Friday Closing Dairy Market Update - Milk Futures Close Strong

GENERAL OVERVIEW:

Milk futures closed substantially higher. This was unexplained for Class III futures as spot cheese prices declined. However, the strength was warranted in Class IV futures because the spot butter price jumped. It is uncertain whether the income over feed price will trigger a DMC payment.

MILK:

It was a strong end to the week and month for milk futures. The strength in Class III futures was not expected due to the weakness of spot cheese prices. However, the strength in Class IV futures was not surprising due to the strength in butter and nonfat dry milk. The nonfat dry milk price increased substantially this week, lending quite a bit of support to milk futures.

The December Agricultural Prices report was released today. It is uncertain whether the price movement between the All-milk price and feed prices is sufficient to trigger a Dairy Margin Coverage payment. The average corn price was $4.10 per bushel, up $0.12 from November. This is $0.13 lower than December 2024. The Premium/Supreme hay price was $211.00 per ton, down $5.00 per ton from November and down $19.00 per ton from a year ago. The All-milk price was $19.00 per cwt, down $0.70 from November and down $4.30 from a year ago. The average soybean meal price will be released on Monday by the FSA. Other prices to take note of, but are not used in the calculation, are the alfalfa hay price, which was $161.00 per ton, up $2.00 per ton from a year ago, but down $3.00 per ton from November 2024. The average soybean price was $10.40 per bushel, down $0.10 per bushel from November but up $0.61 from December 2024.

AVERAGE CLASS III PRICES:

3 Month:	$15.55
6 Month:	$16.40
9 Month:	$16.88
12 Month:	$17.10

CHEESE:

For the week, blocks increased 0.75 cent with 20 loads traded. The weekly average price is $1.3940. Barrels increased 3.00 cents with two loads traded. The weekly average price is $1.4280. Dry whey increased 1.50 cents with five loads traded. The weekly average price is 74.50 cents.

BUTTER:

For the week, butter increased 0.50 cent with 39 loads traded. The weekly average price is $1.55470. There was much volatility during the week, but not much price change for the week. Grade A nonfat dry milk jumped 13.50 cents with four loads traded. The weekly average price is $1.3895. This may be the largest price increase ever seen over the period of one week. This strength added a lot of support to Class IV futures.

OUTSIDE MARKETS SUMMARY:

March corn closed down 2.50 cents per bushel at $4.2825, March soybeans closed down 8.00 cents at $10.6425, and March soybean meal closed down $2.40 per ton at $293.60. March Chicago wheat closed down 3.50 cents at $5.3800. April live cattle closed down $0.48 at $236.80. March crude oil is down $0.21 per barrel at $65.21. The Dow Jones Industrial Average is down 189 points at 48,892, with the NASDAQ down 223 points at 23,462.

Friday Midday Dairy Market Summary - Butter Price Jumps

OUTSIDE MARKETS SUMMARY:

CORN:	5 Lower
SOYBEANS:	10 Lower
SOYBEAN MEAL:	$3.60 Lower
LIVE CATTLE:	$0.10 Higher
DOW JONES:	437 Points Lower
NASDAQ:	264 Points Lower
CRUDE OIL:	$0.95 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 1.25 cents, closing at $1.3635 with seven loads traded. The barrel cheese price declined 2.00 cents, closing at $1.39 with no loads traded. The dry whey price increased 0.50 cent, closing at 75.00 cents with one load traded. Class III futures are 1 cent lower to 48 cents higher. The nearby January contract shows the only loss. That is due to there only being two days remaining to trade the contract, and it is basically priced. The big move for the day was in butter, with the price gaining 9.50 cents, closing at $1.58 with one load traded. There were 12 unfilled bids and two uncovered offers remaining at the close. Grade A nonfat dry milk gained 4.25 cents to close at $1.46 with one load traded. Class IV futures are 30-75 cents higher. Butter futures are 2.77-7.00 cents higher. Dry whey futures are 0.75-3.50 cents higher. Cheese futures are steady to 2.70 cents higher. The December Agricultural Prices report will be released today.

Friday Morning Dairy Market Update - Trading Volatility Settles Down

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Lower
Soybean Futures:	5 to 6 Lower
Soybean Meal Futures:	$0.50 to $1 Lower
Wheat Futures:	Mixed

MILK:

Milk futures will wait for direction from the spot market before developing a direction. The substantial volatility early in the week has subsided, with futures more in line with the underlying cash. Traders realized that the strong increase in spot butter and cheese prices was not a true fundamental picture of the market, but rather the result of an unexplained frenzy that I term the "heifer mentality". Dairy farmers can relate to this as they have all seen heifers or any cattle for that matter, become frightened due to one or a few animals beginning to run in a direction. This generates a panic through the herd, triggering a fright, flight response. After running around for a short period of time, the animals stop and look around, wondering why they ran in the first place. This is a correlation to what took place earlier in the week. The fundamentals did not support the strength. The December Agricultural Price report will be released today, providing most of the prices used to calculate income over feed.

CHEESE:

Hopefully, cheese prices will find support and hold. The unfilled bids remaining at the close of spot trading on Thursday would suggest this is a level at which buyers may be more aggressive.

