Dairy markets showed mixed signals on Thursday, with butter prices dipping and cheese steady. Class III milk futures gained ground despite weaker feed commodity prices, creating a complex landscape for producers. Key developments in global trade and consumer demand are shaping market dynamics.
Summary:
Dairy markets were mixed on Thursday, with butter falling to $2.40 per pound and whey dropping 2 cents, while cheese stayed steady. Class III milk futures rose slightly even with higher feed costs, as traders expect milk supplies to tighten. Butter and whey saw the biggest weekly drops due to global supply issues, making market decisions and awareness very important.
Dairy markets showed mixed activity Thursday, with butter declining while cheese markets held steady. Class III milk futures gained momentum despite weaker feed commodity prices, creating complex dynamics for producers.
Daily CME Cash Dairy Product Prices ($/lb.)
| Final | Change ¢/lb. | Trades | Bids | Offers | |
| Butter | 2.4000 | -1.00 | 7 | 1 | 2 |
| Cheddar Block | 1.8600 | NC | 0 | 0 | 0 |
| Cheddar Barrel | 1.8050 | NC | 0 | 0 | 2 |
| NDM Grade A | 1.3400 | NC | 0 | 0 | 3 |
| Dry Whey | 0.5900 | -2.00 | 0 | 1 | 5 |
Daily Cash Prices
Key products closed with:
- Butter: $2.40/lb (-1.00¢) [7 trades]
- Cheddar Blocks: $1.86/lb (No Change) [0 trades]
- Cheddar Barrels: $1.805/lb (No Change) [0 trades]
- NDM Grade A: $1.34/lb (NC) [0 trades]
- Dry Whey: $0.59/lb (-2.00¢) [0 trades]
Trading activity remained subdued except for butter, which saw seven trades with one bid and two offers remaining at settlement.
Futures Market Movement
Class III Milk (FEB): $20.34/cwt (+0.33 vs Wednesday) Class IV Milk (FEB): $19.55/cwt (-0.30 weekly)
Notable Futures:
Product Thu Close Weekly Change Butter $2.4738 -1.65% NDM $1.3180 -1.70% Dry Whey $0.6348 -7.68%
Futures trading showed particular interest in Q2 cheese contracts, with open interest increasing 12% week-over-week.
Weekly Price Trends
Current vs Prior Week Averages ($/lb):
| Product | Current Avg | Prior Week | Change |
|---|---|---|---|
| Butter | 2.4175 | 2.4745 | -2.31% |
| Cheddar Block | 1.8706 | 1.9005 | -1.57% |
| Dry Whey | 0.6100 | 0.6770 | -9.90% |
Dry whey markets saw the steepest weekly decline, falling nearly 10% amid reports of increased European exports.
Market Drivers Feed Costs:
- March corn futures rose 3.9% weekly to $4.955/bu
- Soybean meal futures dipped 5.4% to $306.50/ton
Production Signals:
Milk futures remain disconnected from feed markets, with Class III prices up 1.4% week-over-week despite higher corn costs – suggesting processors anticipate tighter milk supplies.
Regional Outlook
Midwest cheesemakers continue holding barrel inventories at multi-year lows, while Northeast butter production appears to be ramping up ahead of the spring baking season. California milk output remains constrained by high feed costs, with Central Valley producers reporting $1.80/cwt feed margins.
Traders should watch Friday’s cold storage report for confirmation of tightening cheese stocks, which could support prices despite the current sluggish trading activity.
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