Milk Prices

Warm Weather Boosts Milk Output as USDA Projects Higher 2026 Production

Thu, 19 Feb 2026 22:00:37 GMT

In the previous article, we were discussing how the severe winter conditions were bringing a rally for dairy products, led by butter. A historic winter event which shut down most of the south and southeast parts of the country. Weather conditions brought a quick rush of buying, with retailers trying to stock shelves ahead of the storms. Today it is a much different picture outside, with historically warm temperatures. The extreme cold suppressed production temporarily. Now that temperatures have risen, it is being reported that not only has production come back to normal, but now many farms are starting to see an early spring production surplus.

Last week, the USDA released the February WASDE report, giving us data that confirms their stance on another year of higher production. Milk production increased another 200 million pounds from last month’s report, coming in at 234.5 billion pounds of milk projected for 2026. That is 3 billion pounds more than the 2025 estimates.

The USDA lowered domestic use for Fat Basis, which caused a 400 million increase in beginning stocks for the 2026 Fat Basis Supply, offset only slightly by an increase in exports and a decrease in imports bringing the 2025 ending stocks number up to 12.8 billion pounds of milk. For 2026, there was a 700 million increase in ending stocks, partially due to the beginning stocks increase, but also lower domestic use. 2026 also had a bright spot to offset some of the higher supply, there was a 500-million-pound increase in exports projected.

From a Skim-Solid Basis, the beginning stocks number for 2026 was actually decreased by 200 million pounds, coming from slightly higher domestic use in 2025. For 2026, the USDA lower export projections in this category slightly, bringing the 2026 expected ending stock for Skim-Solid Basis down to 9.0 billion pounds, the lowest expected ending stock number in years. 200 million lower than the 2025 estimate, 400 million lower than 2024, and 800 million lower than 2023. Domestic usage is the main driver to pull that ending stocks number as low as projected number published here.

As a result, the 2025 Dairy Prices were all unchanged, outside of a 2-cent increase to the estimated All Milk Price. For 2026, there were some fairly significant increases in every dairy category. This biggest increase happened to be in Class IV Milk which increased $1.25 cents from last month’s report to $15.70.

These numbers lay out an important snapshot of the state of the dairy markets today. Supply is plentiful, but usage is steady. Exports are the shining light on the market but we need domestic usage to increase if we want to significantly change the outlook for prices going forward. One way that could be possible is a combination of the new push for whole foods, especially when looking at school options available like we may see as early as this fall.

Sarah Jungman is a commodity broker with AgMarket.Net and AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Sarah’s office is located in Winterset, Iowa and she may be reached at 515-272-5799 or through the website www.agmarket.net .

The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There is risk of loss in trading commodity futures and options on futures. It may not be suitable for everyone. This material has been prepared by an employee or agent of JSA and is in the nature of a solicitation. By accepting this communication, you acknowledge and agree that you are not, and will not rely solely on this communication for making trading decisions

Butter Volatility Brings Hope

Thu, 05 Feb 2026 16:16:54 GMT

Limit market moves and action-packed cash markets gave dairy prices some excitement to close out January. Nonfat Dry Milk exploded higher with butter taking us on a rollercoaster ride. Milk futures had a strong close last week and have given some indications of strength to be continued this week.

The news cycle for the dairy industry has been packed with government support from the new food pyramid guidelines, continued tension with tariffs, Dairy Margin Coverage triggering the only payment for 2025 in the month of December, formula recalls, screwworm cases approaching the U.S., dramatic outside markets, and weather concerns across the country. Each day was a new story bringing big swings in prices.

The weather from the last two weeks played a major role in the volatility. Consumers and retailers alike had panic buying ahead of reports of incoming snow and ice across the south. Concerns over the ability to not only travel to the store but to get products shipped caused some short-term buying activity that turned into a buyer quarrel in the cash market. This may have triggered not only the assumption that the lows have been set, but also some excitement around buying opportunities.

The growing milk production reports, the abundance of cream, and the lackluster demand in the food service industry made butter buyers think they had plenty of time to purchase their needs. When the storm news started looking worrisome, a little buying action happened which triggered those that thought they had more time to sit on their hands to grab at what they could to fill inventory. Everyone wanted to fill freezers with cheap products but thought they missed out on the bottom. It created a buying frenzy, then a sell-off with the speed at which prices increased and another rush of buying from those that thought they missed the first opportunity.

What is uncertain is how the butter inventory has pulled back with the availability of cream over the last few months. Exports have been strong and retail has been moving product, however production should have had an advantage with the endless supply of cream in the market. Should inventory continue to decline, we could be setting up for a positive impact on prices in the coming months.

Milk prices have been supported by increasing butter, dry whey and nonfat dry milk despite the increasing milk production numbers. While there is no big red flag saying prices should jump higher, you can see the willingness of buyers to step in and be aggressive with the fear of missing out. Fundamentals do not support a major rally today but the recent price volatility in dairy markets suggests a change is on the horizon.

Sarah Jungman is a commodity broker with AgMarket.Net and AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Sarah’s office is located in Winterset, Iowa and she may be reached at 515-272-5799 or through the website www.agmarket.net .

The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There is risk of loss in trading commodity futures and options on futures. It may not be suitable for everyone. This material has been prepared by an employee or agent of JSA and is in the nature of a solicitation. By accepting this communication, you acknowledge and agree that you are not, and will not rely solely on this communication for making trading decisions.

DMC Enrollment Opens for 2026, Now with Expanded Coverage

Tue, 13 Jan 2026 20:25:22 GMT

At a glance:

DMC enrollment for the 2026 coverage year opens Jan. 12 and runs through Feb. 26.
Tier 1 coverage expands from 5 million to 6 million pounds under OBBBA.
All producers will establish a new production history using more recent milk marketings.
Producers can lock in coverage from 2026 through 2031 with a 25% premium discount.

Dairy farmers will soon have the opportunity to enroll in an expanded and reauthorized Dairy Margin Coverage (DMC) program, following improvements included in the One Big Beautiful Bill Act (OBBBA).

During the 107^th American Farm Bureau Federation Convention, U.S. Secretary of Agriculture Brooke Rollins announced enrollment for the 2026 DMC coverage year will open Jan. 12 and run through Feb. 26. DMC remains a key safety net program designed to help offset the gap between milk prices and feed costs during periods of financial stress.

