents with one load traded. Class III futures are 2 to 50 cents higher over the noon hour. The butter price remained unchanged at $1.48 with no loads traded. Grade A nonfat dry milk decreased 0.50 cent, closing at $1.16 with one load traded. Nonfat dry milk is currently trading anywhere from 0.025 cents lower to 0.95 cents higher. Class IV futures have not yet traded for the day. Butter futures are 0.55 cent lower to 0.025 cents higher. Dry whey futures are mixed from 0.275 cents higher to 0.25 cent lower. Cheese futures are 0.2 to 5.4 cents higher.

Friday Morning Dairy Market Update - Traders Wait For Price Direction

OPENING CALLS:

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

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:

Class III milk futures have remained in a sideways range with limited reason for strength. Futures have held fairly well despite the continued weakness of the block cheese price. Class IV futures have seen a similar pattern with less activity and limited volatility. The market remains bearish with little potential for strength for possibly the next few months. Milk production will remain strong, and demand will need to hold to keep prices from further weakness. Seasonally, demand slows after the holiday season, which could indicate further price weakness may be coming. Traders will be cautious ahead of spot trading as further weakness in block cheese may be seen.

CHEESE:

Further weakness is expected for the block cheese price. The slight decline on Thursday may continue as buyers hold back and purchase on an as-needed basis while manufacturers continue to move supply to the market to limit inventory growth.

BUTTER:

The butter price is expected to hold steady and show minor strength moving through the holiday season. However, there is little reason to believe the price will see much upside potential. Churns are running full weekly schedules, keeping the supply of butter readily available. The inventory is potentially decreasing at a slower pace than usual during this time of year.

Thursday Closing Dairy Market Update - Milk Futures Show Limited Volatility

GENERAL OVERVIEW:

Class III futures closed lower while Class IV contracts were mixed. Traders again found little to set market direction other than limited upside potential. Blocks continue to show weakness.

MILK:

Most have resigned to the fact that milk prices will remain low for an extended period of time. Farmers continue to push milk production to compensate for lower prices. Cash flow has tightened significantly, but the desire to keep barns full remains. Prices move in cycles, and the idea is that this cycle may run its course as well. However, the fundamentals that have put the market in the current situation are different than any other time. This may extend the period of low milk prices. Culling is expected to increase, but it may take some time to reduce the herd to a point where milk supply will tighten. The best would be to increase demand, but that may be difficult during the first half of the year when demand is usually slower. Winter weather is having an impact in some areas, reducing milk output and causing transportation issues. However, those are disruptions and do not have a long-term impact.

AVERAGE CLASS III PRICES:

3 Month:	$15.56
6 Month:	$15.88
9 Month:	$16.28
12 Month:	$16.58

CHEESE:

There has not been a monthly cold storage report released since the government shutdown. The report will be released on Dec. 23, and hopefully, it may show less inventory than anticipated, which could generate some excitement in the market. However, strong cheese production may have limited the decline of inventory and may provide a reason as to why cheese prices are this low.

BUTTER:

Traders are not getting overly excited about the butter price holding and slowly increasing. The increased butterfat content in milk, strong milk production, and plentiful cream supplies will limit the upside price potential of butter for some time. The best we may hope for is that the market may have established a bottom.

OUTSIDE MARKETS SUMMARY:

March corn closed up 2.25 cents per bushel at $4.4650, January soybeans closed up 2.25 cents at $10.9350 and January soybean meal closed up $.90 per ton at $302.10. March Chicago wheat closed up 4.00 cents at $5.3350. February live cattle closed up $2.43 at $230.95. January crude oil is down $0.57 per barrel at $57.89. The Dow Jones Industrial Average is up 646 points at 48,704, with the NASDAQ down 60 points at 23,594.

First dip in milking herd in 2025

USDA’s October milk production report revealed the first monthly decline in the U.S. dairy cow inventory for 2025. The national herd contracted by 6,000 head from September to October, bringing the total to 9.58 million cows. Despite this dip, the herd remains over 200,000 head larger than a year ago, reflecting earlier expansion trends. This reduction aligns with historically tight replacement heifer inventories, which have fallen to a record low of 2.922 million head, with a heifer-to-cow ratio of 41.9, the lowest since 1991.

Class IV milk prices have dropped sharply throughout 2025, falling over $6 per cwt to $14.30 in October, down from earlier highs. Class III prices have also softened, averaging $16.91 per cwt in October, though their decline has been less severe. These price drops have pressured producer margins and future stability could be threatened by herd expansion or weakening consumer demand.

Despite the smaller herd, October milk production rose 3.7% year over year to 19.5 billion pounds, driven by a 1.5% increase in productivity per cow and higher milk component levels. California, Idaho, and Kansas led production gains, while Washington and New Mexico saw declines.

Butter production surged over the summer, with August output up 8% year over year, supported by new processing capacity in the Pacific Northwest and California. This expansion has weighed on prices, with butter prices below $2 per pound for the first time since early 2024. Competitive pricing and abundant supply have positioned the U.S. as a leading butter exporter. Butter exports are up more than 130% over the past 12 months, reaching 10-year export highs. This is largely attributed to butter prices being more than $0.75 and $1.00 lower than New Zealand and European exports, respectively.

Cheese production has grown more modestly, with August output up less than 1% year over year. However, prices have softened significantly. Spot prices for cheese barrels dropped $0.31 from late October to late November, averaging $1.49 per pound in the last week of November. Cheese block and barrel prices have declined 20–30% from last year, fueling record export demand. Year-to-date cheese exports are up 14.1% and are set to surpass the record 1.12 billion exported pounds in 2024.

