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.

Wednesday Morning Dairy Market Update - Class III Futures Post Further Gains

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	6 to 8 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	5 to 7 Higher

MILK:

Milk futures rebounded Tuesday after spot cheese and dry whey prices increased. Not only did Class III futures benefit from the strength, but it spilled over to Class IV futures as well. Class IV futures are in a better position to see further strength due to a bullish posture for butter and nonfat dry milk. However, the fundamentals indicated continued strong milk production that will maintain a sufficient supply of milk for bottling and manufacturing. Demand is good, but without a significant increase in demand, the upside potential for milk prices might be limited.

CHEESE:

Cheese plants are running on full schedules as the milk supply is heavy. Few plants are reaching out to the spot market for extra milk, which keeps spot milk prices at a discount to class. The increase in the spot cheese prices on Tuesday seems due to low prices rather than a change in fundamentals. It just makes sense for buyers to purchase and build inventory.

BUTTER:

The steady butter price did not provide traders with any sense of direction. The six unfilled bids and six uncovered offers that remained at the close of spot trading also provided no direction. Buyers and sellers were at a standoff waiting to see who would move first. The same may be true today.

Tuesday Closing Dairy Market Update - Traders Find Little to Get Excited About

GENERAL OVERVIEW:

Class III milk futures closed steady to higher due to the strength of the spot cheese and dry whey prices. Class IV futures were mixed with contracts through September steady to higher, with later contracts lower. Even with the movement of the underlying cash prices, the market showed little solid direction.

MILK:

The price swings that have been prevalent in spot prices have done little to determine the market direction. The current fundamentals are such that there is little reason to be concerned over the supply of milk. Plentiful milk means there should be a sufficient supply of dairy products for demand. There has been no indication of milk production slowing down. This may leave milk prices with limited upside price potential and could possibly result in the current milk futures prices rolling down as they move close to settlement. Class III futures show the highest price for the year in October at $18.10. Class IV has the highest price in September at $18.12. These are not exceptional prices, but coupled with the high prices received by calves, they would increase profitability significantly from the current level for many farms.

AVERAGE CLASS III PRICES:

3 Month:	$15.86
6 Month:	$16.56
9 Month:	$17.01
12 Month:	$17.14

CHEESE:

The gain in the block cheese price supported the market today, but the potential for a continued increase in price is likely limited. The current fundamentals suggest the best we may hope for is continued choppiness. Without slowing milk production and increased demand, there is little reason for cheese prices to trend higher.

BUTTER:

The spot butter price did not change today, leaving traders uncertain over price direction. This was reflected in butter futures, with contracts closing mixed. There were six unfilled bids and six uncovered offers remaining at the close. This provides little direction for potential trade on Wednesday.

OUTSIDE MARKETS SUMMARY:

March corn closed down 5.50 cents per bushel at $4.2625, March soybeans closed up 1.00 cent at $11.3400, and March soybean meal closed down $3.40 per ton at $305.80. March Chicago wheat closed down 11.00 cents at $5.3775. April live cattle closed up $2.18 at $242.80. March crude oil is down $0.56 per barrel at $62.33. The Dow Jones Industrial Average is up 32 points at 49,533, with the NASDAQ is up 32 points at 22,578.

Tuesday Midday Dairy Market Summary - Block Cheese Price Increased

OUTSIDE MARKETS SUMMARY:

CORN:	5 Lower
SOYBEANS:	1 Higher
SOYBEAN MEAL:	$2.90 Lower
LIVE CATTLE:	$3.55 Higher
DOW JONES:	157 Points Higher
NASDAQ:	100 Points Higher
CRUDE OIL:	$0.47 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 6.25 cents, closing at $1.45 with six loads traded. The barrel cheese price increased a penny, closing at $1.45 with one load traded. Trading in barrels has been rare since the price was removed from the Federal Order class price calculation. The dry whey price increased 2.00 cents, closing at 74.00 cents with no loads traded. Class III futures turned higher after cheese and the dry whey prices increased, with contracts ranging from 4 cents lower to 19 cents higher, with only the July and November contracts posting losses. The butter price remained unchanged at $1.7050 with four loads traded. Grade A nonfat declined a penny to close at $1.59 with one load traded. Class IV futures are 11 cents lower to 12 cents higher. Butter futures are 2.12 cents lower to 2.27 cents higher. Dry whey futures are 0.17 cent lower to 0.75 cent higher. Cheese futures are 0.20 cent lower to 1.70 cents higher.

