Friday Closing Dairy Market Update - Decline in All-milk Price Indicates DMC Payment Will Be Made

GENERAL OVERVIEW:

Milk futures closed mostly higher, with only the March contracts posting losses. Class III futures posted slight gains for the week, while Class IV contracts posted significant gains.

MILK:

Despite some of the volatility in the spot market, milk futures had a good week. Class III contracts were steady to slightly higher, while Class IV contracts were strong. The April Class IV contract moved to $20.00, where it has not been since May 27, 2025. A move above that level would put in at a new contract high. The strength over the past few weeks has been remarkable. Seasonally, prices do not see this strength during this time of year. However, considering the price moved substantially lower during the fourth quarter of 2025, this may be the market correcting an exceptionally oversold market. The January Agricultural Prices report was released, showing average prices for the month. The average corn price was $4.10 per bushel, the same price as December, but $0.19 below a year ago. The premium/supreme hay price was $226.00 per ton compared to $211.00 per ton in December and $242.00 per ton a year ago. The All-milk price was $17.50, down $1.50 per cwt from December and down $6.60 from January 2025. The average soybean meal price will not be released until Monday, providing the final price to calculate income over feed for the Dairy Margin Coverage program. Other prices of interest are the soybean price for January, which was $10.30 per bushel compared to $10.40 in December and $10.00 a year ago. The alfalfa hay price was $160 per ton, down $1.00 per ton from December and down $1.00 per ton from a year ago.

AVERAGE CLASS III PRICES:

3 Month:	$16.18
6 Month:	$17.09
9 Month:	$17.48
12 Month:	$17.53

CHEESE:

For the week, blocks increased 2.25 cents with 18 loads traded. The weekly average price is $1.5460. Barrels increased 7.00 cents with no loads traded. The weekly average price is $1.5320. Dry whey decreased 4.75 cents with three loads traded. The weekly average price is 64.00 cents.

BUTTER:

For the week, butter decreased 3.00 cents with 68 loads traded. The weekly average price is $1.8320. Grade A nonfat dry milk increased 2.50 cents with eight loads traded. The weekly average price is $1.6775.

OUTSIDE MARKETS SUMMARY:

May corn closed up 5.00 cents per bushel at $4.4850, May soybeans closed up 7.25 cents at $11.7075 and May soybean meal closed down $.40 per ton at $320.50. May Chicago wheat closed up 17.00 cents at $5.9150. April live cattle closed down $4.68 at $232.23. April crude oil is up $2.08 per barrel at $67.29. The Dow Jones Industrial Average is down 521 points at 48,878, with the NASDAQ down 210 points at 22,668.

Friday Midday Dairy Market Summary - Milk Futures Are Higher Despite Lower Spot Prices

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	12 Higher
SOYBEAN MEAL:	$0.80 Lower
LIVE CATTLE:	$4.72 Lower
DOW JONES:	639 Points Lower
NASDAQ:	285 Points Lower
CRUDE OIL:	$1.68 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 0.75 cent to close at $1,.5225 with no loads traded. The barrel cheese price remained unchanged at $1.56 with no loads traded. The dry whey price slipped 0.50 cent to close at 63.25 cents with one load traded. Class III futures are 10 cents lower to 17 cents higher. The March contract shows the only loss across the board. The butter price declined 2.00 cents, closing at $1.84 with 12 loads traded. Grade A nonfat dry milk remained steady at $1.71 with one load traded. Class IV futures are 7 cents lower to 15 cents higher. Butter futures are 2.10 cents lower to 1.02 cent higher. Dry whey futures are 1.00 cents lower to 0.97 cent higher. Cheese futures are 0.5 cents lower to 1.60 cents higher. USDA will release the January Agricultural Prices report this afternoon, with prices used in calculating income over feed for the Dairy Margin Coverage program.

Friday Morning Dairy Market Update - Butter May Show Further Strength

OPENING CALLS:

Class III Milk Futures:	4 to 10 Higher
Class IV Milk Futures:	4 to 8 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	3 to 4 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	9 to 11 Higher

MILK:

The decline in block cheese prices was significant and could result in lower prices Friday as buyers hold back to see how aggressive sellers will be. Support seems to have come from USDA's announcement of the purchase of dairy products for food banks, but higher milk production and increased output of cheese and butter may limit the impact. The USDA will release the January Agricultural Prices report Friday afternoon. It will contain most of the prices used in calculating income over feed for the Dairy Margin Coverage program. The soybean meal price is not part of this calculation and is released by the FSA on the following day. A significant payment is expected if the $9.50 level was chosen.

CHEESE:

The decline of block cheese on Thursday was not unexpected. However, the magnitude of the decline was unexpected. This weakness may cause buyers to hold back Friday as they wait to see how aggressive sellers will be. Sufficient cheese supplies and increased production may limit the upside price potential if the price rebounds.

BUTTER:

The butter price has the potential to post further gains. Lower inventory than a year ago and increased retail demand may absorb strong butter output. Exports in November were 227.0 percent above those in November 2024, with year-to-date exports up 157.0 percent above the same period in 2024. Strong butter production due to abundant cream supplies is being absorbed.