Signed into law by President Donald Trump on July 4, 2025, OBBBA reauthorized DMC through 2031 and introduced several significant changes aimed at strengthening the program’s value for dairy producers.

Higher Tier 1 Coverage

One of the most notable updates is the expansion of Tier 1 coverage. Under OBBBA, the Tier 1 production threshold increases from 5 million pounds to 6 million pounds of milk. This change allows more production to qualify for lower premium rates, improving affordability and risk protection for small- and mid-sized dairy operations.

New Production History Established

All dairy operations that enroll in DMC for the 2026 coverage year will establish a new production history.

For existing operations that began marketing milk on or before Jan. 1, 2023, production history will be based on the highest milk marketings from 2021, 2022 or 2023. New dairy operations that started after Jan. 1, 2023, will use their first year of monthly milk marketings, even if that year is incomplete.

Producers will be required to provide milk marketing statements or other acceptable production evidence to establish their production history.

Multiyear Enrollment Option with Discounted Premiums

OBBBA also introduces a long-term enrollment option. Dairy operations can choose to lock in DMC coverage levels for six years, covering 2026 through 2031. Producers who select this option will receive a 25% discount on premium fees, offering additional cost savings and predictability.

Coverage Options Remain Flexible

DMC continues to offer multiple coverage levels, including a catastrophic option that is available at no cost beyond the $100 administrative fee. Producers can select coverage levels that best align with their risk tolerance and financial goals.

To help evaluate coverage options, producers are encouraged to use USDA’s online dairy decision tool, which allows operations to compare scenarios and determine the most appropriate level of protection.

With higher Tier 1 coverage, discounted premiums for long-term participation and updated production history rules, the changes under OBBBA are expected to enhance DMC’s role as a risk management tool as producers plan for the years ahead.

New Year, Same Bearish Dairy Market

Wed, 07 Jan 2026 17:32:16 GMT

December was a month of catch up for the government to resume some of the final reports missing from the market since the government shut down. The Cold Storage Report was one of the most awaited reports, released December 23^rd. This brought the market up to speed on what inventory was on hand for most for butter and cheese as well as some frozen meat, fruit and vegetables.

Cheese stocks were down 1 percent from the previous report but up 2 percent from November 2024. Swiss cheese was the only product with more on hand than last month but interestingly enough, it was the only product with less than a year ago. Butter stocks were down 8 percent from last month and down 1 percent from 2024.

To put in in perspective, when comparing to 2023 stocks, butter was down 1% from 2023, while cheese stocks were down over 5 percent from two years ago. Therefore, the report could have been perceived as somewhat friendly, unfortunately, it just wasn’t enough to get the market excited, given the surplus of production seen in 2025.

While milk production has been declining from the summer highs, it is still seen to be well above previous year’s production throughout most of 2025, with the most recent report showing production up 4.5% in November when compared to 2024. Even if the market continues to slow production, the total production for the year still exceeds any domestic or foreign demand seen today.

Exports Grow, but at the Cost of Price

Foreign demand has been a bright spot in the U.S. dairy market, despite the lack of Chinese demand, there has been increases in export demand across most dairy sectors with butterfat showing the largest gains in 2025 with 150 percent increase from 2024 as of the September data released mid-December. This extra demand is a direct correlation of falling butter prices with the surplus of domestic product. Cheese sales also set a new monthly record with a 35 percent increase in export demand year over year in the month of September.

As we follow trends, we can see that U.S. cheese had more product sold in foreign markets in the first nine months of 2025 than was sold in any single year outside of 2024. Butter has been impressive to watch despite the tensions with Canada. While sales to our northern neighbor have declined, sales to The Netherlands, Australia and Saudi Arabia have exploded. Although new foreign demand was prevalent, it came at the cost of lower prices in order to open opportunities in those foreign markets.

In terms of foreign markets, the question asked most today is what impact the capture of Venezuela’s President could have on dairy markets, if any. To answer that, it is more complicated than looking at today’s import volumes. For example, the United States is the leader in supplying whey product and SMP to Venezuela, however Columbia and Brazil dominate most of the supply for liquid and condensed milk products being shipped into the country.

Venezuela’s Growing Role in U.S. Trade

When looking over the past five years, the United States has seen a large increase in demand for its products in Venezuela, becoming the second largest supplier of agricultural products for their country. Dairy and pet food have grown the most, although still a small portion of the products we ship to Venezuela. The most notable agricultural product shipped to Venezuela is soybean meal as we are their biggest supplier. For the cattle industry, our genetics have been in high demand as they work to improve their herds.

President Trump has stated that the U.S. will run Venezuela for the short term which could be beneficial to support cost effective trade with the country for many agricultural products. For dairy, they have a modest demand in the big picture for our country. Increase soybean meal demand could cause more issues for the U.S. Dairy farmers as it could increase cost of production. All of this is speculative in these early stages. What we do not know is how much instability this could bring to the Venezuelan economy or what global backlash could come in the next few months.

In conclusion, the U.S. dairy industry is fighting over supply and looking for a story to help eat through the surplus of product getting produced. While there is no near-term solution, there are a lot of unanswered questions in world trade as we navigate through tariffs, geopolitical conflict and strong global demand.

Sarah Jungman is a commodity broker with AgMarket.Net and AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Sarah’s office is located in Winterset, Iowa and she may be reached at 515-272-5799 or through the website www.agmarket.net .

The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There is risk of loss in trading commodity futures and options on futures. It may not be suitable for everyone. This material has been prepared by an employee or agent of JSA and is in the nature of a solicitation. By accepting this communication, you acknowledge and agree that you are not, and will not rely solely on this communication for making trading decisions.

Zisk Dairy Projections for 2026: Where Profits Will be Won (and Lost)

Thu, 11 Dec 2025 17:57:24 GMT

Zisk is a downloadable app now used by more than 4,500 dairy farms, representing over 4.9 million cows—more than half of the U.S. herd. In its fourth annual report, it shows that dairy producers once again anticipate a strong year ahead, with average profitability rising across much of the country. Yet the gains will not be evenly distributed. With producers relying on the app an average of 1.5 times per day, spending about 1.7 minutes per weekday reviewing profitability updates. On a weekly basis, users log an average of 36 visits and 3.75 minutes in the app. Zisk delivers an unusually detailed and timely snapshot of what to expect in 2026. The report is available for free online at ziskapp.com.