Tuesday Morning Dairy Market Update - Traders May Show Little Interest Ahead of Spot Trading

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Lower
Soybean Futures:	1 to 2 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	6 to 8 Lower

MILK:

It may be difficult for milk futures to find good buying interest ahead of spot trading. The weakness of Class III futures last week will be difficult to overcome unless there is strong buyer interest in the spot cheese and dry whey markets. The spot cheese market has been choppy and is expected to remain that way for a time. Class IV futures have shown greater support due to the strength in butter, but futures are not expected to trend higher without further support from the spot butter price. The January Milk Production report will be released on Friday and will have an impact on the market.

CHEESE:

Cheese prices are expected to remain choppy. Supplies are sufficient for demand, with buyers showing little concern about supply tightness. This is not expected to change anytime soon. Milk production is holding and improving, with sufficient milk available for the vat and spot prices running below class.

BUTTER:

The weakness in the spot price on Friday could carry over to Tuesday as buyers may hold back to see if sellers become more aggressive at the higher price. Cream supplies are abundant, and butter plants are running seven days a week.

Friday Closing Dairy Market Update - Fluid Milk Sales Increased 1.2%

GENERAL OVERVIEW:

Class III futures closed lower for the week, while Class IV futures closed mixed compared to the previous week. The block cheese price declined during the week, while barrels held steady. There has not been a significant change in fundamentals during the week.

MILK:

The volatility in milk futures during the week, at times, had milk futures moving in the opposite direction compared to the movement of spot prices. Those are times during which we scratch our heads, wondering why. Short-term traders like volatility as they have a better chance of making a quick profit from the market, and there was no shortage of that.

The fluid milk sales report for December was released, showing that packaged milk sales were 1.2% higher than in December 2024. Whole milk sales were 4.6% above a year earlier. Flavored whole milk increased 8.2%; reduced-fat milk sales were steady. Low-fat milk declined 4.2%; fat-free skim milk declined 5.5%; flavored fat-reduced milk declined 1.2%; buttermilk increased 0.7%; and other fluid milk sales increased 3.2%. Organic whole milk sales decreased 1.1%; organic flavored whole milk increased 13.0%; organic reduced fat decreased 2.5%; organic low fat decreased 2.5%; organic low fat decreased 19.7%; organic fat-free declined 3.6%; organic flavored fat-reduced increased 18.0%, while other organic fluid milk sales decreased 11.4%. The markets will be closed on Monday for Presidents Day.

AVERAGE CLASS III PRICES:

3 Month:	$15.82
6 Month:	$16.50
9 Month:	$16.98
12 Month:	$17.10

CHEESE:

For the week, blocks declined 8.50 cents with 10 loads traded. The weekly average price is $1.4110. Barrels remained unchanged with no loads traded. The weekly average price is $1.44. Dry whey declined a penny with one load traded. The weekly average price is 72.20 cents. The block cheese price declined each day this week.

BUTTER:

For the week, butter declined 0.50 cent with 113 loads traded. The weekly average price is $1.6705. It has been a long time since this volume of loads has been traded over the course of one week. The Grade A nonfat dry milk price declined 4.00 cents with 17 loads traded. The weekly average price is $1.5995.

OUTSIDE MARKETS SUMMARY:

March corn closed up .50 cent per bushel at $4.3175, March soybeans closed down 4.25 cents at $11.3300 and March soybean meal closed up $1.30 per ton at $309.20. March Chicago wheat closed down 3.75 cents at $5.4875. April live cattle closed down $0.03 at $240.63. March crude oil is up $.02 per barrel at $62.86. The Dow Jones Industrial Average is up 49 points at 49,501, with the NASDAQ down 50 points at 22,547.

Friday Midday Dairy Market Summary - Butter Weakens

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	4 Lower
SOYBEAN MEAL:	$0.90 Higher
LIVE CATTLE:	$1.00 Higher
DOW JONES:	275 Points Higher
NASDAQ:	113 Points Higher
CRUDE OIL:	$0.26 Higher

MIDDAY MARKET UPDATE:

Both block and barrel cheese remained unchanged at $1.3875 and $1.44, respectively. There were no loads traded in either category. The dry whey price remained unchanged at 72.00 cents, with no loads traded. This should have resulted in Class III futures remaining somewhat steady, but contracts are 51 cents lower to 3 cents higher, with the March contract showing the greatest loss. The butter price declined 3.00 cents to close at $1.7050 with 29 loads traded. There were 23 unfilled bids remaining at the close of spot trading, but the buyers were not aggressive. Grade A nonfat dry milk gained 0.25 cent to close at $1.60 with seven loads traded. Class IV futures are 12 cents lower to 20 cents higher. Butter futures are 1.45 cents lower to 1.52 cents higher. Dry whey futures are 0.25 cent lower to 0.50 cent higher. Cheese futures are 0.30-4.50 cents lower.