Thursday Closing Dairy Market Update - Class III Milk Prices Fall

GENERAL OVERVIEW:

Buying interest ran its course in block cheese, with the price falling back today. Milk production remains strong, and the potential for higher milk prices may increase that strength as producers will try to capitalize on higher prices. The USDA will release the Agricultural Prices report tomorrow.

MILK:

Milk futures have increased substantially from the lows in January, improving the outlook for milk prices significantly. Class III futures came under pressure today due to weakness in the block cheese price. Even with this weakness, it is unlikely the market will drop back very much unless the recent strength was the result of emotion and what-if scenarios rather than fundamentals. Milk production is strong and continues to run ahead of last year. The percentage of gain this year may not be as dramatic as last year, as this year is being compared to the substantially higher milk production of 2024. Milk production in 2025 was 231.4 billion pounds, up 5.6 billion pounds from 2024. The USDA currently estimates milk production in 2026 to average 234.5 billion pounds, up 3.0 billion pounds from 2025. An increase of that magnitude will add substantially to the available milk supply. The USDA will release the January Agricultural Prices report on Friday, providing most of the prices used in the calculation of income over feed for the Dairy Margin Coverage program.

AVERAGE CLASS III PRICES:

3 Month:	$16.31
6 Month:	$17.16
9 Month:	$17.52
12 Month:	$17.55

CHEESE:

More milk is moving to cheese manufacturing as milk output increases seasonally. Even with increasing milk receipts, manufacturers are looking for spot milk due to increased manufacturing capacity in some areas. Milk components continue at record values, improving cheese yields.

BUTTER:

The butter price continues to find support and is in a better position with lower inventory than last year. The lower supplies may provide greater support as demand remains strong despite increased butter production.

OUTSIDE MARKETS SUMMARY:

May corn closed up 1.50 cents per bushel at $4.4350, May soybeans closed down 1.50 cents at $11.6350, and May soybean meal closed down $.90 per ton at $320.90. May Chicago wheat closed up 4.75 cents at $5.7450. April live cattle closed down $3.38 at $236.90. April crude oil is down $0.21 per barrel at $65.21. The Dow Jones Industrial Average is up 17 points at 49,499, with NASDAQ is down 274 points at 22,878.

Fluid Milk and Cream - Western U.S. Report 9

Milk production in California is strengthening. Spot loads are available and open processing time is tight. Handlers indicate milder winter weather in the state this season and cow comfort is good. Manufacturers remain busy working through milk intakes. 

Milk production in Arizona is strengthening as well. In New Mexico, farm level milk output is reported as steady. 

In the Pacific Northwest milk production is stronger. Handlers indicate milder winter weather conditions are contributing to improved cow comfort, but the lighter snowpack may bring some water resource stress in the summer months. Some manufacturers convey milk intakes are higher than anticipated volumes. 

Farm level milk output in the mountain states of Idaho, Utah, and Colorado, varies from steady to stronger. Stakeholders indicate spot milk loads are generally more available in the northern parts of the mountain state area. Colorado handlers convey snowpack has been lighter this winter, improving cow comfort in some cases. Class I demand is steady, Class II and III demands are stronger, and Class IV demand varies from steady to stronger throughout the region. 

Milk production is providing plenty of cream volume. Cream multiples are higher at the top end of both ranges this week. Demand varies from steady to stronger. Condensed skim milk availability is stable and demand is somewhat stronger.

Thursday Midday Dairy Market Summary - Block Cheese Price Falls Back

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	6 Lower
SOYBEAN MEAL:	$2.30 Lower
LIVE CATTLE:	$3.52 Lower
DOW JONES:	159 Points Lower
NASDAQ:	439 Points Lower
CRUDE OIL:	$0.08 Lower

MIDDAY MARKET UPDATE:

The block cheese price fell 7.25 cents, closing at $1.53 as sellers stepped up to the plate aggressively in an attempt to take advantage of the higher price. There were no unfilled bids and five uncovered offers remaining at the close of spot trading. The barrel cheese price remained unchanged at $1.56 with no loads traded. The dry whey price remained unchanged at 63.75 with no loads traded. Class IV futures are 8-63 cents lower, with April posting the greatest loss. The butter price increased 2.50 cents, closing at $1.86 with 10 loads traded. There were 15 unfilled bids and four uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk increased 3.75 cents to close at $1.71 with three loads traded. This is the highest price since July 13, 2022. Class IV futures are 15 cents lower to 10 cents higher. Butter futures are steady to 3.00 cents lower. Dry whey futures are steady to 2.00 cents higher. Cheese futures are 0.80-7.50 cents lower.

Thursday Morning Dairy Market Update - Further Strength in Spot Prices Anticipated

OPENING CALLS:

Class III Milk Futures:	4 to 8 Lower
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	2 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures have been strong and supported by the underlying cash prices. Buyers in the cash market remain aggressive as they look to increase ownership of dairy products. This has not been due to a lack of milk, as production has been strong and continues to run significantly higher than a year ago. With the potential for higher milk prices as seen on the futures market, farmers will continue to add cows and push milk production to take advantage of the better prices. The idea that culling would increase due to low milk prices, and after some marginal cows have calves, may dissipate. The desire will be to increase production and to keep breeding and selling beef on dairy calves. The increasing of government purchases of dairy products for food banks has provided strength to the market despite the uncertainty of how and when it will take place.

