GENERAL OVERVIEW:
Milk futures ended the day lower with most Class III contracts again making new contract lows. USDA increased its milk production estimate for this year and next year in the World Agricultural Supply and Demand (WASDE) Report.
MILK:
USDA increased its estimate for milk production this year by 600 million pounds to 237.2 billion pounds. The estimate for 2027 was raised by 600 million pounds to 238.6 billion pounds. If this comes to fruition, it would be an increase of 5.5 billion pounds over 2025 and 11.3 billion pounds over 2024. A substantial increase in the nation's dairy herd and higher milk production per cow are the reasons for the large increase. It was surprising that USDA increased milk output that much from the August report. Lower milk prices and the outlook for low milk prices are not expected to be a factor, according to USDA. The estimate for the average Class III price was reduced by $0.05 to $16.20 this year and reduced by $0.15 to $17.10 for 2027. The average Class IV price was increased by $0.40 to $18.55 this year and raised by $0.35 for 2027 to an average of $17.55. The All-milk price was raised by $0.05 this year from the August report to $19.90. It was left unchanged at $19.80 for 2027.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.22 |
| 6 Month: | $16.52 |
| 9 Month: | $16.79 |
| 12 Month: | $16.99 |
CHEESE:
For the week, blocks decreased by 0.25 cent with 7 loads traded. The weekly average price is $1.4631. The barrel cheese price fell 7.00 cents with 10 loads traded. The price decline and loads traded took place on Thursday and were the only activity of the week. The weekly average price is $1.4975. Dry whey increased 0.75 cent with one load traded. The weekly average price is 75.75 cents. USDA reduced the estimate for the cheese price this year by 0.50 cent to average $1.57, with the average for 2027 reduced by 2.00 cents to $6450 per pound. The dry whey price was left unchanged at 67.00 cents for this year and raised a penny next year to 69.00 cents.
BUTTER:
For the week, butter declined 7.00 cents with 72 loads traded. The weekly average price is $1.3806. Grade A nonfat dry milk increased 9.00 cents with 10 loads traded. The weekly average price is $1.9294. The estimated price for this year was raised 6.50 cents to $1.6700, while the estimated price for 2027 was raised 8.00 cents to $1.5500 per pound.
OUTSIDE MARKETS SUMMARY:
December corn closed down 3.50 cents per bushel at $5.3025, November soybeans closed down 35.75 cents at $12.9650, and December soybean meal closed down $4.10 per ton at $352.80. December Chicago wheat closed down 16.00 cents at $7.2525. October live cattle closed up $1.85 at $219.68. October crude oil is down $2.43 per barrel at $100.05. The Dow Jones Industrial Average is up 509 points at 52,573, with the NASDAQ up 251 points at 26,333.