Friday Morning Dairy Market Update - Overnight Trade Showed Little Interest

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	10 to 20 Higher
Butter Futures:	2 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures have declined from the highs, but should find support above the previous lows that were established before the strong price increase. The hope is demand will slowly raise the floor with each price increase, establishing a higher level. However, the upside price potential may be limited due to continued strong milk production. If the outlook for milk prices improves, milk output will not slow. The discussion of whether there are sufficient replacement heifers available to the market continues. What we do know is that cow numbers continue to increase. Expansions continue to take place, and heifers seem to be available if one wants to pay the high price. The markets will be closed on Monday in observance of Presidents Day.

CHEESE:

One would like to think the block cheese price was near its low, and buyer interest would increase. However, buyers seem to have little reason to be aggressive as cheese supplies are sufficient for demand, and there is little expectation of lower supplies. Many plants are running on full schedules, with cheese output higher than a year ago.

BUTTER:

The butter price is expected to show further strength due to the large volume of unfilled bids remaining at the close of spot trading on Thursday. Butter is available, but sellers may hold for higher prices due to the strong buying interest. Churns are operating seven days a week to process the cream supplies, but inventory is not building.

Thursday Closing Dairy Market Update - Stage Set for Higher Prices on Friday

GENERAL OVERVIEW:

Class III futures were higher despite a slight decline in the block cheese price and the steady dry whey price. Class IV futures found solid support from the jump in the butter price and a slight increase in nonfat dry milk. Class IV futures might find further strength as it follows butter.

MILK:

The volatility will continue as traders will react quickly to underlying cash movement as they want to scalp the market for a profit, and increased volatility will increase the odds for that to happen. The volatility will allow greater opportunities for hedgers to establish price protection. Mik production and components have been steady to stronger over the past week as the weather has improved cow comfort. The Central region reports that Class III demand has been steady to lighter recently, with a little more milk being available on the spot market. Spot milk is $1.00 to $4.00 under class, indicating the supply is plentiful. Overall fundamentals remain much the same as they had been for a few months and are not expected to change anytime soon.

AVERAGE CLASS III PRICES:

3 Month:	$16.08
6 Month:	$16.77
9 Month:	$17.17
12 Month:	$17.25

CHEESE:

Block cheese has not been able to find support and has declined back to the lowest level since Feb. 2. Many times, the movement and direction of butter impact the direction of cheese. Hopefully, this will take place soon to at least provide another price bump and hopefully keep it from trending lower.

BUTTER:

The jump in the butter turned Class IV futures higher, allowing the contracts to regain some of the recent losses. There is strong potential for spot butter to increase on Friday due to a large number of unfilled bids that remained at the close of spot trading. The price is still relatively low, and buyers are interested in increasing ownership to avoid the possibility of higher prices as the year progresses.

OUTSIDE MARKETS SUMMARY:

March corn closed up 3.75 cents per bushel at $4.3125, March soybeans closed up 13.25 cents at $11.3725, and March soybean meal closed up $4.90 per ton at $307.90. March Chicago wheat closed up 15.25 cents at $5.5250. April live cattle closed down $0.33 at $240.65. March crude oil is down $1.74 per barrel at $62.89. The Dow Jones Industrial Average is down 669 points at 49,452, with the NASDAQ down 469 points at 22,597.

Fluid Milk and Cream - Western U.S. Report 7

California milk production and components are strong this week. Open processing time is tight, especially in the Central Valley. Stakeholders indicate spot loads are available. 

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

Pacific Northwest milk production is stronger. Manufacturers indicate there is some open processing time for spot milk and spot cream loads to fill. 

In the mountain states of Idaho, Utah, and Colorado, farm level milk output varies from steady to stronger. Idaho handlers note milder weather has positively impacted cow comfort, which improved milk output this week. Spot milk loads are available. Dairy farmers throughout the region are meeting contractual milk volumes. Class III demands vary from steady to stronger, while all other Class demands are steady. 