CHEESE:

The strength in barrel cheese on Wednesday was a surprise. The greater surprise was that even the seven-cent increase did not result in any trades taking place. Cheese production is strong, with sufficient supply available. Buyers are aggressive in their desire to increase ownership to protect against the possibility of further strength.

BUTTER:

The price increase pushed the April through August butter futures contracts limit up. This will result in expanded price limits Thursday. Butter futures have added a substantial premium to futures with the September and October contracts at nearly $2.30 per pound. The last time the cash price was at that level was in August 2025. 

Wednesday Closing Dairy Market Update - Spot Milk Prices Strengthen as Demand Improves

GENERAL OVERVIEW:

Milk futures closed significantly higher in response to higher spot prices. Milk production is seasonally strong across much of the country.

MILK:

Milk production is seasonally strong. Some plants in the Eastern region of the country indicate that they are having difficulty finding spot loads of milk, as some of the new facilities that came online during the past year are pulling more of the available milk. Fluid milk demand is strong, with bottlers running on full schedules. Class III milk futures pushed higher in response to the increase in the underlying spot prices. Cheese prices increased with limited trading activity. Butter increased with no loads traded. The spot market has good support for the time being and is improving the outlook for milk prices. May through December Class III contracts are now above $18.00. Class IV March through November contracts are above 19.00, with the March and April contracts knocking on the door of $20.00.

AVERAGE CLASS III PRICES:

3 Month:	$16.52
6 Month:	$17.35
9 Month:	$17.69
12 Month:	$17.68

CHEESE:

Spot milk prices are increasing, with prices ranging from $1.00 under to $2.00 over class. Some of the newer facilities are purchasing spot milk to increase their production, which is tightening the availability of spot milk. Cheese production is strong and is expected to increase as the spring flush begins next month. Retail cheese demand has improved while demand from food service has remained steady.

BUTTER:

The price increased with no loads traded. Sellers have butter available but are holding for higher prices as long as buyers remain aggressive. Price weakness may be short-lived as inventory in January was 17% below a year ago. Low prices have cured low prices, but the upside potential is uncertain.

OUTSIDE MARKETS SUMMARY:

May corn closed up 3.50 cents per bushel at $4.4200, May soybeans closed up 9.75 cents at $11.6500, and May soybean meal closed up $7.40 per ton at $321.80. May Chicago wheat closed down 3.50 cents at $5.6975. April live cattle closed up $1.18 at $240.28. April crude oil is down $0.07 per barrel at $65.56. The Dow Jones Industrial Average is up 308 points at 49,482, with the NASDAQ up 288 points at 23,152.

Wednesday Midday Dairy Market Summary - Spot Prices Push Higher

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	6 Higher
SOYBEAN MEAL:	$7.20 Higher
LIVE CATTLE:	$0.80 Higher
DOW JONES:	284 Points Higher
NASDAQ:	265 Points Higher
CRUDE OIL:	$0.10 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 4.25 cents, closing at $1.6015 with two loads traded. This is the highest price since Nov. 11, 2025. The barrel cheese price jumped 7.00 cents, closing at $1.56 with no loads traded and one unfilled bid posted with no interested sellers. The dry whey price remained unchanged at 63.75 with no loads traded. Class III futures are steady to 65 cents higher, with the April contract showing the greatest gain. The butter price increased 2.25 cents, closing at $1.8350 with no loads traded. There were two unfilled bids and two uncovered offers remaining at the close. Grade A nonfat dry milk increased 2.25 cents to close at $1.6725 with two loads traded. Class IV futures are 25-50 cents higher. Butter futures are 2.63-7.50 cents higher with the April, May and July contracts limit up. Dry whey futures are 1.30 cents lower to 0.50 cent higher. Cheese futures are 0.10-5.30 cents higher.

Wednesday Morning Dairy Market Update - Spot Butter Price May Find Support

OPENING CALLS:

Class III Milk Futures:	8 to 15 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	1 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Class III milk futures were higher in overnight trade with double-digit gains in the March through May contracts. The February contract is up a penny and will show limited movement, with the contract mostly priced. The June and later contracts have not traded overnight. The Milk Production report was bearish to the market due to continued strong milk production and higher cow numbers. The Cold Storage report was neutral to cheese and bullish for butter. A reminder that the final day of the signup period for the Dairy Margin Coverage Program is Thursday. Historically, the USDA has extended the signup period, allowing for more time. However, if you intend to take part in the program, make sure you sign up by the deadline, as it may not be extended.

CHEESE:

The block cheese price has increased 27.75 cents since the low set on Jan. 12. This has been an unusual counter-seasonal move. However, it may not be counter-seaaonal, but rather a market correction of the bearishness that prevailed during the fourth quarter of 2025. It just seems counter-seasonal due to the price trend. Buyers have been taking advantage of the lower prices to hedge against higher prices late in the year. Fresh cheese demand has been good, keeping buyers aggressive in the spot market.

BUTTER:

Spot butter may find further support due to the Cold Storage report showing inventory down 17% from a year ago. Inventory increased in January but at a slower pace than last year. Demand has been good and absorbed increased production.

Tuesday Closing Dairy Market Update - January Butter Stocks Were 17% Below a Year Ago

GENERAL OVERVIEW:

Milk futures were mostly higher, with gains limited despite the strength in the block cheese price. The January Cold Storage report was neutral for cheese and bullish for butter.