BUTTER:

The butter price has yet to find support. Butter futures were higher at the close as they corrected from being oversold relative to cash. Strong butter production, but lower inventory indicates strong demand. The price may find support near the current level.

Thursday Closing Dairy Market Update - Is the Herd Growing Only by Holding Cull Cows?

GENERAL OVERVIEW:

Class III futures closed mixed as traders digested the volatility of the past week. Later contracts found some strength to close the day, but not from any strength in cash prices. The December Agricultural Prices report will be released on Friday.

MILK:

The price swings in Class III futures were limited today. Market volatility settled down with movement confined to stabilizing where they should be relative to the underlying cash. The December Agricultural Prices report will be released on Friday, providing most of the prices used in calculating the income over feed price. The FSA will release the average soybean meal price on Monday unless the government shutdown impacts the release of that price. There has been much talk regarding holding onto cattle that normally would be culled to get a calf out of them that is worth money. This seems to revolve around the idea that it is the only reason cow numbers continue to increase. I think this may not be the only reason. I think cows are being managed better, resulting in healthier cows that are producing more milk over a longer duration. After all, slaughter increased significantly in December, and yet the number increased. Cow numbers might be increasing due to better cows that are producing more milk, with milk per cow increasing by 41 pounds in December. A large number of cull cows in the nation's herd do not produce that much milk. It seems that the dairy herd is growing due to good cows that are remaining in the herd longer and are able to supplement milk income by producing calves. The industry may be looking at this from the wrong angle.

AVERAGE CLASS III PRICES:

3 Month:	$15.33
6 Month:	$16.03
9 Month:	$16.55
12 Month:	$16.80

CHEESE:

Some areas have indicated cheese demand is strong, with manufacturers meeting their contracts with limited supplies left over. This does not seem to be widespread, or spot cheese price would have retained the recent gains and would be trending higher. There is sufficient cheese available, which is why sellers continue to bring it to the spot market.

BUTTER:

Butter futures did not follow the spot butter price lower today. They rebounded into the close as prices adjusted from being overdone to the downside. Added to that were the unfilled bids at the close of spot trading, possibly indicating the price may have reached a level where buyers will be more aggressive.

OUTSIDE MARKETS SUMMARY:

March corn closed up .75 cent per bushel at $4.3075, March soybeans closed down 2.75 cents at $10.7225, and March soybean meal closed down $1.80 per ton at $296.00. March Chicago wheat closed up 5.50 cents at $5.4150. April live cattle closed down $1.45 at $237.28. March crude oil is up $2.21 per barrel at $65.42. The Dow Jones Industrial Average is up 56 points at 49,072, with the NASDAQ down 172 points at 23,685.

Fluid Milk and Cream - Western U.S. Report 5

California milk production is currently strong. Manufacturers convey open processing time remains tight as milk volumes are generally pushing against processing capacities. Stakeholders note spot milk loads being offered at prices below the Federal milk marketing order blend price. According to the California Department of Water Resources, as of January 27, 2026, the state has received 14.55 inches of precipitation for the current 2025-26 Water Year, up 2.61 inches from the historical mean. This is increasing reservoir levels and water resources for dairy farmers. 

Farm level milk output in Arizona and New Mexico is steady. Spot loads are available. New Mexico handlers note road closures and some downtime at dairy processing facilities due to winter weather related impacts, which has resulted in some distressed milk volumes. 

Handlers in the Pacific Northwest note cow comfort has improved, and milk output is back within anticipated volumes. Despite this, some manufacturers are continuing to secure spot milk loads. 

Farm level milk output in the mountain states of Idaho and Utah is strong. Stakeholders indicate a few processors had decreased intakes for a portion of January but are now receiving typical volumes again. Spot loads remain available. Farm level milk output in Colorado is steady. Class I and II demand is steady, while Class III and IV demand is mixed throughout the region. 

Cream loads are widely available, and demand is mixed. Cream multiples moved higher at the bottom ends of both ranges.  Condensed skim milk availability and demand are steady. 

Thursday Midday Dairy Market Summary - Nonfat Dry Milk Moves to Multi-Year High

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$2.00 Lower
LIVE CATTLE:	$1.12 Lower
DOW JONES:	143 Points Lower
NASDAQ:	336 Points Lower
CRUDE OIL:	$0.79 Higher

MIDDAY MARKET UPDATE:

The block cheese price slipped 0.75 cent, closing at $1.3750 with no loads traded. The barrel cheese price remained unchanged at $1.41 with no loads traded. The dry whey price slipped 0.50 cent, closing at 74.50 cents with three loads traded. Class III futures are mixed with contracts ranging from 14 cents lower to 6 cents higher. The butter price declined 4.00 cents, closing at $1.4850 with 15 loads traded. The heavy volume of offers has diminished, with two uncovered offers remaining at the close and 14 unfilled bids. Hopefully, this may indicate that the selling pressure will subside. Grade A nonfat dry milk increased 3.75 cents to close at $1.4175 with no loads traded. There were seven unfilled bids and one uncovered offer remaining. This is the highest price since Nov. 22, 2022. This is providing support to the Class IV market. Class IV futures have traded steady so far today. Butter futures are 0.80 cent lower to 0.52 cent higher. Dry whey futures are 0.27 cent lower to 1.00 cents higher. Cheese futures are 1.90 cents lower to 0.60 cent higher.