Larger herds are projecting far higher profits than smaller ones, pushing the scale gap wider than we have seen in previous reports. Large farms continue to outperform, the 2026 predictions makes it unmistakably clear that operations above 5,000 cows sit at the top of the profitability curve. At the other end of the spectrum, herds with fewer than 250 cows are again expected to struggle, often posting negative or marginal returns despite favorable milk prices. The expansion in herd size across Zisk users also continues; as a result, the economies of scale benefiting the largest herds are clear, strong, and influential in shaping national.

The Midwest once again leads all regions with the strongest projected profitability, averaging $588 per cow. While the region benefits from robust production and stable basis levels, the most striking differences emerge across herd sizes. Farms under 250 cows expect just $20 per cow in profit, while those with 250–1,000 cows anticipate $228. Profitability rises sharply for larger operations, with 1,000–5,000 cow herds forecasting $684 and herds above 5,000 cows expecting $776 per cow. Wisconsin stands out with exceptional projections of $924 per cow, followed by strong expectations in South Dakota, Minnesota, Iowa, and Nebraska.

The Southeast will be the second most profitable overall, posting an average of $464 per cow and marking one of the region’s strongest years in recent memory. Yet, as elsewhere, small farms continue to face difficulty. Profitability improves to $129 for farms with 250–1,000 cows and climbs significantly for larger operations; those above 5,000 cows see $534. Florida leads the region followed by strong performance in Georgia and North Carolina. May other southeastern states, in contrast, post negative expectations.

The Northwest follows closely with an average profit of $405 per cow, maintaining the region’s reputation for stability. Small herds under 250 cows expect slight losses of $15 per cow, while those above 5,000 cows see $481. Idaho, Utah, and Colorado all post solid returns exceeding $400 per cow, while Washington remains steady. Oregon and Montana continue to face challenges.

The Northeast posts moderate expectations, averaging $374 per cow for 2026. Smaller farms remain under pressure: herds under 250 cows anticipate losses of $35 per cow. Performance varies widely across states. Rhode Island leads with an unexpected $778 per cow, while Vermont, Maryland, and Virginia all exceed $380. New Hampshire and Massachusetts project losses, due to challenges in areas dominated by small, high-cost operations.

The Southwest rounds out the regional overview with an average of $339 per cow. The region remains heavily influenced by large commercial operations, yet small herds continue to struggle, forecasting losses of $119 per cow. Arizona stands out with one of the highest profits nationally at $771 per cow, followed by California at $462. New Mexico again posts weak expectations at $34 per cow, while Texas anticipates modest gains of $153.

Across all regions, the message remains consistent. Larger herds significantly outperform smaller ones, with the largest operations often earning several hundred dollars more per cow than farms milking fewer than 250 cows. Differences in production efficiency, cost distribution, and basis management all reinforce the structural advantage of scale. As dairy producers prepare for 2026, the Zisk Report once again highlights both the opportunities and the growing divide across the industry.

Contraction Still a Long Way Off

Wed, 10 Dec 2025 18:22:52 GMT

With milk prices trending lower, dairy producers have yet to cull enough cows to stem the flow of milk. While culling has picked up, it could take a while for producers to respond more vigorously to the economic signals provided by low prices, said Sarina Sharp, analyst with the Daily Dairy Report.

“But eventually, they will. They always do,” Sharp said. “Recent expansions, low feed costs, record-high revenue provided from selling beef calves and cull cows, and risk management programs will likely slow the transition from expansion to contraction.”

Following 13 months of year-over-year deficits in the slaughter rate, U.S. dairy cow slaughter since mid-September has outpaced year-ago volumes. In the four weeks ending Nov. 22, dairy cow slaughter topped 2024 levels by 3.8%.

(Fran Howard)

“This significant shift has prompted industry participants to ask the billion-dollar question: when will low milk prices spur dairy producers to step up cull rates and restrain production? Slaughter data and anecdotal reports from dairy producers suggest that a meaningful decline in dairy cow head counts is still a long way off,” Sharp said. “The U.S. milk-cow herd is likely to remain large well into 2026, which suggests that low milk and dairy product prices will persist in the new year.”

Slaughter volumes now outpace prior-year levels, but they are still well below the historical average. In fall 2024, producers began to hold onto older cows, and now more than a year later, the dairy herd is significantly larger than it was a year ago.

(Fran Howard)

“With head counts at a three-decade high and comparisons being made to last year’s extremely low slaughter volumes, producers can send more cows to beef packers than they did last year while still keeping cull rates low enough to maintain or even expand the dairy herd,” she said. “Reports from some producers suggest that expansion continues.”

Encouraged by substantial recent investments in dairy processing capacity, some producers have built new facilities or have added to existing operations. And major expansions are still underway, Sharp said, suggesting that over the next few months, some operations will continue to add cows to fill new barns. It typically takes six months of negative on-farm margins to force industry contraction, she noted, and many producers are still cashing checks that are adequate.

USDA announced the November Class III price at $17.18/cwt., up 27 cents from October. That’s still above many producers’ cost of milk production, thanks to inexpensive feed and record-shattering beef revenue. Moreover, nearly half of U.S. milk output is shielded from disastrously low milk prices by the Dairy Revenue Protection and the Dairy Margin Coverage (DMC) programs.

“All this is not to say producers are flush,” Sharp said. “Those who earn Class IV revenue were surely disappointed to see Class IV milk at $14.30 in October and $13.89 in November. In the Pacific Northwest, where a group of producers has suffered steep discounts for much of the year, auctioneers have been busy selling livestock to producers in other states.”

Washington producers milked 21,000 fewer cows in October than in the same month in 2024. Over the same period, the milk herd in Idaho increased by 49,000 head, and the national dairy herd was 205,000 cows larger than it was in October 2024.

Future Dairy Outlook Points to Rising Production and New Price Pressures

Tue, 09 Dec 2025 15:38:51 GMT

The USDA released the U.S. Dairy Projections to 2035 last week, giving a picture of what they expect to come to all agriculture markets over the next 10 years, including dairy markets. While some markets have a lot to look forward to, it is clear that the world is changing and the United States’s dynamic with the world market may shift in the coming years.

In the last week, market bias has shifted somewhat, thinking the bottom is in or nearby, however it has been rough go for the American dairy farmer lately. Prices seem to be on a slippery slope downward with production numbers steadily climbing. Our farms have done an excellent job of improving efficiency, culling cows that are not the highest producers, taking advantage of high beef prices to shift their focus on marketing calves and overall making ends meet while prices continue to slip.