MILK:

Class III futures were mostly higher, but the gains were moderate despite the strength of the spot block cheese price. There is some concern over continued strength in the market. However, buyers remain aggressive, and increasing prices may bring more buyers into the spot market. Phenomenal growth in milk production is taking place in Kansas and South Dakota. The January Milk Production report showed that production in Kansas increased 94 million pounds, up 26.2% from January 2025. Cow numbers increased by 45,000 head, with milk production per cow up 20 pounds from a year ago. South Dakota milk production increased by 46 million pounds, totaling 470 million pounds, up 10.8% from a year ago. The number of milk cows increased by 25,000 head, totaling 240,000 head. Milk production per cow was down 10 pounds. The increase in cow numbers offset the decline in production per cow.

AVERAGE CLASS III PRICES:

3 Month:	$16.26
6 Month:	$17.11
9 Month:	$17.45
12 Month:	$17.48

CHEESE:

American cheese inventory decreased 1.5 million pounds from December, totaling 792.3 million pounds. This was very close to the same level it was in January 2025. Swiss cheese inventory increased 464,000 pounds, totaling 23.1 million pounds. This was up 2.0% from December and up 1.0% from January 2025. Other cheese inventory totaled 564.8 million pounds, up 3.4 million pounds from December. This was 1.0% higher than in December, but very near the same level as a year ago. Total cheese production reached 1.380 billion pounds, up 2.4 million pounds from December. Inventory was near the same level as it was in January 2025.

BUTTER:

Butter inventory in January totaled 215.4 million pounds. This was an increase of 28.8 million pounds or 15% from December. However, inventory was down 17% from January 2025. This is a bullish report for butter. Even though cream supplies have been abundant and butter output strong, stocks are substantially lower than a year ago.

OUTSIDE MARKETS SUMMARY:

March corn closed up .25 cent per bushel at $4.2775, May soybeans closed up 5.50 cents at $11.5525, and May soybean meal closed up $1.90 per ton at $314.40. May Chicago wheat closed down .50 cent at $5.7325. April live cattle closed down $0.15 at $239.10. April crude oil is down $0.68 per barrel at $65.63. The Dow Jones Industrial Average is up 370 points at 49,175, with the NASDAQ up 236 points at 22,864.

Tuesday Midday Dairy Market Summary - Block Cheese Pushes Higher

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	5 Higher
SOYBEAN MEAL:	$2.00 Higher
LIVE CATTLE:	$0.32 Higher
DOW JONES:	467 Points Higher
NASDAQ:	237 Points Higher
CRUDE OIL:	$0.18 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 4.50 cents to close at $1.56 with eight loads traded. There were seven unfilled bids remaining at the close of spot trading and no uncovered offers. The barrel cheese price remained unchanged at $1.49 with no loads traded. The dry whey price decreased 1.75 cents to close at 63.75 cents with two loads traded. Class III futures are 15 cents lower to 12 cents higher. The butter price remained steady at $1.8125 with 28 loads traded. There were nine unfilled bids and three uncovered offers remaining. The price initially declined 2.25 cents before buying interest moved the price back up to unchanged. Grade A nonfat dry milk increased 0.50 cent to close at $1.65 with no loads traded. Class IV futures are 23 cents lower to 6 cents higher. Butter futures are 2.00 cents lower to 1.75 cents higher. Dry whey futures are 0.75 0 to 1.52 cents lower. Cheese futures are unchanged to 1.30 cents higher. The January Cold Storage report will be released today, with butter inventory being the category watched with the most interest.

January Milk Production up 3.4 percent

January Milk Production up 3.4 percent 

Milk production in the 24 major States during January totaled 19.1 billion pounds, up 3.4 percent from January 2025. December revised production, at 18.8 billion pounds, was up 4.4 percent from December 2024.  The December revision represented a decrease of 36 million pounds or 0.2 percent from last month's preliminary production estimate. Production per cow in the 24 major States averaged 2,082 pounds for January, 24 pounds above January 2025.  The number of milk cows on farms in the 24 major States was 9.15 million head, up 200,000 head from January 2025, and up 15,000 head from December 2025. 

2025 Annual Milk Production up 2.6 percent from 2024 

The annual production of milk for the United States during 2025 was 232 billion pounds, up 2.6 percent from 2024. Revisions to 2024 production increased the annual total 21 million pounds. Revised 2025 production was up 176 million pounds from last month's publication. Annual total milk production has increased 9.0 percent from 2016. Production per cow in the United States averaged 24,390 pounds for 2025, 218 pounds above 2024. The average annual rate of milk production per cow has increased 7.2 percent from 2016. The average number of milk cows on farms in the United States during 2025 was 9.50 million head, up 153,000 head from 2024. The average number of milk cows was revised up 8,000 head for 2025. The average annual number of milk cows has increased 1.8 percent from 2016. 