Thursday Morning Dairy Market Update - Milk Futures May Find Stability

OPENING CALLS:

Class III Milk Futures:	5 to 10 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures may be settling down after the wild price swings in the market. They have come back in line with the underlying cash and now may move accordingly. There remains concern that the spot cheese and butter prices will decrease further, but there is no way of knowing that with any certainty. What we do know is that milk production is strong and will remain that way for the foreseeable future. Some expansions continue to take place, and cow numbers are increasing. Trading volume may be light until further direction is seen from spot trading.

CHEESE:

Further pressure may be put on cheese prices as increased milk production keeps plants well supplied with milk for processing. Retail demand is good and export demand is strong, but it is not enough to support a higher price trend. Prices are expected to remain sideways and choppy.

BUTTER:

Even though the price has declined 7.50 cents over the past two days, it is retaining a good portion of the increase since Jan. 13. Hopefully, the market will find support near the current level. Inventory closed out 2025 down 7.0% from the previous year. This was a surprise to the market and a testament to good demand.

Wednesday Closing Dairy Market Update - Milk Futures Take a Beating

GENERAL OVERVIEW:

The recent strength in the markets was an aberration void of underlying fundamental support. There is the potential for prices to fall back to the level they had been a week ago. Both Class III and Class IV milk futures were hit hard.

MILK:

Milk futures took a beating again today with mostly double-digit losses. The recent price increases did not make sense fundamentally, and it is clearly seen that it was an aberration. It was a market that moved by fear and then fed on itself until that even ran its course. A large void was created under the market, and there is little interest in supporting the price. Some buying in the spot cheese and butter markets is taking place on the way down without anyone being aggressive. There are reports of herd expansions continuing to take place, along with strong milk production per cow. The potential for low milk prices continuing has little impact on the desire of farmers to milk cows. A large part of the farm income comes from the sale of calves. The slaughter of dairy cattle did increase significantly in December, totaling 248,400 head. This was 44,300 head more than in November and the highest monthly slaughter since February 2024, and the highest December slaughter since 2022. However, dairy cattle numbers increased by 9,000 head during the month.

AVERAGE CLASS III PRICES:

3 Month:	$15.40
6 Month:	$16.07
9 Month:	$16.56
12 Month:	$16.81

CHEESE:

Many cheese plants had more milk available to them over the past week as the winter storm reduced spot milk demand from Class I and II processors. The result is spot milk prices ranging from $1.00 to $5.00 below class. Retail cheese demand continues to remain strong, but food service demand remains slower.

BUTTER:

There is little demand for spot cream due to plants having sufficient volumes from regular supplies. Churns are running at full capacity, providing sufficient butter for both retail and food service demand. The large increase in the butter price was a buyer needing to purchase some for immediate needs, and likely other buyers thinking something was happening that they did not know about and wanted to purchase some just in case. That concern has since vanished.

OUTSIDE MARKETS SUMMARY:

March corn closed up 3.50 cents per bushel at $4.3000, March soybeans closed up 7.75 cents at $10.7500, and March soybean meal closed up $3.80 per ton at $297.80. March Chicago wheat closed up 12.75 cents at $5.3600. April live cattle closed up $1.33 at $238.73. March crude oil is up $0.82 per barrel at $63.21. The Dow Jones Industrial Average is up 12 points at 49,016, with the NASDAQ is up 40 points at 23,857.

Wednesday Midday Dairy Market Summary - Butter and Cheese Prices Fall

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	7 Higher
SOYBEAN MEAL:	$4.20 Higher
LIVE CATTLE:	$1.07 Higher
DOW JONES:	22 Points Higher
NASDAQ:	34 Points Higher
CRUDE OIL:	$0.41 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 2.25 cents, closing at $1.3825 with nine loads traded. The price initially declined to $1.3750, but rebounded on buying interest. The barrel cheese price declined 5.50 cents, closing at $1.41 with two loads traded. It has been rare to see trading activity in spot barrels. The activity today resulted in three loads of barrels being traded over the past two months. The dry whey price increased a penny to close at 75.00 cents with one load traded. Class III futures are 1-29 cents lower. The butter price declined 7.00 cents, closing at $1.5250 with three loads traded. There were four unfilled bids and 12 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk gained 2.00 cents to close at $1.38 with one load traded. Class IV futures are 15 cents lower to 4 cents higher. Butter futures are 7.00-9.07 cents lower. Dry whey futures are 1.00-1.27 cents higher. Cheese futures are 0.10-4.00 cents lower.