The problem is, when you are fighting to keep your head above water, it is way easier to keep trying when there is hope of a boat in sight and I’m not sure fundamentally we have that hope clearly spelled out in front of us yet. But, they say, the cure for low prices is low prices, and if last week’s market move is any indication, there are deals to be had in the cash market and bargain buyers are stepping in for more than Black Friday sales. Spot barrel buyers finally bought a load for the first time in four weeks, and while that seems like nothing to be excited about, it is finally a trade after a long drought.

Looking forward to the next 10 years, we start with the GDP to get us an idea of where the USDA thinks the economy is headed. While lower than the last 20 years, it is still expected to see a 0.4 annual percent increase in GDP here in the United States. The world is expected to see a 0.8 percent annual increase, also lower than previously seen since 2006. The highest GDP change is expected in Bangladesh with a 6.3 percent annual increase, although that increase has been steadily estimated at 6.2 percent annual increase since 2006.

For dairy, we see large increases in herd size, increasing 243,000 cows from 2025 to 2035, which is estimated to add 33.3 billion pounds higher milk production due to an increase in not only herd size, but also, 2,866 pounds more milk per cow. All is not lost though; the USDA has perfectly offset their higher production numbers with 33.3 billion pounds more marketings by 2035.

The total supply of milk is due to decrease overall with lower imports as the U.S. uses more of our own products with a 14.3-billion-pound increase in domestic demand and raise export expectations by 16.3 billion pound over the next 10 years.

As expected, prices should climb higher with this type of data. The USDA projects most dairy prices to climb with cheddar cheese 38 cents higher by 2035, Nonfat dry milk 31 cents more, and Dry Whey 13 cents higher. The only outlier in the projected 2035 prices is butter, seeing a 58-cent decline from 2025 to 2035. I can only assume that they anticipate the butterfat percentage in milk produced to continue to increase over the next 10 years at a higher rate than demand will increase.

Consumer demand is the key point in the prices above. With such a big increase in domestic demand, it is clear that the development of new products is an integral part to keep an engaged consumer, but advertising could be the key factor to help save butter. I noticed in the week 1 December Dairy Market News publication from the USDA, that butter is only 10% of the advertisements released and a disappointing 3% of the organic products ads.

When shaping the consumer opinion on products available, it seems like we have a lot of work to do if we do not want to see butter prices fall 20% or the projected 58 cents per pound the USDA is expecting over the next ten years.

Sarah Jungman is a commodity broker with AgMarket.Net and AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Sarah’s office is located in Winterset, Iowa and she may be reached at 515-272-5799 or through the website www.agmarket.net .

The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There is risk of loss in trading commodity futures and options on futures. It may not be suitable for everyone. This material has been prepared by an employee or agent of JSA and is in the nature of a solicitation. By accepting this communication, you acknowledge and agree that you are not, and will not rely solely on this communication for making trading decisions.

Milk Production Outweighs Demand

Thu, 13 Nov 2025 16:05:37 GMT

Demand has remained weak this fall, regardless of the approaching holidays. Retail and food service demand is behind the usual pace which alone has pressured cash prices. Exports are finding new avenues to ship U.S. Dairy products to despite the absent Chinese demand, but prices are struggling to find support with the growing supply chain.

On the Milk Production Report, the USDA showed a large increase in production from this time last year, up 4.2 percent from September 2024. The 24 major dairy producing states produced 18.3 billion pounds of milk which is a big increase from 2024, however less than August 2025’s revised 18.8 billion pounds.

In 2024, milk production spiked to these levels in the spring and then pulled back for the last seven months of the year, whereas 2025 has remained near the 2024 highs from March through August, having a slight pull back here in the September report data which came in 500 million pounds lighter than the previous month. In fact, the report called out the July-September production data was up 3.8 percent from the same period last year.

Production per cow is still 30 lbs higher than September 2024, but what is concerning from an oversupply standpoint is that the cow numbers are increasing as well. Nearly every month in 2025 the number of cows increased, whereas the number of cows in 2024 only had a slight increase over the course of the twelve months, but remained somewhat steady.

None of this bodes well for the outlook on milk prices without a shift in dairy product demand. But not all is lost. Last week, President Trump and President Xi sat down for a trade agreement discussion with promising remarks of a trade deal and expectations of a signed document as early as this week with detail of what agricultural products will be included. Either way, positive relations with China will help export demand.

Another positive note for commodities and consumer spending, in general, is that it appears a government budget will soon be passed to allow for the U.S. government to reopen. The stock market reacted positively Monday to the news. At the same time, President Trump made comments this weekend about using tariff proceeds to pay a balance to each American. If this should come to fruition, spending money much like the COVID stimulus package brought more consumer buying and increased inflation for prices, especially commodities.

Ag Secretary Rollins met with Mexico last week, keeping agricultural discussions going and brought speculation about timing of opening the border for cattle. This is a positive note as relations are improving with Mexico despite the halted trade discussions for the U.S. and Canada.

In conclusion, high milk production continues to pressure dairy prices but simple changes in consumer or export demand can make all the difference.

Sarah Jungman is a commodity broker with AgMarket.Net and AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Sarah’s office is located in Winterset, Iowa and she may be reached at 515-272-5799 or through the website www.agmarket.net .

The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There is risk of loss in trading commodity futures and options on futures. It may not be suitable for everyone. This material has been prepared by an employee or agent of JSA and is in the nature of a solicitation. By accepting this communication, you acknowledge and agree that you are not, and will not rely solely on this communication for making trading decisions

Mixed Signals Persist, But so Does Optimism

Tue, 19 Aug 2025 14:00:00 GMT

Despite ongoing geopolitical tensions, economic uncertainty, and escalating tariffs, the past several months has been reasonably profitable for U.S. dairy farmers. They continue to benefit from adequate milk prices, elevated non-milk revenue, and lower feed costs compared to recent years. Overseas, particularly in the EU and New Zealand, many dairy commodities have seen prices surge in recent months, with some products reaching multi-year highs in mid-Q2, followed by slight price easing at recent GDT auctions. While similar price behavior has not been observed in the U.S., most products have at least established a price floor, keeping milk prices above on-farm production costs. As long as demand holds in the coming months, RaboResearch remains optimistic about the near-term future of the dairy industry.