Stakeholders convey cream load availability is somewhat tighter and demand is mixed. No changes in cream multiples are reported this week. Condensed skim milk availability and demand are steady.

Thursday Midday Dairy Market Summary - Butter Price Exceeds the Previous High

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	10 Higher
SOYBEAN MEAL:	$4.90 Higher
LIVE CATTLE:	$0.10 Lower
DOW JONES:	673 Points Lower
NASDAQ:	426 Points Lower
CRUDE OIL:	$1.93 Lower

MIDDAY MARKET UPDATE:

The block cheese price slipped 0.50 cent, closing at $1.3875 with one load traded. There were two uncovered offers remaining at the close of spot trading with no unfilled bids. The barrel cheese price remained unchanged at $1.44 with no loads traded. The dry whey price remained unchanged at 72.00 cents with no loads traded. Class III futures are 6 cents lower to 22 cents higher. The March contract shows the only loss. The butter price jumped 8.25 cents, closing at $1.7350 with 23 loads traded. There were 54 unfilled bids and no uncovered offers remaining at the close of spot trading, suggesting the price will continue to increase as buyers attempt to outbid each other to purchase at the lowest price they can. Grade A nonfat dry milk increased 0.25 cent to close at $1.5975 with three loads traded. Class IV futures are 3-66 cents higher. Butter futures are 0.25-5.85 cents higher. Dry whey futures are 0.02-0.50 cent lower. Cheese futures are 0.20 cent lower to 2.50 cents higher.

Thursday Morning Dairy Market Update - Limited Interest Ahead of Spot Traidng

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	6 to 12 Higher
Soybean Meal Futures:	$3 to $5 Higher
Wheat Futures:	1 to 2 Higher

MILK:

Traders may be uncertain over the strength or weakness of spot prices, leaving them guessing as to price direction ahead of spot trading. Market fundamentals are not creating a long-term trend other than sideways. Milk production is reported to be steady this week compared to last week. It may remain that way and begin to show some increase as the weather outlook is conducive to steady to higher milk output. The spread between Class III and Class IV futures has widened due to the strength of butter and nonfat dry milk, moving it back to the level seen last fall. The calculation for price based on the spot prices on Wednesday showed a Class III price of $15.17 and a Class IV price of $18.55. Bear in mind that this is just based on Wednesday's prices. The average over the month is from the weekly AMS prices, which are based on the daily spot prices that manufacturers use for pricing. Class IV milk is in a strong position.

CHEESE:

The weakness of cheese on Wednesday may increase the desire of buyers to step into the market more aggressively Thursday. However, there is a sufficient supply of cheese to satisfy demand, with buyers having little concern over supply tightness.

BUTTER:

The volume of unfiled bids in the spot market on Wednesday suggests the potential for further gains Thursday. Retail butter demand has improved, and export demand remains strong. This should keep buyers active even though supplies are readily available. 

Wednesday Closing Dairy Market Update - Milk Futures Manage a Mixed Close

GENERAL OVERVIEW:

Class III milk futures held up well despite the weakness in block cheese. The market had been overdone to the downside, with some stability expected. Milk production across much of the country has been steady over the past week.

MILK:

There has been little change in milk production over the past week, with temperatures moderating and a warmer trend coming. Spring flush is not too far in the future, which could result in a significant increase in production due to the high cow numbers. The handling of the increased milk production this year should not be an issue due to greater manufacturing capacity. There is little to hold back growth in milk production. Lower milk prices do not have the usual impact they normally would have due to the high prices received for calves to supplement farm income. There is no tightness or shortage of milk for bottling and manufacturing. Class III milk futures held up well despite the decline in the block cheese price. The market had been overdone to the downside the past two days, with contracts remaining in line with cash today.

AVERAGE CLASS III PRICES:

3 Month:	$16.03
6 Month:	$16.67
9 Month:	$17.09
12 Month:	$17.00

CHEESE:

Most manufacturers are running on full schedules, with milk production steady this week, but at a higher level than a year ago. There is sufficient spot milk available with spot prices at $1.00 to $4.00 under class. The ample supply of milk continues to limit the upside price potential for spot cheese. Export demand is reported to be strong, but it is not enough to support the cheese price. However, any demand is helpful and may keep the price from falling back too far.