Wednesday Morning Dairy Market Update - Overnight Activity Shows Further Weakness

OPENING CALLS:

Class III Milk Futures:	8 to 15 Lower
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	2 to 3 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 4 Higher
Soybean Futures:	8 to 10 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	6 to 8 Higher

MILK:

Milk futures showed significant losses on Tuesday, with further losses in overnight trade. The buying frenzy may have dried up, triggering liquidation and hedging of the higher prices. Buyers in the spot market may step back from the market in anticipation that sellers will become more aggressive in their desire to take advantage of higher prices. This may pancake the market prices lower. The recent strong price rally did not have fundamental support and may be short-lived. Milk production is not slowing down. It will be up to demand to hold and improve prices, but that is a tall order at this time of year.

CHEESE:

The block cheese price declined on Tuesday, and it seems traders expect further weakness today based on overnight futures. The demand for cheese is good, but increased cheese output due to higher milk production will keep the market supplied.

BUTTER:

There is concern that there will be further weakness in the spot market due to the large volume of uncovered offers remaining at the close on spot trading on Tuesday. Overnight butter futures show further pressure as traders expect more aggressive selling in the spot market.

Tuesday Closing Dairy Market Update - Is The Dairy Market Rally Over?

GENERAL OVERVIEW:

Milk futures took back some of the recent strength due to the decline in the block cheese price. The current fundamentals did not support the recent rally, as there had not been a change in fundamentals.

MILK:

There is concern that the recent strength has run its course. The fundamentals did not support the magnitude of the price rally seen over the past few days. The market ran out of strength this morning and began to show weakness before spot trading. That was the first indication that the price strength lacked support. It was unusual that buying was so strong after a bearish milk production report. Milk production, being as strong as it is, may limit the upside price potential of the market for some time to come. The idea of a program with an incentive to cull cows has not had any concrete evidence of being implemented. Some support has been voiced for it, but whether it will come to fruition is another story. The next question is how much participation would there be? The current high prices for calves may limit participation. The amount of beef added to the market may not impact the beef prices to consumers very much or for very long. This was seen during the herd buyout in the mid-80's as it did not impact beef prices very much. The tight cattle market is here for a while.

AVERAGE CLASS III PRICES:

3 Month:	$15.44
6 Month:	$16.14
9 Month:	$16.64
12 Month:	$16.87

CHEESE:

It was not a surprise that the cheese price declined after the large increase on Monday. It was unfortunate, but long-term support remains elusive. There is little to slow cheese output due to strong milk production, and a significant increase in demand is not likely to develop anytime soon.

BUTTER:

Butter futures were down hard despite only a slight decline in the spot price. Futures were overdone to the upside, but the magnitude of the decline today was excessive. It was likely due to 30 uncovered offers remaining at the close of spot trading, possibly indicating more aggressive selling may take place on Wednesday. Higher butter prices could be possible due to December inventory being 7% below a year ago.

OUTSIDE MARKETS SUMMARY:

March corn closed down 1.75 cents per bushel at $4.2650, March soybeans closed up 5.50 cents at $10.6725, and March soybean meal closed down $.30 per ton at $294.00. March Chicago wheat closed up .75 cent at $5.2325. April live cattle closed down $0.60 at $237.40. March crude oil is up 1.81 per barrel at $62.44. The Dow Jones Industrial Average is down 409 points at 49,003, with the NASDAQ up 216 points at 23,817.

Tuesday Midday Dairy Market Summary - Milk Futures Fall Back

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	5 Higher
SOYBEAN MEAL:	$0.40 Lower
LIVE CATTLE:	$0.32 Lower
DOW JONES:	479 Points Lower
NASDAQ:	230 Points Higher
CRUDE OIL:	$1.33 Higher

MIDDAY MARKET UPDATE:

The price increase over the past two days was too good to be true. The block cheese price declined 4.00 cents, closing at $1.4050 with two loads traded. The barrel cheese price remained unchanged at $1.4650 with no loads traded. The dry whey price remained unchanged at 74.00 cents with no loads traded. Class III futures are 8-42 cents lower, with February posting the largest decline. The butter price slipped 0.50 cent, closing at $1.5950 with six loads traded. Butter could see further pressure as there were only three unfilled bids and 30 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk gained 3.00 cents to close at $1.36 with two loads traded. This is the highest nonfat dry milk price since Jan. 17, 2025. Class IV futures are 38 cents lower to 9 cents higher. Butter futures are 1.50-8.50 cents lower. Dry whey futures are 1.00 cents lower to 0.25 cent higher. Cheese futures are 0.40-4.00 cents lower.

Tuesday Morning Dairy Market Update - Follow-Through Buying Is Expected to Continue

OPENING CALLS:

Class III Milk Futures:	10 to 15 Higher
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The milk market has certainly come of life over the past few days. If this is a reaction to the President signing the bill allowing for 2% and whole milk back into schools, the rally may be temporary. That does not take place overnight, with some projections that it may take until this fall to be fully implemented. The strength has been surprising since the release of the bearish Milk Production report. It will be interesting to see whether this continues or if it was just a frenzy in the market that will settle down again. The hope is that these prices will be maintained and not erased once the exuberance wears off.

CHEESE:

The large increase in spot cheese prices on Monday is not likely to be repeated today. Buying interest was strong, but it may have been tied to buyers leapfrogging over each other in the attempt to purchase supplies before the price increases further. There was strong buying interest in barrels, but buyers were unable to find willing sellers.