Recent milk production data suggests that farmers have responded swiftly to capitalize on positive margins. Production was up 1.6 percent year-over-year in both April and May, the strongest growth since 2021. A larger herd, combined with improved yields (with only one new avian influenza case reported in the past 30 days), has contributed to this output strength. Despite a tight supply of replacement animals and the continued financial appeal of breeding dairy cows to beef bulls, farmers have managed to expand herd sizes to take advantage of favorable margins. The USDA revised the April herd size data upward by 15,000 cows and reported an additional 5,000 head were added in May, resulting in a net increase of 20,000 animals. At 9.445 million head, the herd size is now at its highest level since July 2021. 2025 is expected to deliver the first full-year production growth since 2021, with RaboResearch projecting an output gain of 1.5 percent to 2 percent over 2024.

Trade remains a double-edged sword. While exports to Mexico thankfully continue to flow freely under the USMCA, tensions with China have negatively impacted sales. U.S. dairy products faced a 125 percent retaliatory tariff increase from April through mid-May. Although the tariff has since been eased, the threat of re-escalation remains. Shipments of lower-protein dry whey and permeate to China fell 40 percent year-over-year in April and were down 70 percent in May. As China is the top destination for these products, such significant declines could lead to weaker dry whey and Class III prices in the coming months.

Looking ahead, RaboResearch anticipates a softening in global prices as milk production increases in most key exporting regions and demand remains fragile. To some countries, exports in some products could remain elevated as the U.S. remains price competitive, especially in cheese and butter. While the U.S. dairy sector remains generally healthy, it must navigate a complex landscape of shifting trade policies, inflationary pressures, and evolving consumer behavior to ensure continued profitability for dairy farmers this year.

RaboResearch F&A North America provides dynamic insight and value to dairy industry members, and other Rabobank clients and stakeholders. Learn more about the research reports for a competitive edge here .

Cheese and Butter Lead Dairy Market Rebound as Futures Push Higher

Mon, 18 Aug 2025 21:14:30 GMT

The dairy complex was mostly green today as buyers stepped in to own. Spot cheese opened the week with a sharp reversal, bouncing back off last week’s drop. With multiple fundamental factors at play, the cash market is still working to establish where it belongs. Whey continued its recent strength, adding a half cent despite no trades. Class III futures started in positive territory and continued to push higher following the spot session. Butter also kicked off the week on a strong note after weeks of struggling to build momentum. Class IV futures managed modest gains, signaling some renewed support.

Today’s Highlights from Ever.Ag’s Know Your Markets

After ending last week with a tumble, CME cheese markets jumped today. Spot blocks climbed to $1.8300 per pound, 5.5 cents higher, while barrels tacked on three cents to close at $1.8100. Four lots of blocks and three of barrels traded. Spot butter also regained lost ground, up $0.0325 to $2.3325, with eight loads exchanged. While the spot NDM price was unchanged at $1.2700 per pound, a healthy 16 lots changed hands.
The September Class III contract leapt to $18.76 per hundredweight, a 42-cent gain, while Q4 rose to $18.20, adding 13 cents. September “all cheese” also advanced, up $0.0430 to $1.9080 per pound. Fourth quarter Class IV increased to $18.55 per hundredweight, a 20-cent bump.
US crop conditions remain very healthy. USDA rated 71% of the US corn crop in good or excellent condition as of August 17 compared to 72% last week and 61% on the five-year average. Soybeans were 68% good or excellent, unchanged on the week and ahead of the five-year average of 62%.

(Ever.Ag)

Spot Cheese Prices Dip Below Futures Amid Strong Demand and Tight Milk Supplies

Mon, 11 Aug 2025 21:20:50 GMT

Spot block prices moved to the highest price in two months. After accounting for NDPSR/CME basis, the futures market structure transitioned from a carry market to a discount market. After spending nearly two months in a carry structure, now that forward prices are at a discount, will more spot loads become available as carry buyers look to unwind product they previously carried against the forward curve? There are reports that domestic demand is improving, export strength is continuing, and seasonal milk flows are weakening. So, we may spend some time with an inverted curve.

Today’s Highlights from Ever.Ag’s Know Your Markets

CME butter lost a bit more ground today, slipping to $2.3400 per pound, 1.5 cents lower. A healthy 14 lots changed hands, the biggest single-day total in almost two months. Spot blocks didn’t move much, up a penny to $1.8600 per pound, with five lots exchanged. While barrels added just a quarter cent, the price reached $1.8000 for the first time since June. There were no trades. CME NDM dipped to $1.2575 per pound, shedding $0.0075, with seven loads exchanged.
Class IV contracts dropped, with September down 27 cents to $18.46 per hundredweight and Q4 at $18.66, a 13-cent loss. But Class III climbed through the end of 2025. September jumped to $18.87 per hundredweight, 25 cents higher, while Q4 advanced 12 cents to $18.43.
As of August 10, 72% of the US corn crop was in good or excellent condition, according to USDA. That compares to 73% last week and 63% on the five-year average. USDA rated 68% of the soybean crop as good or excellent, down from 69% last week, but ahead of the five-year average of 63%.

(Ever.Ag)

Ever.Ag - The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. The information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.

Cheese Prices Hit Two-Month High, but Class III Futures and Butter Slide

Fri, 08 Aug 2025 21:38:13 GMT

If you looked at the Class III futures market this afternoon, you probably wouldn’t have guessed that spot blocks reached a two-month high of $1.85 per pound today. Q4 Class III futures slipped to $18.31, off 28 cents per hundredweight. The Class IV space was under pressure too, with butter and powder both moving lower. Prices were red in the cattle markets too, with feeder cattle futures trading limit down today (-$9.25 per hundredweight) in the aftermath of new record highs yesterday.

Today’s Highlights from Ever.Ag’s Know Your Markets

Spot butter ended the week with another drop, closing down 4.5 cents at $2.3550 per pound, the lowest level since late May. One load changed hands. CME cheese markets continued to advance, with blocks up 2.5 cents to $1.8500 per pound and barrels rising to $1.7975, a quarter-cent gain. Three lots of blocks and zero of barrels traded. Spot dry whey gained another penny, closing at $0.5800 per pound, with six lots exchanged.
Strength in CME cheese didn’t carry over to futures markets. The biggest decline was in October Class III, down 37 cents to $18.37 per hundredweight. “All cheese” also declined, with the October contract slipping to $1.8740 per pound, $0.0390 lower.
Crop futures moved slightly lower today. September and December corn declined to $3.8275 and $4.0550 per bushel, losing $0.0175 and 1.5 cents, respectively. The August soybean contract dipped a nickel to $9.6675 per bushel, while November decreased to $9.8750 per bushel, easing by $0.0625.

