GENERAL OVERVIEW:
Class III milk futures did not close the week positively. Strength in the block cheese price was met with skepticism. The block cheese price, nonfat dry milk price, and the dry whey price increased for the week.
MILK:
Traders are not convinced the increase in the block cheese price is going to hold for very long. The pattern has been that price increases are short-lived, and it may continue that way. There is sufficient supply to meet demand, and then some, as cheese inventory increased in August. Milk production continues to outpace a year ago and is expected to remain that way despite the outlook for low milk prices. Culling may increase as farms may reduce some of their cow numbers to reduce feed costs depending on the age of the cow and her milk output. At some point, some of the cows that have been kept in the herd will be culled as calf income may no longer be sufficient to offset the low milk prices. Due to the Farm Bill not having been passed by September 30th, the Dairy Forward Pricing Program has expired. Proprietary handlers establishing new forward contracts on or after October 1, 2026, will not be exempt from paying minimum Federal order prices on milk pooled in the order. This may eliminate proprietary milk plants from offering forward contracts to their patrons.
AVERAGE CLASS III PRICES:
| 3 Month: | $15.49 |
| 6 Month: | $16.10 |
| 9 Month: | $16.47 |
| 12 Month: | $16.74 |
CHEESE:
For the week, the block cheese price increased by 0.75 cent with 20 loads traded. The weekly average price is $1.2940. The barrel cheese price remained unchanged for the second consecutive week, with no loads traded. The weekly average price is $1.4525. The dry whey price increased by 2.00 cents with 3 loads traded. The weekly average price is 81.40 cents. This is the highest price since February 9, 2022.
BUTTER:
For the week, the butter price decreased by 6.00 cents with 99 loads traded. The weekly average price is $1.3444. Grade A nonfat dry milk increased 5.00 cents with 16 loads traded. The weekly average price is $2.1995. This is the highest price since May 19th.
OUTSIDE MARKETS SUMMARY:
December corn closed down 4.50 cents per bushel at $4.9775, November soybeans closed down 5.75 cents at $12.7825, and December soybean meal closed down $5.80 per ton at $347.50. December Chicago wheat closed up 0.25 cent at $6.8300.
December live cattle closed down $1.70 at $221.48. November crude oil is down $1.63 per barrel at $91.24. The Dow Jones Industrial Average is up 250 points at 51,177, with the NASDAQ up 319 points at 27,191.