Tuesday Morning Dairy Market Update - Butter May Have Reached a Threshold

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	4 to 5 Lower
Soybean Meal Futures:	$0.50 to $1.00 Lower
Wheat Futures:	Mixed

MILK:

Hopefully, milk futures will retain the gains from higher underlying cash prices. However, the weakness of butter, nonfat dry milk, and dry whey may indicate the market may have reached a threshold. The key will be the demand that would maintain current price levels. The milk production report showed strong milk production for January, which is expected to continue as the year progresses. It will not be too long before milk production increases seasonally as spring flush unfolds. Increased processing capacity will handle the extra milk without difficulty. The hope will be that demand will keep up and milk prices will be supported. Due to USDA's Cold Storage report, no Dairy Revenue Protection prices will be released Tuesday.

CHEESE:

The block cheese price remained resilient Monday. The initial price decline was short-lived as buyers wanted ownership of cheese and bid up for it. Cheese prices are historically low, and buyers seem interested in purchasing as a hedge against higher prices in case they develop. Demand for cheese is good, but there is little concern over sufficient supplies of cheese due to strong milk production.

BUTTER:

The weakness of butter on Monday may indicate a price threshold has been reached. Buyers have been aggressive and have purchased quite a bit of butter over the past few weeks. They may have filled their needs and may now step back. The sellers may now step up more aggressively to take advantage of the higher price. The January Cold Storage report will be released Tuesday, and the level of inventory will indicate the strength of demand for the month.

Monday Closing Dairy Market Update - Dairy Cattle Slaughter Declines

GENERAL OVERVIEW:

Milk futures were mixed, with contracts mostly lower in Class III and mixed in Class IV. Class IV futures did not react much to the weakness of butter and nonfat dry milk. Dairy cattle slaughter in January was lower than in December and lower than the previous year. USDA will release the January Cold Storage report on Tuesday.

MILK:

Milk futures held their ground for the most part today, regardless of what spot prices did. The weakness of dry whey offset the gain in the block cheese price. However, the weakness of butter and nonfat dry milk should have put more pressure on Class IV futures, but traders took it in stride, believing that it may be a temporary setback. On the other hand, milk production continues to outpace last year, and the increasing cow numbers will support that growth. With the potential for higher milk prices as the year progresses due to the recent increase in the spot prices, farmers will continue to increase cow numbers. January dairy cattle slaughter totaled 246,800 head. This was 1,000 head less than January 2025 and 1,600 less than December. This was the lowest January slaughter since 2008. USDA will release the January Cold Storage report on Tuesday, providing insight into the level of demand for the month.

AVERAGE CLASS III PRICES:

3 Month:	$16.27
6 Month:	$17.04
9 Month:	$17.38
12 Month:	$17.42

CHEESE:

The block cheese price remained resilient today, bouncing back from an initial loss to close higher. Buyers did not step back to see if they could purchase supplies at lower prices, but remained aggressive in their desire to purchase in case higher prices would unfold sometime during the year. Currently, it looks like the milk supply will be sufficient to maintain strong cheese production.

BUTTER:

Butter may have established a temporary top as buyers may have purchased their desired supplies. This may leave a void in the market with little desire for buyers to be aggressive, as the sellers seem very willing to purchase butter but only at lower prices. It will be interesting to see whether butter inventory increased or decreased during the month compared to the previous year.

OUTSIDE MARKETS SUMMARY:

March corn closed steady at $4.2750, May soybeans closed down 3.50 cents at $11.4975 and May soybean meal closed down $1.30 per ton at $312.50. May Chicago wheat closed down 6.50 cents at $5.7375. April live cattle closed down $2.75 at $239.25. April crude oil is down $0.20 per barrel at $66.28. The Dow Jones Industrial Average is down 822 points at 48,804, with the NASDAQ down 259 points at 22,627.

Monday Midday Dairy Market Summary - Sellers Turn More Aggressive in Butter

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$0.60 Higher
LIVE CATTLE:	$2.32 Lower
DOW JONES:	702 Points Lower
NASDAQ:	245 Points Lower
CRUDE OIL:	$0.13 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 1.75 cents, closing at $1.5150 with six loads traded. The price initially declined 0.25 cent before buying interest took the price higher. The barrel cheese price remained unchanged at $1.49 with no loads traded. The dry whey price decreased 2.50 cents to close at 65.50 cents with no loads traded. Class III futures are mixed, ranging from 6 cents lower to 11 cents higher. Contracts through June are lower, while later contracts are higher in light trading activity. The butter price decreased 5.75 cents, closing at $1.8125 with 18 loads traded. The Grade A nonfat dry milk price decreased 4.00 cents to close at $1.6450 with two loads traded. Class IV futures are steady to 26 cents higher. Butter futures are 0.95 cent lower to 4.00 cents higher and are not reacting to the lower butter and nonfat prices. Dry whey futures are 0.55-2.00 cents lower. Cheese futures are 0.60 cents lower to 1.30 cents higher.

Monday Morning Dairy Market Update - Mixed Futures Price Activity Ahead of Spot Trading

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	6 to 9 Lower
Soybean Meal Futures:	$4 to $5 Lower
Wheat Futures:	3 to 4 Lower

MILK:

The milk production report was released Friday and showed continued strong milk production, production per cow, and higher cow numbers. The addition of 14,000 cows in the country indicates the retention of cows continues. With the recent increase in milk futures pointing to the potential for higher milk prices, the desire to hold onto cows will continue. Not only the potential for higher milk production, but also the continued high prices for calves. The USDA will release the January Monthly Cold Storage report on Tuesday, providing a good picture of demand for the month.