(Ever.Ag)

Block Cheese Drives Class III Up as Butter Slides

Thu, 07 Aug 2025 21:43:19 GMT

Spot block cheese continued its push higher today, driving September Class III to the $18.70 range. Many believe July export numbers will continue June’s trend of historic strength, possibly leading the block price back to year-to-date highs. Butter, on the other hand, is seeing more weakness in the market. This is taking away the premium Class IV has held to Class III the last couple of months, bringing the prices closer to parity.

Today’s Highlights from Ever.Ag’s Know Your Markets

Spot butter continued its downward trend, shedding three cents to close at $2.4000 per pound, the lowest price since May. Three lots changed hands. NDM also eased, dipping to $1.2700 per pound, a penny lower, with three loads exchanged. CME cheese markets climbed again, with spot blocks up 2.5 cents to $1.8250 per pound and barrels rising to $1.7950 per pound, a half-cent gain. Five lots of blocks and three of barrels traded. Spot dry whey added a penny to close at $0.5700 per pound, with one load exchanged.

increased demand tightened supplies. USDA reported the spot price in the Midwest at a midpoint of $0.50 per hundredweight over class compared to -$0.50 last week, +$1.25 last year and -$2.00 on the five-year average. Cooling demand is offsetting any decreases in cream output. USDA pegged Class II multiples in the Central region at 126, down from last week’s 127, 140 in 2024 and 138 on the five-year average.

Slaughter rates picked up slightly for the week ending July 26, totaling 51,400 head, up 0.4% on the year. While culling slowed down in the West (-26.7%) and Mid-Atlantic (-13.4%), numbers climbed in the South (+23.3%), Northwest (+14.3%) and Midwest (+16.2%).

(Ever.Ag)

Dairy Futures Hold Ground as Spot Cheese Eases; Feeder Cattle, Corn See Big Moves

Wed, 06 Aug 2025 21:19:55 GMT

After an explosive start to the week, the spot cheese market cooled off this morning. Class III futures have seen strong upside over the past few days, particularly in the front months of September and October 2025. Despite the lack of upside in the spot market, nearby Class III managed to climb back from trading lower on the day. This came in the face of 10-cents-per-pound premiums in nearby futures contracts, which suggest we have the potential for more strength out of the cash market (or at the very least the reported price in the NDPSR). Something else on the radar: feeder cattle. The September 2025 contract closed at all-time record highs again today, and the momentum points to higher yet. In the corn market, the December 2025 contract took a stab at breaking below $4.00 per bushel. That price didn’t hold as the contract rebounded to settle at $4.02.

Today’s Highlights from Ever.Ag’s Know Your Markets

There wasn’t much action in Chicago today. Spot blocks made the biggest move, down a penny to $2.4300 per pound, with five lots changing hands. The only other movement was in spot blocks, which dipped to $1.8000 per pound, a quarter-cent loss.
There weren’t any major moves in futures, either. September Class III advanced to $18.43 per hundredweight, tacking on six cents. Fourth quarter Class IV slipped to $19.22 per hundredweight, shedding 19 cents.
US NDM remains the most expensive globally, but the margin is still narrow. The CME NDM average for the week so far sits at $1.28 per pound compared to $1.27 in New Zealand and $1.25 in Europe. Even with this week’s increase in CME cheese, the US average of $1.80 per pound remains well below New Zealand’s $2.08 and Europe’s $2.34. US butter dipped to $2.44 per pound, while New Zealand declined to $3.19 and EU rose to $3.65.

(Ever.Ag)

Cheese Prices Climb to Six-Week Highs as Exports Hit Records

Tue, 05 Aug 2025 21:58:59 GMT

It only took seven sessions for CME spot blocks to jump 16 cents. Spot prices landed today at the highest level since mid-June and closer to the top end of the recent $1.60-$1.90 trading range. Cheese futures moved mostly higher but seemed to brush off some of the spot market strength. Exports continue to support prices, with the US remaining the cheapest cheese in the world and reaching record highs in June. At the same time, export competitiveness likely caps how high spot prices can run in the near term.

Today’s Highlights from Ever.Ag’s Know Your Markets

CME cheese markets climbed to levels last seen in June following the news of healthy export numbers. Spot blocks advanced to $1.8025 per pound, up $0.0225, while barrels jumped four cents to $1.7900. Five lots of blocks changed hands. Butter gave up some of yesterday’s gains, down $0.0225 to $2.4400 per pound, with three loads exchanged. Spot NDM shed a half cent to close at $1.2800 per pound. At today’s GlobalDairyTrade auction, milk powders went in the opposite direction. SMP ticked up 0.7% to $1.27 per pound and WMP climbed 2.1% to $1.82.
Competitive global pricing continued to drive US cheese and butter exports in June. Outbound cheese volume hit a new record high of 115.1 million pounds, up 34% year-over-year. Butter exports totaled 14.1 million pounds, 100% higher versus 2024. While dry whey also climbed (up 20% to 38.3 million pounds), NDM+SMP volume slipped to 131.1 million pounds, down 2% on the year.
According to USDA’s June Dairy Products report, combined NDM+SMP production totaled 193.7 million pounds, down 1.4% (-2.7 million pounds) year-over-year. Cheese and butter output surpassed prior-year levels. Total cheese production reached 1.203 billion pounds, up 4.2% (+48.4 million pounds), while butter totaled 185.5 million pounds, up 10.4% (+17.5 million pounds).

(Ever.Ag)

Cheese Prices Rally, Driving Class III Futures Higher Ahead of Key Trade Report

Mon, 04 Aug 2025 20:53:04 GMT

Last week, spot cheese began showing signs of strength. Today, it built on that momentum, with both blocks and barrels jumping higher. This surge is encouraging news for traders expecting a convergence between US and international cheese prices. Class III futures opened the day relatively flat, but after the spot cheese session, front-month contracts rallied, climbing as much as 40 cents. Butter also posted gains, but the powder market was mixed. With today’s momentum and tomorrow’s June trade data report, how much higher will prices go before they curtail demand?