BUTTER:

The butter price increase was tempered a little on Monday but continued to show strength. The price may increase further today as quite a few unfilled bids remained at the close of spot trading on Monday.

Monday Closing Dairy Market Update - Milk Futures Close Limit Up

GENERAL OVERVIEW:

It was a banner day for milk futures with the largest gains seen in quite some time. A few contracts. A few contracts closed limit up as futures moved relative to the underlying cash. There is uncertainty over whether the strength will be maintained.

MILK:

It has been quite some time since we have seen multiple futures contracts moving limit up in one day. The February Class III contract increased $1.01 over the past 2 days. The March Class III contract has increased by $1.14, with the April contract up $1.16. This moves the nearby futures prices to the highest level since November. There has not been release of any program or any substantial surge in demand supporting the move. This has been a surprise due to the bearishness of the December Milk Production report. December showed the second-largest increase for the year at 4.4%. The addition of 9,000 cows in December resulted in 212,000 more cows than a year ago, totaling 9.567 million head. Milk production in the fourth quarter was up 4.2% compared to the previous year. There were five states that showed milk production declines in December. Washington was down 6.0%; New Mexico was down 4.9%; Pennsylvania was down 2.4%; Illinois was down 1.4%; and Virginia was down 0.9%. Kansas increased 26.2% with South Dakota up 11.4%. California had a large increase with a gain of 9.6%.

AVERAGE CLASS III PRICES:

3 Month:	$15.70
6 Month:	$16.40
9 Month:	$16.88
12 Month:	$17.11

CHEESE:

It seemed as if there was some knowledge of the strong increase in cheese prices due to milk futures being substantially higher prior to spot trading. The December Cold Storage report was considered neutral, indicating sufficient supplies of cheese are available for demand. It is good to see the strength of the market over the past two days, but there is concern about whether the strength will hold without further solid fundamental support.

BUTTER:

Butter futures pushed substantially higher, trying to catch up with the substantial move in the spot market on Friday. It seemed like traders were holding numerous short positions in butter futures and got caught on the wrong side.

OUTSIDE MARKETS SUMMARY:

May corn was down 2.00 cents at $4.3925. May soybeans declined5.50 cents to close at $10.74. May wheat declined 5.75 cents to close at $5.4575. May live cattle increased $1.07, closing at $238.00. March crude oil declined $0.44 to close at $60.63 per barrel. The Dow increased 314314 points to close at 49,412 with the NASDAQ up 100 points at 23,601.

Monday Midday Dairy Market Update - Futures Show Incredible Gains

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	6 Lower
SOYBEAN MEAL:	$5.10 Lower
LIVE CATTLE:	$1.10 Higher
DOW JONES:	287 Points Higher
NASDAQ:	150 Points Higher
CRUDE OIL:	$0.48 Lower

MIDDAY MARKET UPDATE:

The block cheese price jumped 9.00 cents, closing at $1.4450 with two loads traded. The barrel cheese price jumped 10.50 cents, closing at $1.4650 with no loads traded. The dry why price increased 0.50 cent, closing at 74.00 cents with no loads traded. Class III futures are 4-75 cents higher. The butter price jumped 2.50 cents with 14 loads traded. There were 22 unfilled bids and 21 uncovered remaining at the close. Grade A nonfat dry milk increased 0.50 cents to close at $1.33 with no loads traded. Class IV futures are $0.80-$1.10 higher. Butter futures are 3.50-13.97 cents higher. Dry whey futures are 0.45 cent lower to 0.75 cent higher. Cheese futures are 0.70-7.50 cents higher.

Monday Morning Dairy Market Update - Follow-Through Strength Is Expected

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures increased nicely on Friday, propelled mostly by the strength in butter. This changes the sentiment of traders as gains of this magnitude in the daily complex are something to take note of. It is unusual to see this type of strength in the early part of the year, after holiday demand is complete. The overnight trading activity shows continued strength despite the bearishness of the December Milk Production report. This may limit the upside price potential, but for now, the strength has improved the outlook for milk prices. Demand needs to improve to maintain the strength. It can be clearly seen that milk production will not decrease much anytime soon.

CHEESE:

Cheese prices are slowly increasing, but there may be a limit as to how high they will move. The strong milk output is not going away anytime soon. The increased milk will need to be processed, keeping cheese supplies sufficient for demand. The Cold Storage report showed more cheese in inventory than a year ago.

BUTTER:

The price increase on Friday was the largest one-day increase since Sept. 27, 2023. Hopefully, this will be the beginning of better prices to come. The butter price jumped 22.0 cents last week. Butter futures have not traded overnight but are expected to show follow-through strength today.

Friday Closing Dairy Market Update - Butter Trades Limit Higher

GENERAL OVERVIEW:

Butter traded 11.5 cents higher in the cash trade today, which led the way for futures to scream higher, closing an already strong week up 7.5 cents, a limit move higher.