CHEESE:

Traders will be cautious due to the weakness of the block cheese price on Friday. This may indicate buyers have reached a threshold. If they are unwilling to bid higher to purchase cheese, sellers may become more aggressive as they want to sell at the highest price possible. This could push the price lower again.

BUTTER:

It is uncertain how much potential the market has after the substantial gains of last week. The government has indicated it will purchase $75 million of butter for food banks. This seems to have spurred the recent buying in the spot butter market. This purchase may now be factored in with limited upside potential from here.  

Friday Closing Dairy Market Update - January Milk Production Was Up 3.2%

GENERAL OVERVIEW:

Class III futures were lower but rebounded somewhat from the lows. Class IV futures retained their strength. January milk production was 3.2% above January 2025.

MILK:

Milk futures diverged with Class III futures lower following the block cheese and dry whey price weakness. Class IV futures showed substantial gains following the strength of butter and nonfat dry milk. It will be interesting to see where we go from here next week. The January Milk Production report was released on Friday and showed milk production in the top 24 states up 3.4%. Milk production per cow averaged 2,082 pounds, up 24 pounds from a year ago. Cow numbers increased by 15,000 head from December and up 200,000 head from January 2025. U.S milk production was 3.2% above January 2025, with milk per cow totaling 2,068 pounds, up 24 pounds above a year ago. Cow numbers increased by 14,000 head from December. U.S. cow numbers totaled 9.580 million head, up 189,000 from a year ago. Annual milk production was 2.6% higher than in 2024. Production per cow averaged 24,390 pounds, 218 pounds higher than in 2024. The annual average number of cows was 9.05 million head, up 153,000 head from 2024. There were four of the top 24 states that showed lower milk production in January. Washington was down 6.1%; New Mexico declined 3.8%; Pennsylvania declined 3.0%; and Illinois declined 1.4%. Kansas showed the largest gain of 26.1%, with South Dakota up 10.9%.

AVERAGE CLASS III PRICES:

3 Month:	$16.28
6 Month:	$17.06
9 Month:	$17.40
12 Month:	$17.45

CHEESE:

For the week, blocks increased 11 cents with 14 loads traded. The weekly average price is $1.4894. Barrels increased 5 cents with one load traded. The weekly average price is $1.4700. Dry whey decreased by 4 cents with no loads traded. The weekly average price is 72.50 cents. USDA will release the January Cold Storage report on Tuesday.

BUTTER:

For the week, butter increased 16.50 cents with 38 loads traded. This is the highest price since Sept. 11, 2025. The weekly average price is $1.7650. Grade A nonfat dry milk increased 8.50 cents with 10 loads traded. The weekly average price is $1.6238.

OUTSIDE MARKETS SUMMARY:

March corn closed up 1.75 cents per bushel at $4.2750, March soybeans closed down 3.50 cents at $11.3750, and March soybean meal closed up $5 per ton at $309.80. May Chicago wheat closed up 13.50 cents at $5.8025. April live cattle closed down $1.43 at $242.00. April crude oil is up $0.08 per barrel at $66.48. The Dow Jones Industrial Average is up 231 points at 49,626, with the NASDAQ up 203 points at 22,886.

Friday Midday Dairy Market Summary - Butter Jumps

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$4.60 Higher
LIVE CATTLE:	$.45 Lower
DOW JONES:	71 Points Higher
NASDAQ:	167 Points Higher
CRUDE OIL:	$0.05 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 1.25 cents, closing at $1.4975 with five loads traded. The barrel cheese price increased 2.00 cents, closing at $1.49 with no loads traded. The increase in the barrel price has no impact on Class III futures as it has no bearing on the price calculation. The bid disappointment came from dry whey, with the price declining 6.00 cents to close at 68.00 cents, with no loads traded. Class III futures are 5 cents higher to 51 cents lower, with November showing the only gain. The butter price jumped 9.00 cents, closing at $1.87 with 17 loads traded. There were 17 unfilled bids and seven uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk jumped 6.25 cents to close at $1.6850 with six loads traded. Class IV futures are 5-61 cents higher. Butter futures are 0.75-7.50 cents higher. Dry whey futures are 1.00 cents lower to 0.50 cent higher. Cheese futures are 0.50-2.50 cents lower. USDA will release the January Milk Production report this afternoon. I estimate milk production to be 4.2% higher than a year ago and cow numbers to be 4,000 head more than December.

Friday Morning Dairy Market Update - USDA to Purchase $148 Million of Dairy Products For Food Banks

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	1 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The strength in milk futures on Thursday improved the outlook for milk prices immensely, but prices remain low historically. The strength has been attributed to the announcement USDA plans to purchase $148 milion worth of dairy products for food banks. It is difficult to say spot butter and block cheese prices were higher because of it, or if the higher prices were from continued buying interest because of low prices. Of the $148 million, $75 million is butter, $32.5 million is cheddar cheese, $10 milion is Swiss cheese, $20.5 million is fluid milk, and $10 million is for ultra-high temperature milk. To put it in perspective, if butter is purchased at $2.00 per pound, it would be 37.5 million pounds. Cheddar cheese at $2.00 per pound would be 16.3 million pounds. Fluid milk at $3.00 per gallon would be 6.8 million gallons. The prices at which these will be purchased are not known at this point, so amounts may be different. The January Milk Production report will be released Friday afternoon. I estimate milk production at 4.2% above a year ago. I estimate cow numbers to be 4,000 head above December.