While producer margins have been supported by lower feed costs and supplemental income from beef-on-dairy sales, risks remain. Cooperative assessments in states like Washington and California are adding financial strain. If milk prices continue to weaken or consumer demand softens, profitability could erode further. Strong holiday demand for butter and cheese may provide short-term price support, but structural oversupply in butterfat markets suggests continued volatility heading into early 2026.

Profitability

Dairy: Breakeven profitability - Bearish 12-month outlook

Milk prices remain weak, and while lower feed costs and beef-dairy income offer support, margins are likely to tighten over the next year, increasing the risk of losses if prices or demand soften further.

Thursday Midday Dairy Market Summary - Block Cheese Declines

OUTSIDE MARKETS SUMMARY:

CORN:	2 Higher
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$2.00 Higher
LIVE CATTLE:	$3.80 Higher
DOW JONES:	619 Points Higher
NASDAQ:	102 Points Lower
CRUDE OIL:	$1.04 Lower

MIDDAY MARKET UPDATE:

The block cheese price moved to a new low for the year, with the 0.25-cent decline in the price closing at $1.3450 with one load traded. The barrel cheese price remained unchanged at $1.4125 with no loads traded. The dry whey price remained unchanged at 76.00 cents with no loads traded. Unfortunately, Class III futures are unchanged to 14 cents lower. The butter price increased 0.25 cent to close at $1.48 with no loads traded. Grade A nonfat dry milk decreased 0.50 cent, closing at $1.1650 with no loads traded. Nonfat dry milk continues to trade within a tight range. Class IV futures are 2 cents higher with only the March and June contracts traded. Butter futures are 0.50 cent lower to 0.50 cent higher. Dry whey futures are unchanged to 0.75 cent lower. Cheese futures are 1.00 cents lower to 0.20 cent higher.

Thursday Morning Dairy Market Update - Traders Wait for Direction From the Spot Market

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

There had been no trade overnight in milk futures until after 6 a.m. CST when some activity took place in the February Class III contract at 8 cents lower. This may indicate that increased caution will permeate the market ahead of spot trading. The last few times the block cheese price held steady for a trading period, further weakness developed. This may dominate the minds of traders again today. Market fundamentals have not changed, keeping the market in a bearish grip. Increased holiday demand for milk and dairy products should keep support under the market, but it may not result in higher prices.

CHEESE:

The steady spot cheese prices on Wednesday provided no direction for traders. More milk will be available for cheese production through the holidays as fluid milk will be diverted from school accounts to the spot market. The current inventory levels of cheese are uncertain. USDA will not release a cold storage report until Dec. 23. The inability of cheese prices to increase at this time of year increases the possibility of further weakness after the holiday season.

BUTTER:

The stability of the butter price has certainly been welcomed. However, the longer the price remains limited in strength, the greater the potential of weakness after the holiday demand slows. The Northeastern region of the country reported that butter production is stronger than usual for this time of year. The butterfat content in milk remains at record levels, and cream is readily available. 

Wednesday Closing Dairy Market Update - Milk Futures Show Limited Volatility

GENERAL OVERVIEW:

Class III futures closed mixed, with most contracts posting gains, supported by the increase in the dry whey price. Stronger demand for milk is reported in the regions due to more holiday-type milk products being produced and increased demand for baking.

MILK:

Milk futures showed mixed trade on light volume. The minor movement in spot prices left little reason for traders to become excited. Milk production is expected to remain strong with more processing capacity being built. Hiland Dairy in Tyler, Texas, is expanding its facility. According to a report from eDairy News, "the investment poured into the Tyler plant represents a concerted effort to modernize and increase dairy processing infrastructure. This multifaceted expansion targets key areas, including the integration of new, high-speed production lines and optimization of existing milk packaging and handling systems. The completion of this construction project is poised to create one of the region's most technologically advanced processing hubs, ensuring tighter quality control and increased standardization across a wide range of fluid milk products." The report also goes on to say, "Operationally, the enhanced capacity will dramatically increase the plant's milk throughput, allowing Hiland Dairy to process higher volumes of raw product from local dairy farmers. This is a crucial element for regional dairy economics, providing producers with a more stable and high-volume destination for their supply." It seems a little hard to believe that milk production will remain strong if milk prices continue at current low levels for an extended period. But the market will go in cycles.

AVERAGE CLASS III PRICES:

3 Month:	$15.55
6 Month:	$15.91
9 Month:	$16.32
12 Month:	$16.61

CHEESE:

Cheese production is strong and is expected to increase through the end of the month, as more milk will be diverted to manufacturing when schools close for a few weeks. Spot milk prices are in a wide range, from $2.00 below to $3.50 over class. Spot prices are expected to weaken as more milk is available.

BUTTER:

Increased demand is what keeps the butter price at the current level. Once that demand slows after the holidays, the price is at risk of declining further. Dairy Market News reports that the Northeast region is reporting larger-than-expected butter production with churn operating seven days a week. This will keep butter available for demand.

OUTSIDE MARKETS SUMMARY:

March corn closed down 3.75 cents per bushel at $4.4425, January soybeans closed up 4.00 cents at $10.9125 and January soybean meal closed down $.10 per ton at $301.20. March Chicago wheat closed down 5.00 cents at $5.2950. February live cattle closed up $1.58 at $228.53. January crude oil is up .67 per barrel at $58.92. The Dow Jones Industrial Average is up 497 points at 48,058, with the NASDAQ up 78 points at 23,654.