Today’s Highlights from Ever.Ag’s Know Your Markets

CME cheese markets started the week jumping to the highest prices since June. Spot blocks climbed 7.5 cents to $1.7800 per pound, while barrels advanced to $1.7500, a four-cent gain. One lot of blocks and zero of barrels traded. Spot butter also rose, up $0.0175 to $2.4625 per pound, with five loads exchanged.
The increase in spot cheese carried over to the futures market. The September Class III contract shot up 37 cents to $18.11 per hundredweight, while Q4 futures leapt to $18.41, 26 cents higher. “All cheese” futures also gained ground, with Q4 tacking on 3.5 cents to settle at $1.8907 per pound.
As of August 3, 73% of the US corn crop was rated good or excellent, unchanged on the week and well ahead of 63% on the five-year average. USDA pegged the soybean crop at 69% good or excellent, down slightly from 70% last week, but up from 62% on the five-year average.

(Ever.Ag)

Cheese Prices Break $1.70, Boosting Nearby Futures as 2026 Contracts Slide

Fri, 01 Aug 2025 21:47:23 GMT

Cheese prices continued to firm heading into the weekend. Blocks climbed above the $1.70 mark for the first time in a month, capping off a week of consistent activity and strength building day by day. Nearby Class III futures followed higher, with September up more than 40 cents compared to Wednesday’s low. But, 2026 futures didn’t fare as well, with January – June contracts slipping six cents to $17.78 per hundredweight, the lowest level since April.

Today’s Highlights from Ever.Ag’s Know Your Markets

CME cheese markets jumped back over the $1.70-per-pound mark. Spot blocks closed at $1.7050 per pound, $0.0225 higher, while barrels gained three cents to settle at $1.7100 per pound. Nine lots of blocks and five of barrels changed hands. The CME butter market slipped to $2.4450 per pound, losing $0.0275, with two loads trading. Spot dry whey climbed to $0.5500 per pound, adding $0.0175, with five lots exchanged.
Futures were relatively quiet today. The September Class III contract rose 14 cents to $17.74 per hundredweight. There wasn’t much movement in “all cheese” contracts, with September ticking up to $1.8240 per pound, gaining $0.0090.
The US job market showed signs of weakness in the latest Labor Department report. Employers added 73,000 new jobs in July, far below expectations. The Labor Department also cut May and June payroll numbers by a combined 258,000 jobs. The unemployment rate ticked up to 4.2% from 4.1% in June.

Spot Cheese Holds Firm as Futures Trade Higher, August-September Spread Drives Volume

Thu, 31 Jul 2025 22:11:08 GMT

Spot cheese continues to feel supported in the $1.60s and futures are still trading at a premium to current spot price. Given the time of year, it feels like spot may go test the $1.75-$1.80 level soon, even with last week’s bearish Milk Productionreport. The Class III August-September spread continues to be the driving force of volume, with over 665 loads traded. Open interest volume is telling us short positions are getting rolled from August to September.

Today’s Highlights from Ever.Ag’s Know Your Markets

There wasn’t much action in Chicago today. The only price movement was in spot blocks, which gained a penny and closed at $1.6825 per pound. Spot NDM saw the only trades, with two lots changing hands.
Spot milk prices dipped lower again. USDA pegged prices in the Midwest at a midpoint of $0.50 per hundredweight under class, down from “flat class” last week and +$0.75 last year, but up from -$2.20 on the five-year average. Class II multiples in the Central region declined to 127 compared to 129 last week, 134 last year and 136 on the five-year average.
For the week ending July 19, dairy cow slaughter totaled 51,100 cows, down 2.1% year-over-year. West (-26.2%) and Mid-Atlantic (-14.3%) logged decreases, while culling rates increased in the South (+44.8%), Northwest (+12.5%) and Midwest (+5.1%).

Cheese Stocks Pressure Futures as Spot Volume Climbs; Butter Prices and Contracts Slide Further

Wed, 30 Jul 2025 21:49:58 GMT

The build up of cheese reported in the June Cold Storage report is certainly making itself known. Spot block cheddar showed up for sale again today, with another large trading volume of 15 lots. The spot price was relatively steady, but the heavy volume sent cheese futures through November slipping lower. Butter experienced a sell off, as spot values came lower and futures sold off an equal or greater amount. Butter has yet to rally off of last week’s more bullish Cold Storagenumbers. Live and feeder cattle continue to make new highs off of the bullish Cattle on Feed report.

Today’s Highlights from Ever.Ag’s Know Your Markets

It was another busy trading day for CME blocks. While the price only rose a half cent to $1.6725 per pound, a healthy 15 loads changed hands. Barrels jumped to $1.6800 per pound, tacking on 4.5 cents, with no trades. Spot butter dropped back below the $2.50-per-pound mark, down three cents to $2.4725, with four loads exchanged.
Class III dropped again, with September down 19 cents to $17.33 per hundredweight and Q4 11 cents lower at $18.03. It was a similar story in Class IV. The September contract tumbled 18 cents to $19.10 per hundredweight, while Q4 settled at $19.46, shedding seven cents.
US milk powder remains slightly more expensive on the global marketplace. The CME NDM average sits at $1.29 per pound compared to New Zealand’s $1.26 and EU’s $1.22. The US cheese average of $1.67 per pound is still well below $2.08 in New Zealand and $2.35 in Europe. The gap in butter also remains, with the US at $2.49 per pound, New Zealand at $3.32 and the EU at $3.64.

September Milk Futures Take a Sharp Slide as Spot Trading Surges

Tue, 29 Jul 2025 20:52:40 GMT

Trading action picked up in the CME spot block auction today, but prices failed to budge. Thirteen lots changed hands – the most in over a week – as sell-side activity picked up. Buyers seemed eager to grab additional volume as a strong cash-and-carry remains. With US prices still globally competitive, there still appears to be opportunity in the international markets as well. Grain markets moved another leg lower today, with December corn prices flirting with life-of-contract lows near $4.11 per bushel, while December soybean meal pushed to new lows near $276 per ton.

Today’s Highlights from Ever.Ag’s Know Your Markets

While spot blocks were unchanged at $1.6675 per pound, volume was heavy at 13 loads. Barrels gained a penny to close at $1.6350 per pound, with zero lots exchanged. The CME NDM market slipped to $1.2850 per pound, losing $0.0075, with two loads trading. Spot butter ticked up just a quarter cent to $2.5025 per pound. Three lots changed hands.
After jumping yesterday, Class III futures slipped. The September contract dropped to $17.52 per hundredweight, shedding 27 cents, while Q4 declined to $18.14, a 14-cent loss. “All cheese” also moved lower through the rest of 2025, with the biggest move in September, down 2.5 cents to $1.8030 per pound.
At this week’s GlobalDairyTrade Pulse, SMP closed at $1.28 per pound, down 1.0% on a Pulse-to-Pulse basis, but up 0.9% versus the previous main auction. WMP advanced to $1.80 per pound, 0.5% higher compared to the most recent Pulse and +2.1% from the latest main event.