BUTTER:

Manufacturers operate on full schedules seven days a week. Cream supplies are plentiful, keeping plants supplied with limited needs to come to the spot market. Retail butter demand is strong and exceeding last year's level. Food service demand is lower than last year and may not change much in the near term. Even though the butter price has increased, it is still $0.97 per pound below the recent price on the Global Dairy Trade auction and should keep export demand strong.

OUTSIDE MARKETS SUMMARY:

March corn closed down 1.25 cents per bushel at $4.2750, March soybeans closed up 1.50 cents at $11.2400, and March soybean meal closed up $2.20 per ton at $303.00. March Chicago wheat closed up 9.00 cents at $5.3725. April live cattle closed up $3.55 at $240.98. March crude oil is up $0.67 per barrel at $64.63. The Dow Jones Industrial Average is down 67 points at 50,12, with the NASDAQ down 36 points at 23,066.

Ample milk supplies meet strengthening futures prices in January

U.S. milk production remains abundant to start 2026, supported by a historically large dairy herd. December milk production was up 4.4% year over year, and November’s figure was revised higher. High milk supplies are translating to smaller “milk checks” and tighter profit margins.

The national cow herd reached 9.57 million head as of January 1, 2026, thanks to minimal culling over the past year. The milking herd expanded by 244,000 head over the past 18 months, the fastest growth in more than 30 years. However, milk production growth may begin to slow in the second half of 2026 as producers manage their herds. In response to lower prices, producers could more aggressively cull cows. Additionally, replacement heifer inventories have dipped by about 10,000 head, in part because many farmers are crossbreeding dairy cows with beef sires – a trend that limits purebred dairy heifer availability. With fewer replacements entering herds, producers must rely more on older cows, which could dampen productivity.

At the same time, dairy product prices are showing unexpected strength. In late January, cheddar block cheese prices jumped more than $0.25, reaching about $1.45 per pound amid robust export demand and lean domestic inventories. Notably, U.S. cheese production climbed nearly 3% in 2025 even as per-capita consumption declined, making exports essential to clearing the market. Milk powder prices are also rebounding on tighter stocks. Nonfat dry milk (NDM) rose $0.20 per pound to its highest price in over a year. Skim milk powder (SMP) values followed suit. This broad price rally, though fueled partly by a recovery from last year’s depressed levels, marks a bullish turn for dairy markets. In turn, milk prices are finding price support.

As the year progresses, strong export-driven demand and potential milk supply constraints (fewer replacements, more culling) could bring the market into better balance.

Profitability

Dairy: Breakeven profitability - Bearish 12-month outlook

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

Wednesday Midday Dairy Market Summary - Block Cheese Shows Further Weakness

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$3.10 Higher
LIVE CATTLE:	$3.37 Higher
DOW JONES:	126 Points Lower
NASDAQ:	19 Points Lower
CRUDE OIL:	$1.08 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 5.00 cents, closing at $1.3925 with six loads traded. This is the lowest price since Jan. 30. There was one unfilled remaining and two uncovered offers remaining at the close of spot trading. The barrel price remained unchanged at $1.44, with no loads traded and buyers and sellers showing no interest in doing any business. This has been a standard since barrels have been removed from class pricing. The dry whey price remained unchanged at 72.00 cents with no loads traded. Class III futures are 8 cents lower to 2 cents higher. The butter price gained 1.75 cents, closing at $1.6275 with 22 loads traded. The price initially moved 2.25 cents higher before selling trimmed the gain. There were 34 unfilled bids and no uncovered offers remaining at the close. This suggests further price gains. Grade A nonfat dry milk declined 0.50 cent to close at $1.5950 with two loads traded. Class IV futures are 15 cents lower to 15 cents higher. Butter futures are 5.10 cents lower to 1.55 cents higher. Dry whey futures are 1.45 cents lower to 0.30 cent higher. Cheese futures are 0.50 cent lower to 1.00 cent higher.

Wednesday Morning Dairy Market Update - Higher Prices Expected For Milk Futures

OPENING CALLS:

Class III Milk Futures:	6 to 12 Higher
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

It seems the recent trading pattern may develop again Wednesday. The pattern has been that milk futures will move in one direction or the other, despite the underlying cash prices not supporting the move. On Tuesday, spot prices were rather stable, but further pressure was put on milk futures as short-term traders have been able to extend the weakness for their benefit and may now cover those short positions at a greater profit. This has happened recently in both price weakness and strength. This type of market action does provide opportunities for hedgers to initiate better positions to protect prices due to the increase in volatility. Market fundamentals have remained stable and may remain that way for a longer period.

