On the day after, as Republicans reflected on their harsh election rebuke, the Agriculture Department announced the October Federal order Class III milk price at $15.16 per hundredweight, down 88 cents from September, $1.75 below October 2025, and the lowest Class III since February. That put the 10-month average at $15.88, down from $18.31 a year ago, and compares to $18.82 in 2024. Wednesday’s Class III futures portended a November price at $17.85; December, $17.09; January, $16.82; February, $16.91; and March at $17.09.

The October Class IV price is $20.54, up $1.60 from September, $6.24 above a year ago, and the highest Class IV price since June. Its 10-month average stands at $18.75, up from $18.11 a year ago, and compares to $20.71 in 2024.

Dairy margins were relatively flat over the last half of October as lower milk prices and feed costs were largely offsetting, according to the latest Margin Watch (MW) from Chicago-based Commodity and Ingredient Hedging LLC.

“Milk prices were pressured by an extremely bearish monthly milk production report,” the MW stated, “While the feed markets continue to succumb to commodity fund liquidation on harvest pressure and generally benign weather conditions in South America amidst steady demand.

“The Class 3 market had a very volatile finish to October,” according to the MW, “As tightness in spot cash cheese along with a shortage in CME-deliverable cheese supplies sent blocks soaring from $1.30 to $1.80 per pound before a drop of 13.75 cents last week, the largest weekly drop since June 2022, with the market stabilizing at $1.60,” according to the MW.

Meanwhile, higher feed prices and another drop in the All Milk price pulled the September milk-feed ratio lower. USDA’s Ag Prices report had the September ratio at 1.90, down from 2 in August, and down from 2.40 in Sept. 2025.

The All Milk Price fell for the fourth month in a row, averaging $19.50 per cwt., with a 4.28 percent butterfat test, down 30 cents from August’s $19.80, which had a 4.20 percent test. It compares to $20.40 a year ago, with a 4.24 percent test.

The September cull price for beef and dairy combined averaged $159 per cwt., down $13 from August, after falling $3 the previous month, and was $5 below September 2025, but $87.40 above the 2011 base.

Quarterly milk cow replacements averaged $3,160 per head in October, down $100 from July, but $50 above Oct. 2025. Cows averaged $3,100 per head in California, unchanged from July, but $100 above a year ago. Wisconsin’s average, at $3,240, was down $180 from July, and $120 below October 2025.

Milk production margins decreased for the fourth month running, losing 68 cents per hundredweight and were below $10 per cwt. for the second straight month at $9.23, according to dairy economist Bill Brooks, of Stoneheart Consulting in Dearborn, Mo. “Income over feed costs in September were above the $8 per cwt. level needed for steady to higher milk production for the 37th month in a row. Input prices were higher in September with all three input commodities inside of the top 10 for September all-time. Feed costs were the sixth highest ever for the month of September and increased 38 cents per cwt. from August.”

Milk income over feed costs for 2026 (using Oct. 30 CME settling futures prices for Class III milk, corn, and soybeans plus the Stoneheart forecast for alfalfa hay) are expected to be $10.61 per cwt., a gain of 69 cents per cwt. versus last month’s estimate, according to Brooks. “Income over feed costs in 2026 would be above the level needed to maintain or grow milk production, and down $1.80 from 2025’s level and 9 cents lower than the 2021-25 average,” he said.

Thankfully, U.S. dairy exports remain strong, considering the amount of milk and dairy products we are producing. Exports worth $992.3 million left our shores in September, up 28.9 percent from a year ago, according to the Daily Dairy Report.

September nonfat-skim milk powder sailings were up 7.3 percent from a year ago and reached their highest level since April 2026, according to HighGround Dairy, and grew year-on-year for the first time since February. HighGround credited strong sales to Mexico, South America and Central America. “U.S. prices have maintained a premium to Kiwi and EU product for most of 2026,” says HGD, “but when September sales were booked, all three markets were nearly at parity, which may explain the volume uptick.”

Dry whey posted a 52.6 percent increase, reaching the second-highest figure on a 30-day adjusted basis, just behind August, according to HGD. Several nations saw sizable year-over-year gains. Canada posted a 316 percent increase, with “honorable mentions” to China, Indonesia and Japan.

Cheese exports were up 12.4 percent from a year ago and up 21.0 percent year to date. Butter was up 29.3 percent, as U.S. prices are the cheapest in the world.

USDA’s latest weekly slaughter data showed 52,400 dairy cows sent to slaughter the week ending Oct. 17, same as a year ago. Year to date, 2,184,200 cows, had been culled, up 80,600 head or 3.8 percent from a year ago.

CME block Cheddar, after closing Friday at $1.5975 per pound, fell to $1.5775 Tuesday, lowest in three weeks, regained a penny Wednesday, then gave it back Thursday, returning to $1.5775, 8.25 cents below a year ago, as traders awaited Thursday afternoon’s September Dairy Products report. The barrels were holding at $1.7250, where they’ve been since Oct. 28, 2.50 cents above a year ago.

Central region milk supplies remain steady, says Dairy Market News, as seasonal conditions continue to support cow comfort, but milk components are tightening slightly as spot milk availability became less abundant this week. Class I and Class IV processors are increasing intakes. Class III spot prices at mid-week ranged from flat-class to $3.00-over Class. Cheese manufacturers reported strong demand for Italian-style cheeses, with production struggling to keep pace with orders, resulting in tighter inventories. Cheddar quality issues impacting the region are beginning to resolve, while the recent squeeze in fresh Cheddar supplies on the CME has eased. Spot cheese purchasing remains active despite generally ample inventories. Retail demand remains firm, while food service demand holds steady, according to DMN.

Milk supplies are balanced across most of the West, except in Washington where positive HPAI detections in dairy cows was reported. Producers are working with veterinarians and regulatory officials to strengthen biosecurity measures and limit further spread. Although HPAI has not significantly affected milk production, market contacts report milk is moving from the Mountain States into Washington to keep facilities full. Cheese manufacturers report steady demand for Class III milk. Cheese production remains consistent, and plants continue to operate at strong capacity as facilities resolve previous downtime issues. Some contacts report facility upgrades that improve water efficiency, reduce rinse times, and enhance production safety standards.