MILK:

USDA released the December Milk Production Report this afternoon, stating what the market already suspected, that production is higher. 18.8 billion pounds higher to be exact. That is up 4.6% from December 2024. They also revised the November production to 18.1 billion pounds, up 3 million pounds from last month's preliminary production estimate. Production per cow averaged 2,060 pounds in December, which came in 42 pounds higher than December 2024. The number of milk cows also increased 9,000 head since November and 222,000 head higher than December 2024. For the last quarter data for 2025, the October-December data showed milk production in the United States at 57.8 billion pounds, up 4.2% from the previous year. The average number of milk cows in the United States for October-December totaled 9.56 million head, 23,000 more than the July-September quarter and 202,000 more than the last quarter of 2024. Class III Milk prices were higher on the day, unable to deny the strength seen in every other sector of the dairy market with today's butter rally.

AVERAGE CLASS III PRICES:

3 Month:	$15.19
6 Month:	$15.78
9 Month:	$16.33
12 Month:	$16.63

CHEESE:

For the week, blocks increased by 6.50 cents with 17 loads traded. The weekly average price is $1.35. Barrels increased 0.25 cents with no loads traded. The weekly average price is $1.3581. Dry whey was unchanged with no loads traded. The weekly average price is 73.50 cents. The December Cold Storage report had natural cheese stocks in refrigerated warehouses up 1% from the previous month and 1% from a year ago.

BUTTER:

For the week, butter increased 22.2 cents with 27 loads traded. The weekly average price is $1.47625. Grade A nonfat dry milk increased 7 cents with two loads traded. The weekly average price is $1.2819.

Butter finished a strong week out with a limit higher move of 7.5 cents going into the weekend. We will have expanded limits come Monday. The USDA released the December Cold Storage report this afternoon. Butter stocks were down 5% from last month and down 7% from December of 2024.

OUTSIDE MARKETS SUMMARY:

March corn closed up 6.50 cents per bushel at $4.3050, March soybeans closed up 3.75 cents at $10.6775 and March soybean meal closed up $3.70 per ton at $299.90. March Chicago wheat closed up 14.00 cents at $5.2950. April live cattle closed up $2.10 at $236.93. March crude oil is up 1.95 per barrel at $61.31. The Dow Jones Industrial Average is down 285 points at 49,098 and the NASDAQ is up 65 points at 23,501.

December Milk Production up 4.6 percent

December Milk Production up 4.6 percent        

Milk production in the 24 major States during December totaled 18.8 billion pounds, up 4.6 percent from December 2024. November revised production, at 18.1 billion pounds, was up 4.7 percent from November 2024. The November revision represented an increase of 3 million pounds or less than 0.1 percent from last month's preliminary production estimate.  Production per cow in the 24 major States averaged 2,060 pounds for December, 42 pounds above December 2024.   The number of milk cows on farms in the 24 major States was 9.14 million head, 222,000 head more than December 2024, and 9,000 head more than November 2025.   

October-December Milk Production up 4.2 percent  

Milk production in the United States during the October - December quarter totaled 57.8 billion pounds, up 4.2 percent from the October - December quarter last year.  The average number of milk cows in the United States during the quarter was 9.56 million head, 23,000 head more than the July - September quarter, and 202,000 head more than the same period last year. 

Friday Midday Dairy Market Summary - Butter Explodes Higher

OUTSIDE MARKETS SUMMARY:

CORN:	7 Higher
SOYBEANS:	6 Higher
SOYBEAN MEAL:	$0.35 Higher
LIVE CATTLE:	$2.50 Higher
DOW JONES:	307 Points Lower
NASDAQ:	79 Points Higher
CRUDE OIL:	$1.60 Higher

MIDDAY MARKET UPDATE:

The block cheese price was up half a cent today, closing at $1.3550 with four loads traded. The barrel cheese price climbed 0.25 cents at $1.36 with no loads traded. The dry whey price remained steady at 73.50 cents with no loads traded. Class III futures are 14 to 23 cents higher. The butter price launched 11.5 cents, closing at $1.5750 with seven loads traded. Grade A nonfat dry milk rallied another 4.25 cents, closing at $1.3250 with no loads traded. Class IV futures are trading 6 cents lower to 72 cents higher. Butter futures are 5.2 cents to 7.5 cents higher. Dry whey futures are 0.5 cents to 1 cent higher. Cheese futures are 1.5 cents to 1.9 cents higher.

Friday Morning Dairy Market Update - Buyers May Step Back From Cash Market

OPENING CALLS:

Class III Milk Futures:	3 to 5 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Miuxed
Soybean Futures:	3 to 4 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	3 to 4 Higher

MILK:

Traders viewed Thursday's weakness in block cheese negatively. This triggered aggressive selling in the nearby Class III futures contracts. The fear is lower prices will unfold as buyers may step back. The January Milk Production report will be released Friday. I estimate milk production to be 3.9% higher than a year ago. I estimate cow numbers to be nearly the same as in November. The Make America More Ground Beef (MAMGB), is an initiative designed to help dairy farmers monetize surplus dairy-origin cattle, increase domestic beef supply, and lower grocery prices for beef. Western United Dairies is promoting this idea. It is not a mandate but a voluntary program open to all U.S. dairy operations, potentially launching as early as this spring. Western United Dairies shares that the MAMGB program aims to divert 800,000 to 1 million additional dairy-origin cattle to slaughter in spring 2026, injecting an estimated 900 million to 1.1 billion pounds of lean trim into the ground beef market. They claim it will lower retail ground beef prices by 18% to 25%, and also increase beef demand due to the lower prices. The greater number of dairy cows moving to slaughter may support dairy prices and possibly tighten the milk supply.