CHEESE:

It is difficult to anticipate the movement of cheese prices, as the pattern would suggest the price could retrace. The block cheese price has increased for three consecutive days and may be ready for a correction, with sellers becoming aggressive.

BUTTER:

The spot price has been trending higher since mid-January as buyers have been purchasing to increase ownership. There is no concern over supply tightness, but buyers wanted to build inventory as a hedge against the potential for higher prices as the year progresses.

Thursday Closing Dairy Market Update - November Dairy Exports Increase 14%

GENERAL OVERVIEW:

Class III futures were up sharply after spot cheese trading took place. However, the strength quickly ran its course with contracts dropping back. Class IV futures held their ground with most contracts closing at or near the highs. Dairy exports in November were significantly higher.

MILK:

Class III milk futures moved significantly higher after the spot block cheese price increased. However, the exuberance ran its course with contracts falling back significantly from their highs. Class IV futures remained strong as both butter and nonfat dry milk increased. The March contract reached $19.00 but slipped back. It seems that much of the buying interest is due to buyers wanting to increase ownership at the lowest prices they can, which has resulted in higher prices as they outbid each other. I am not trying to be bearish on the market, but caution needs to be exercised as the fundamentals do not suggest there may be much upside potential for the market. Global dairy prices have been strengthening and increasing the desire to buy in case prices find further support. Dairy exports in November increased 14% from November 2024 in milk solids equivalents. The value of dairy exports totaled $801.7 million, with the year-to-date value reaching $8.82 billion. The USDA will release the January Milk Production report on Friday. I estimate milk production to be up 4.2% from the previous year. I estimate cow numbers to be up 4,000 head from December.

AVERAGE CLASS III PRICES:

3 Month:	$16.42
6 Month:	$17.17
9 Month:	$17.50
12 Month:	$17.52

CHEESE:

Cheese exports have been strong all year, with November exports totaling 50,775 metric tons, up 28% from the previous year. Year-to-date exports are 20% above the same period in 2024.

BUTTER:

Butterfat exports have been phenomenal all year, with November exports exceptional. Exports totaled 15,308 metric tons. This was an increase of 227.0% from November 2024. Year-to-date exports are 157% higher than in the same period in 2024.

OUTSIDE MARKETS SUMMARY:

March corn closed down 1.25 cents per bushel at $4.2575, March soybeans closed up 7.50 cents at $11.4100, and March soybean meal closed up $.90 per ton at $304.80. May Chicago wheat closed up 14.25 cents at $5.6675. April live cattle closed up $0.90 at $243.43. April crude oil is up 1.35 per barrel at $66.40. The Dow Jones Industrial Average is down 268 points at 49,395, with the NASDAQ down 71 points at 22,683.

Fluid Milk and Cream - Western U.S. Report 8

California milk production is strong, despite some processors noting slightly weaker milk output for week 8 compared to week 7. Handlers note February 2026 milk production is comfortably up year over year and compared to January 2026. Manufacturers in the state are busy working through milk volumes and note open processing time, especially in the Central Valley, is very tight. Stakeholders indicate spot loads are not scarce. 

Arizona and New Mexico farm level milk output is steady. Handlers note milder than typical winter weather has positively impacted cow comfort and milk output. 

Farm level milk output varies from steady to stronger. Although processors convey milk intakes are within expectations, open processing time can be found and spot milk load demand from some manufacturers is stronger. According to the latest National Agricultural Statistics Service (NASS) milk production report, total milk cows in Washington decreased by 19,000 head and total milk cows in Idaho increased by 40,000 for December 2025 compared to December 2024. 

Milk production in the mountain states of Idaho, Utah, and Colorado varies from steady to stronger. Stakeholders note spot milk loads are tighter in some parts of the mountain states. Class I demand is steady, while demands for all other Classes are somewhat stronger throughout the region. 

Spot cream availability is stable and demand is stronger. Cream multiples moved lower on the bottom end and higher on the top end of both ranges this week. Condensed skim milk availability and demand are steady.

Thursday Midday Dairy Market Summary - Milk Futures Show Strong Gains

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	6 Higher
SOYBEAN MEAL:	$1.00 Higher
LIVE CATTLE:	$0.82 Higher
DOW JONES:	436 Points Lower
NASDAQ:	142 Points Lower
CRUDE OIL:	$1.22 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased a penny, closing at $1.51 with one load traded. The barrel cheese price remained unchanged at $1.47 with no loads traded. There were nine unfilled bids remaining at the close of spot trading. The dry whey price remained unchanged at 74.00 cents with no loads traded. Class III futures are 3 cents lower to 35 cents higher. Only the November and December contracts posted losses. The butter price jumped 7.50 cents, closing at $1.70 with 17 loads traded. There were 10 unfilled bids remaining at the close of spot trading. This is the highest price since Sept. 18, 2025. Grade A nonfat dry milk increased 2.50 cents to close at $1.6225 with one load traded. Class IV futures are 19-63 cents higher with the nearby March contract reaching $19.00. Butter futures are 3.10-6.07 cents higher. Dry whey futures are 0.25-0.80 cent higher. Cheese futures are steady to 2.20 cents higher.

