GENERAL OVERVIEW:
Class III futures closed mostly higher despite another decline in the block cheese price. It is uncertain what is taking place, as another new low for the year is not having an extremely bearish impact on the market. USDA reduced its estimate of milk production and milk prices for 2026.
MILK:
USDA left milk production unchanged from the previous month in the World Agricultural Supply and Demand Estimates report. Milk production this year is estimated at 231.4 billion pounds, unchanged from the previous report. This is 5.5 billion pounds higher than in 2024. The estimate for 2026 is 234.1 billion pounds, down 200 million pounds from the November estimate. The Class III milk price was reduced $0.05 per cwt to average $18.10. The average Class III price for 2026 decreased $0.60 to $17.05. The Class IV estimate was increased $0.05 per cwt to average $17.40. The average price decreased $0.10 per cwt in 2026 to $14.40. The All-milk price decreased $0.05 this year to $21.00 and decreased by $0.50 to average $18.75 for 2026.
AVERAGE CLASS III PRICES:
| 3 Month: | $15.57 |
| 6 Month: | $15.87 |
| 9 Month: | $16.27 |
| 12 Month: | $16.58 |
CHEESE:
The block cheese price slipped to another new low for the year and is now only 3.75 cents above the low in June 2023. A break below that level will move the price back to the levels of 2021. USDA decreased the estimated cheese price this year by a penny to $1.7950 per pound. The 2026 price decreased 6.50 cents to average $1.6750 per cwt. The dry whey price was left unchanged this year at 59.50 cents per pound, with the average price this year at 63.50.
BUTTER:
The average butter price increased this year to $2.2250 per pound but reduced next year to $1.6750 per pound. This would be a huge decrease and have a substantial impact on milk prices. The nonfat dry milk price was left unchanged for this year at $1.2350 and left unchanged at $1.17 for 2026.
OUTSIDE MARKETS SUMMARY:
March corn closed up 4.25 cents per bushel at $4.4800, January soybeans closed down 6.50 cents at $10.8725 and January soybean meal closed down $5.00 per ton at $301.30. March Chicago wheat closed down .25 cent at $5.3450. February live cattle closed up $0.28 at $226.95. January crude oil is down .51 per barrel at $58.37. The Dow Jones Industrial Average is down 179 points at 47,560, with the NASDAQ up 31 points at 23,576.