CHEESE:

The weakness in the block cheese price may move buyers to the sidelines for a time as they wait to see how aggressive the sellers might be. There is a sufficient supply of cheese available for demand. This may leave the market with limited upside potential.

BUTTER:

The butter price remained steady for the day, but the increase in the nonfat dry milk price supported Class IV futures. The November Cold Storage report will be released Friday and may show butter supplies have been building.

Thursday Closing Dairy Market Update - Butter Rallies Again

GENERAL OVERVIEW:

Class III milk pulled back prices Thursday, nervous to play along with the other dairy products rallying with the Milk Production report to be released Friday. Butter futures climbed higher despite little activity in the cash trade.

MILK:

Class III milk had a day lower, trading 5 to 35 cents lower on most contracts other than a few later day trading in deferred contracts that had small gains. With the Milk Production report expected to show strong milk production Friday, it is difficult for Class III to have much to get excited over right now. Milk supply is plentiful and demand is steady. More government focus on whole milk in social media ads and the new food pyramid will help, but market shifts take time.

AVERAGE CLASS III PRICES:

3 Month:	$14.98
6 Month:	$15.51
9 Month:	$16.10
12 Month:	$16.45

CHEESE:

Block cheese traded a penny lower earlier Thursday with no loads traded in blocks or barrels. Futures were a little harder on prices Thursday afternoon, trading 3 to 4.2 cents lower. Retail cheese demand is there; however, cheese products have a lot of availability. We will know more Friday with the Cold Storage report as the government releases inventory numbers.

BUTTER:

Butter futures climbed 1.4 cents to 3.9 cents higher Thursday afternoon. The cash market was unchanged with no loads traded. There seems to be a surge of demand this week, and more information will be available with the Cold Storage report Friday. If inventory levels are lower than expected, it could account for the strong prices this week. Last month we saw a 1% drop from the previous year and an 8% drop from the previous month.

OUTSIDE MARKETS SUMMARY:

March corn closed up 2.25 cents per bushel at $4.2400, March soybeans closed down .50 cent at $10.6400 and March soybean meal closed up $4.80 per ton at $296.20. March Chicago wheat closed up 7.75 cents at $5.1550. April live cattle closed down $0.13 at $234.83. March crude oil is down 1.26 per barrel at $59.36. The Dow Jones Industrial Average is up 306 points at 49,384 and NASDAQ is up 211 points at 23,436.

Fluid Milk and Cream - Western U.S. Report 4

California handlers report milk production is continuing to strengthen. January 2026 milk output is noted as up from December 2025 and year over year. Manufacturers convey open processing time is extremely tight, especially in the Central Valley. Spot milk loads continue to be available. Sellers note spot milk load sales down to $6 below the federal milk market order blend price. Stakeholders indicate there is some displaced milk volumes due to a facility closure at the start of the year, which has contributed to some distressed milk being sold to calf ranches. 

Farm level milk output in Arizona is stronger. Some manufacturers are bringing in spot milk on top of contractual intakes. 

New Mexico milk production various from steady to stronger. 

Farm level milk output is mixed in the Pacific Northwest. Some handlers convey untypical seasonal weather conditions negatively impacted cow comfort and milk output. Spot milk load availability and demand is mixed. 

Milk production in the mountain states of Idaho and Utah is strong. Handlers convey warmer than typical temperatures and lower than typical snowfall are positively impacting cow comfort and milk output. For Colorado, milk production is steady. Demand for all Classes is steady throughout the region. 

Although cream volumes are strong, stakeholders indicate there are fewer spot cream offers this week in some parts of the region. Cream multiples increased at the bottom end of the all-classes range for week 4. Condensed skim milk production, availability, and demand all remain mixed.

Thursday Midday Dairy Market Summary - Uneventful Cash Trade

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	Mixed
SOYBEAN MEAL:	$0.45 Higher
LIVE CATTLE:	$0.60 Lower
DOW JONES:	493 Points Higher
NASDAQ:	262 Points Higher
CRUDE OIL:	$1.55 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 1 cent today, closing at $1.3500 with no loads traded. There was only one bid and one offer by the close. The barrel cheese price remained unchanged at $1.3575 with no loads traded. The dry whey price remained steady at 73.50 cents with no loads traded. Class III futures are 1 to 34 cents lower. The butter price was unchanged, closing at $1.46 with no loads traded. Grade A non-fat dry milk remained rallied 2.25 cents, closing at $1.2825 with no loads traded. Class IV futures are trading 33 cents lower. Butter futures are 0.5 cents to 1.05 cents higher. Dry whey futures are 0.5 cents lower. Cheese futures are 1.7 cent to 2.4 cents lower.