Thursday Morning Dairy Market Update - Milk Futures Correct to Align With Cash

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Higher
Soybean Futures:	2 to 4 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	7 to 9 Higher

MILK:

Traders were very aggressive on Wednesday in milk futures. Higher cheese prices propelled Class III futures limit up for a while during the day as traders were caught short and needed to buy out of their positions. This may have pushed milk futures higher than they should have been relative to the underlying cash. This may result in lower futures as the market moves back in line as it corrects to move in line with the spot prices. The gains on Wednesday certainly improved the outlook for milk prices, but it is difficult to determine whether that will continue. Class III milk futures were higher two weeks ago and then crashed as spot cheese prices declined. The same could take place again.

CHEESE:

Cheese buyers have been aggressive, willing to bid up to purchase supplies at low prices and increase their ownership. It is not a matter that cheese stocks are tight or that the milk supply is tight. It is a matter of purchasing at historically low prices as a hedge in case the market changes and supply tightens.

BUTTER:

Buyers and sellers have been at a standoff in the spot market. Buyers do not need to be aggressive, and sellers do not need to move supply aggressively. The Global Dairy Trade action price is about $1.10 above the U.S. price, which will keep export demand strong.

Wednesday Closing Dairy Market Update - Global Dairy Trade Auction Gained 3.6%

GENERAL OVERVIEW:

Milk futures moved significantly higher, with Class III contracts leading the way. Some Class III contracts were limit up for a time, with a pool of unfilled bids increasing. Class IV futures posted double-digit gains, but with less strength than Class III. The Global Dairy Trade auction trade-weighted average increased 3.6%.

MILK:

Class III milk futures were very strong, spending a part of the day with the March, April, and May contracts limit up. A pool of orders developed in those contracts as traders wanted to buy out of the short positions but were unable to when contracts were limit up. Those contracts did come off the limit, allowing trading to take place. The August, September, and October contracts are now above $18.00. Class IV futures posted double-digit gains but lacked the strength of Class III. The March through December contracts are above $18.00. The Global Dairy Trade auction traded-weighted average increased 3.6%. This is the fourth consecutive event with a gain. Anhydrous milkfat increased 3.6% to $6,751 per metric ton or $3.06 per pound. Butter increased 10.7% to $6,347 per metric ton or $2.88 per pound. Cheddar cheese decreased 1.0% to $4,736 per metric ton or $2.15 per pound. Lactose increased 7.8% to $1,519 per metric ton or $0.69 per pound. Skim milk powder increased 3.0% to $2,973 per metric ton or $1.35 per pound. Whole milk powder increased 2.5% to $3,706 per metric ton or $1.68 per pound. Mozzarella cheese increased 5.0% to $3,879 per metric ton or $1.76 per pound.

AVERAGE CLASS III PRICES:

3 Month:	$16.28
6 Month:	$17.02
9 Month:	$17.38
12 Month:	$17.40

CHEESE:

The block cheese price moved above the previous high established on Feb. and moved to the highest price since Nov. 24, 2025. This is certainly a victory given the current level of milk production and inventory levels. The price is moving somewhat counter-seasonally, but the upside price potential is uncertain. The USDA will release the January milk production report on Friday, which is expected to show continued strong milk output.

BUTTER:

The butter price is supported for the time being, as buyers have been purchasing supplies aggressively to take advantage of the historically low price. It is uncertain whether butter inventory has increased in January, but the strength in price would suggest that it may not have. Buyers and sellers are waiting to see who will be more aggressive.

OUTSIDE MARKETS SUMMARY:

March corn closed up .75 cent per bushel at $4.2700, March soybeans closed down .50 cent at $11.3350, and March soybean meal closed down $1.90 per ton at $303.90. March Chicago wheat closed up 9.25 cents at $5.4700. April live cattle closed down $0.28 at $242.53. March crude oil is up 2.68 per barrel at $65.01. The Dow Jones Industrial Average is up 129 points at 49,663, with the NASDAQ up 175 points at 22,754.

Wednesday Midday Dairy Market Summary - Milk Futures Move Limit Up

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	1 Lower
SOYBEAN MEAL:	$2.10 Lower
LIVE CATTLE:	$0.02 Higher
DOW JONES:	159 Points Higher
NASDAQ:	231 Points Higher
CRUDE OIL:	$2.85 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 5.00 cents, closing at $1.50 with two loads traded. The barrel cheese price increased 2.00 cents, closing at $1.4700 with no loads traded. The dry whey price remained unchanged at 74.00 cents with no loads traded. The strength in cheese pushed the March, April, and May contracts limit up with a pool of traders wanting to buy to either get into the market or more likely to liquidate short positions, but are unable to do so as they are unable to trade. Class III futures are 2-75 cents higher. The butter price remained unchanged at $1.7050 with no loads traded. Grade A nonfat dry milk increased 0.75 cent to close at $1.5975 with two loads traded. Class IV futures are 5-25 cents higher. Butter futures are 2.05-5.37 cents higher. Dry whey futures are 0.02 cent lower to 0.72 cent higher. Cheese futures are 0.50-7.50 cents higher.