CHEESE:

Lower cheese prices are expected to find buying interest again. Supplies are readily available, but it makes sense to purchase at low prices to hedge against higher prices that may develop as the year progresses. Higher milk production may limit the upside potential as cheese production remains strong.

BUTTER:

The butter price may have greater upside potential than cheese, but the strength may be limited due to plentiful cream supplies from record butterfat content in milk. Export demand remains very strong and should help provide support to the maket.

Tuesday Closing Dairy Market Update - USDA Raises Milk Production and Prices

GENERAL OVERVIEW:

Milk futures closed mostly under pressure despite minimal movement in the underlying cash. The World Agricultural Supply and Demand Estimates report was released, showing limited changes in grains and increases in milk and dairy product prices.

MILK:

Class III milk futures were mixed, with contracts lower during the first half of the year and later contracts higher. Class IV futures suffered substantial losses despite mixed butter and nonfat dry milk spot prices. It appears milk futures will remain volatile despite limited movement in the underlying cash. USDA increased its estimate for milk output this year by 200 million pounds, totaling 234.5 billion pounds. If this comes to fruition, production will be 3.0 billion pounds higher than in 2025. The estimate for the average Class III price was raised by $0.30 to $16.65 per cwt. The Class IV estimate was raised to $15.70, up $1.25 from the previous month. The All-milk price was raised to $18.95, up $0.70 from the January report. Beginning stocks on a fat basis were raised by 400 million pounds, totaling 12.8 billion pounds. Exports increased by 500 million pounds, and more than offset the increase in inventory. Beginning stocks on a skim-solid basis were reduced by 200 million pounds, while exports were reduced by 100 million pounds.

AVERAGE CLASS III PRICES:

3 Month:	$16.07
6 Month:	$16.72
9 Month:	$17.13
12 Month:	$17.20

CHEESE:

The USDA raised its estimated average cheese price to $1.6050, up $0.02 from the January estimate. This would be a decrease of about $0.7850 per pound from last year. The dry whey price was raised to $0.6900 per pound, up $0.02 from the previous estimate. This would be an increase of about 9.50 cents from 2025.

BUTTER:

The USDA increased its estimate for the butter price this year by $0.08 per pound to an average of $1.68. This would be about $0.54 per pound lower than in 2025. The nonfat dry milk price estimate was raised by $0.11 per pound to $1.3150 and would be $0.08 higher than in 2025.

OUTSIDE MARKETS SUMMARY:

March corn closed steady at $4.2875, March soybeans closed up 11.75 cents at $11.2250, and March soybean meal closed up $3.00 per ton at $300.80. March Chicago wheat closed down .50 cent at $5.2825. April live cattle closed down $0.78 at $237.43. March crude oil is down $0.18 per barrel at $64.18. The Dow Jones Industrial Average is up 52 points at 50,188, with the NASDAQ down 136 points at 23,102.

Tuesday Midday Dairy Market Summary - Bounce in Butter Shows Little Impact

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	11 Higher
SOYBEAN MEAL:	$2.40 Higher
LIVE CATTLE:	$0.17 Higher
DOW JONES:	59 Points Higher
NASDAQ:	53 Points Lower
CRUDE OIL:	$0.34 Lower

MIDDAY MARKET UPDATE:

The block cheese price slipped 0.25 cent to close at $1.4425 with no loads traded. The barrel chees pricre remained unchanged at $1.4400 with no loads traded. The dry whey price declined a penny, closing at 72.00 cents with one load traded. Class III futures are mixed, ranging from 28 cents lower to 11 cents higher. The butter price increased 1.00 cents to close at $1.6350 with 19 loads traded. Grade A nonfat dry milk slipped 0.50 cent to close at $1.60 with no loads traded. Class IV futures are 26-81 cents lower despite the increase in butter. Pressure may be from the spot butter price slipping back from the higher price during spot trading. Butter futures are 3.27 cents lower to 1.30 cents higher. Dry whey futures are 0.30 cent lower to 1.35 cents higher. Cheese futures are 0.50 to 2.70 cents lower. USDA estimates milk production this year to total 234.5 billion pounds. This is 200 million pounds higher than the estimate a month earlier. If realized, it would be 3.0 billion pounds above 2025.