Thursday Morning Dairy Market Update - Buying Interest May Continue

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	2 to 6 Higher
Butter Futures:	2 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Class III milk futures are increasing in response to the gains in the block cheese and butter prices. The fundamentals have not changed much, but there may be some interest due to the impact of whole and 2% milk being made available for school lunches. That may not result in a significant increase in consumption, but it does provide an avenue for increased demand. USDA will release the January Milk Production and Cold Storage reports Friday.

CHEESE:

The block cheese price has been steady or higher for the past five consecutive days. The block price has finally moved above barrels, where it has not been for some time. Cheese production remains strong with sufficient milk supply. This may limit the upside price potential.

BUTTER:

The butter price continues to increase as buyers may have reached a level at which they may be more aggressive and outbid each other to purchase supplies before the price moves higher. Once the buying interest runs its course, there could be a void under the market. It is not certain that a bottom has been found.

Wednesday Closing Dairy Market Update - Butter Strength Continues

GENERAL OVERVIEW:

Butter has been on a roll this week, rallying 5 cents two days in a row in the cash market and futures up another 7 cents today. Its strength is leaking over to the other dairy futures markets, giving some short-term hope.

MILK:

Class III Milk showed some small gains in most of the futures months today, holding steady at current levels. Class IV Milk futures were 48 cents to 61 cents higher, and Non-Fat Milk rallied 2 cents to 5 cents higher today. Dry Whey futures experienced the only losses on the day, trading slightly lower. The market is expecting high production levels on Friday's report, so anything different reported could cause a shock to the market. Winds and cold weather are starting to hit the northern plains.

AVERAGE CLASS III PRICES:

3 Month:	$15.17
6 Month:	$15.66
9 Month:	$16.22
12 Month:	$16.55

CHEESE:

Block Cheese traded higher in the cash market, however Barrels remained unchanged. Retail demand is steady, giving support to the spot market. Cheese futures traded 0.2 to 0.8 cents higher on the day. Exports are strong, but the supply of available cheese is plentiful domestically.

BUTTER:

Butter futures are the star of the day with gains of 6.5 to 7.5 cents higher, leading the way for the rest of the dairy complex. The cash market traded 5 cents higher for the second day in a row, making spot prices 10 cents higher on the short trading week. The government's new health guidelines shed new light on healthy fats, and we'll see in the coming months how significant a shift that will make in consumer demand.

OUTSIDE MARKETS SUMMARY:

March corn closed down 2.00 cents per bushel at $4.2175, March soybeans closed up 11.50 cents at $10.6450 and March soybean meal closed down $.20 per ton at $291.40. March Chicago wheat closed down 2.50 cents at $5.0775. April live cattle closed up $0.38 at $234.95. March crude oil is up .29 per barrel at $60.65. The Dow Jones Industrial Average is up 588 points at 49,077 and the NASDAQ is up 270 points at 23,244.

Wednesday Midday Dairy Market Summary - Butter Rally Continues

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	12 Higher
SOYBEAN MEAL:	$0.05 Lower
LIVE CATTLE:	$0.85 Higher
DOW JONES:	206 Points Higher
NASDAQ:	5 Points Lower
CRUDE OIL:	$0.02 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 2.5 cents, closing at $1.3600 with six loads traded. There were five bids left unfulfilled at the close. The barrel cheese price remained unchanged at $1.3575 with no loads traded. The dry whey price remained steady at 73.50 cents with no loads traded. Class III futures are 4 to 11 cents higher. The butter price increased 5.00 cents, closing at $1.46 with 12 loads traded. This makes 10 cents higher so far with only two trading days this week. Grade A nonfat dry milk remained unchanged closing at $1.26 with no loads traded. Class IV futures are trading 3.3 cents lower on the March contract. Butter futures are 4 cents to 6.6 cents higher. Dry whey futures are 0.2 cents to 0.45 cent lower. Cheese futures are 0.60 cent to 0.80 cents higher.

Wednesday Morning Dairy Market Update - Butter Strength Continues Overnight

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	0 to 3 Lower
Butter Futures:	2 to 4 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 3 Higher
Soybean Futures:	8 to 10 Higher
Soybean Meal Futures:	$0.10 to $0.35 Higher
Wheat Futures:	3 to 4 Higher

MILK:

Class III milk futures look positive in overnight trade, setting us up for a higher day. Severe cold windchills are headed to the northern half of the United States later this week with a major ice storm predicted over the Southeast. An impact on production and available supply is expected but will be short-term as there is plenty of milk available at this time.

CHEESE:

Block cheese had an unexpected day higher, gaining 4.5 cents in Tuesday's cash trade. Barrels remained unchanged, showing supply still readily available but the demand is in the retail market. Traders are still pessimistic about how much of a rebound cheese can make with many expecting to revisit previous lows.

BUTTER:

The cash price of butter also shocked the market Tuesday with a 5-cent rally to kick off the short trading week. Most expected mixed trading as supply is plentiful. Export numbers released last week show demand for higher percentage of butterfat, so while that has little effect on our spot prices, it is a positive story to trade around for futures.