Frustration continues in our nation’s capital and around the country as the government shutdown remained in place this week, even impacting airline flights. It was announced that food aid for the 42 million Americans dependent on the Supplemental Nutrition Assistance Program (SNAP) would be partially funded after two judges ruled that USDA contingency funds must be used. President Donald Trump however stated on Truth Social that the SNAP benefits “will be given only when the Radical Left Democrats open up the government and not before.” The Senate returned to Washington on Monday but did not schedule another vote on the issue as we reached what has become the longest shutdown ever.

The USDA said it will publish a few of its regular reports, despite the shutdown. The September Milk Production report will be issued Nov. 10, and the Crop Production and World Agricultural Supply and Demand Estimates will be released Nov. 14. The Dairy Products report, which would have been issued this week was not.

The U.S. Supreme Court heard arguments this week regarding the legality of Trump’s tariffs. The case is being closely watched and could have huge implications for global trade and U.S. policy. Meanwhile, trade talks with Canada have not been rescheduled since the furor over a Canadian financed TV ad campaign prompted Trump to end the talks. Canadian Prime Minister Mark Carney apologized for the campaign.

The USDA announced the October Federal order Class III milk price at $16.91 per hundredweight, down 68 cents from September, $5.94 below October 2024, and the lowest Class III price since April 2024. That put the 10-month Class III average at $18.31, down from $18.82 a year ago, and compares to $17.10 in 2023.

Wednesday’s Class III futures settlements had the November price at $17.09; December, $17.02; January, $16.53; February, $16.50; and March at $16.62.

The October Class IV price is $14.30, down $1.87 from September, $6.60 below a year ago, and the lowest Class IV since March 2021. Its 10-month average stands at $18.11, down from $20.71 a year ago and compares to $18.93 in 2023.

“Dairy margins were flat to weaker over the last half of October as higher milk prices and an increase in the feed markets were largely offsetting,” says the latest Margin Watch (MW) from Chicago-based Commodity and Ingredient Hedging LLC.

“While the milk market was higher, this was only in Class 3 futures while ongoing weakness in butter caused Class 4 to sell off. Butter prices have reached a four-year low with the spot CME market dropping to $1.545 per pound to reach the lowest price since early 2021.

“Increased butterfat in milk tests combined with rising global milk output has depressed butter prices both in the U.S. and other markets and U.S. producer milk checks in most federal orders,” the MW stated. “The Class 3 market caught a bid though as several U.S. cheese plants experienced production issues recently that reduced cheese production during October.

“Both mozzarella and Cheddar barrel production was well below expected output due to unplanned disruptions for maintenance and compliance. USDA’s Dairy Market News mentioned downtime in each of its last five weekly reports during October, also noting that spot Cheddar barrel inventories were ‘somewhat tight.’”

Rabobank’s latest dairy report looked at consumer trends, animal protein, and dairy production. It stated, “Food inflation continues to outpace overall inflation, and restaurants are feeling the pressure, with nine straight quarters of declining traffic.” Speaking in the Nov. 10 Dairy Radio now broadcast, Rabobank senior dairy analyst Lucas Fuess said there continues to be signs of stress by consumers at retail as well as restaurants, though some are doing well.

Grocery store sales in key dairy products are still tending higher, according to Fuess, as dairy is an affordable form of protein, especially when compared to other protein sources. U.S. beef prices are at multi-year highs, he said, due to the U.S. herd being at the lowest level in decades, a result of higher feed costs and draught the past few years. The USDA’s all-fresh beef price reached a record $9.18 per pound in August, according to Rabobank, and U.S. cattle slaughter from January through September was down 1.5 million head, or 7 percent from a year ago.

“Pork prices also remain well ahead of year-ago levels and the five-year average, with cutout values of $109 per cwt. are averaging 15 percent above last year. Chicken production continues to outpace year-ago levels, and prices are down sharply in recent weeks, with boneless breast meat prices now 27 percent below year-ago levels.

“Crop producers are also under pressure,” says Rabobank. “Corn stakeholders are pushing for year-round use to boost ethanol demand, while soybean surpluses are increasing reliance on proposed biodiesel mandates to absorb excess supply.

“August milk production increased 3.2 percent versus the prior year, and at 9.52 million cows, the herd size is now the largest since the mid-1990s. July total dairy exports were up 7 percent year over year, and cheese is on track for a record year,” says Rabobank. We’ll get September data next week.

Cash block Cheddar dropped 10.25 cents Monday and 1.75 cents Tuesday, dipping to $1.6475 per pound, lowest CME price since September 26, but it closed Thursday morning at $1.66. It finished Friday at $1.7675 and a year ago at $1.72. The barrels fell to $1.70 Tuesday, lowest since Sept. 30, and were holding there Thursday, after closing Friday at $1.8050 and $1.7675 a year ago.

HighGround Dairy’s “Monday Morning Huddle” warned: “Given the heavy milk volumes and new cheese capacity, it seems unlikely that the (previous) price increases were due to supply constraints, other than the seasonal troughs in milk production in October and November. Cheese prices tend to increase in third and fourth quarter due to increased demand from the holidays and football season.

“Prices could maintain these levels a bit longer, but the team at HighGround expects declines at the tail end of 2025 into early 2026, as demand wanes and the Northern Hemisphere flush kicks up.”

StoneX says. “Fresh Cheddar was likely in good demand short term as some final holiday buying and exports were getting booked but that has since waned. Markets expected that demand to pull back and continue to be weighed down by strong milk production expectations.”

Central region cheesemakers told Dairy Market News that retail and food service sales are steady, but some note lighter demand compared to a year ago. Milk production is steady, but some cheesemakers say strong demand from Class I processors was reducing spot availability. Some cheesemakers were still down for maintenance and were selling spot milk to nearby processors. Demand for Class III milk was somewhat light as cheesemakers have sufficient volumes internally. Class III prices ranged from $2-under to $1.50-over Class at mid-week.

Western Cheese manufacturers are receiving contractual volumes of milk and spot loads are available. Unplanned production downtime and a few plants yet to run at full capacity contributed to the week’s situation. Cheese production varies from lighter to steady. Domestic demand is reported as steady, but not robust. Sellers generally convey sentiment that the approaching November holiday will strengthen demand for cheese over the next few weeks.