Butter Leads Dairy Market Gains After Bullish Cold Storage Report

Mon, 28 Jul 2025 21:33:03 GMT

The CME dairy market kicked off the week reacting to Friday’s post-close release of the June Cold Storage report. Butter futures climbed steadily throughout Monday, largely driven by lower-than-expected storage figures. The sharper-than-usual decline from May to June added bullish momentum, suggesting tighter supply. Meanwhile, Class III and cheese futures had a volatile session. Prices opened higher, dipped just before the cash session, then rebounded after spot cheese rose. Despite cheese inventories coming in above expectations, Class III and cheese also ended the day higher.

Today’s Highlights from Ever.Ag’s Know Your Markets

Spot butter started the week after USDA’s bullish June Cold Storage report by gaining 3.5 cents and closing at $2.5000 per pound. Two lots changed hands. The same report’s bearish cheese data didn’t have the same impact on CME cheddar. Spot blocks climbed to $1.6675 per pound, adding $0.0275, with one lot trading. Barrels were quiet, with no price movement and no trades. NDM ticked up a half cent to $1.2925 per pound, with no lots exchanged.
Class III futures advanced, with the September contract up 24 cents to $17.79 per hundredweight and Q4 settling a dime higher at $18.28. Class IV also got a bump with the rise in CME butter. Q4 jumped to $19.57 per hundredweight, a 19-cent gain.
US crops remain in positive shape according to USDA’s Crop Progress report. As of July 27, 73% of the US corn crop was in good or excellent condition compared to 74% last week and 63% on the five-year average. The soybean crop was 70% good or excellent, up from 68% last week and the five-year average of 62%.

Butter Rebounds on Cold Storage Report as Cheese Markets Drift Lower

Fri, 25 Jul 2025 21:31:16 GMT

It was a relatively quiet week in the spot cheese market. Blocks traded within just a half-cent price range this week, the narrowest band in a year. Class III futures closed mixed today, though prices settled lower on the week. Class IV futures were steady to higher, boosted by an uptick in butter prices. Butter buyers seemed eager to find product today, with spot prices bouncing off the two-month low posted earlier this week. USDA released the latest Cold Storage report this afternoon after futures markets were closed, so those results will likely set the tone for trading next week.

Today’s Highlights from Ever.Ag’s Know Your Markets

Spot butter ended the week by jumping 4.5 cents to $2.4650 per pound, with two lots exchanged. After sitting unchanged all week, barrels shed 3.5 cents to close at $1.6250 per pound. Spot blocks dipped to $1.6400 per pound, a half cent lower. Eight lots of blocks and seven of barrels traded, the lowest total volume since mid-February. Spot dry regained some lost ground, rising to $0.5400 per pound, 1.5 cents higher. Six lots changed hands.
USDA’s June Cold Storage report leaned bullish for butter, with stocks dropping to 354 million pounds, down 5.9% on the year and -2.8% month-over-month – twice the average May-to-June decline. Cheese was bearish. Total cheese inventories reached 1.412 billion pounds, down 0.4% year-over-year, but up 0.2% month-over-month at a time when stocks usually decline on a monthly basis.
According to USDA’s July Cattle report, the number of dairy cows for heifer replacement was roughly unchanged versus July 2023 (there was no July report last year). The heifer-to-cow ratio was also unchanged at 45%.

Bearish Milk Production Report Pressures Class III Futures and Butter Markets

Wed, 23 Jul 2025 21:33:54 GMT

The big story out in the world and in the futures market today was yesterday’s Milk Production report, with June production up 3.3% on the year. We saw aggressive selling yesterday post-report and post-settlement. That selling returned and persisted through today’s cash session.

The aggressive selling in Class III futures held in the August and September contracts, with prices trading around 50 cents lower on strong volumes (600+ contracts in each month). The spot butter session is finding some footing below $2.50 per pound. Multiple sellers surfaced at the CME today, with the price dropping on only a handful of trades. Butter futures, like Class III, saw aggressive selling early on before the start of the cash session. Despite the selling in futures and lack of activity in spot blocks, there is still a healthy carry structure built into the cheese futures market, with nearly every contract trading over $1.80. Butter futures are in the same boat with most contracts trading on average around $2.60, at a premium of nearly 20 cents per pound compared to the cash market.

Today’s Highlights from Ever.Ag’s Know Your Markets

Yesterday’s bearish Milk Production report seemingly gave more fuel to CME butter’s decline. The spot price tumbled $0.0575 to $2.4200 per pound, the lowest level since May. Three lots changed hands. Spot NDM also dropped, down $0.0225 to $1.2800 per pound, with four loads exchanged. Spot dry whey continued to ease, down a penny to $0.5375 per pound, with zero loads trading. CME cheese markets were unchanged with no trades for the third day in a row.
Higher milk flows and lower CME spot prices sent futures falling. The September Class III contract took the biggest hit, sliding to $17.39 per hundredweight, a 66-cent loss. Q4 futures settled at $18.12, down 35 cents. Q4 Class IV futures also shed 35 cents and settled at $19.37 per hundredweight.
US NDM is pulling further ahead of global milk powder prices, with the week’s CME average rising to $1.29 per pound compared to $1.26 in New Zealand and $1.25 in Europe. The US cheese average price of $1.67 per pound remains far below New Zealand’s $2.08 and EU’s $2.40. US butter sits at $2.47 per pound, a steep discount to $3.32 in New Zealand and $3.83 in Europe.

Milk Output Surges Past Expectations as Butter Prices Slide, 2025 Futures Rally on Export Strength

Tue, 22 Jul 2025 21:16:35 GMT

Markets were in a waiting mode today, anticipating USDA’s June Milk Production report and expecting 2.0-2.5% growth. Futures seemed to take a breather, with not much price or trading action leading up to the report. Spot butter continued the slide lower amid below-average cream prices and expectations for significant milk production increases. Despite the lower spot action in butter, futures rallied in 2025 to expand the premium to spot as the active export market keeps demand historically high.

Today’s Highlights from Ever.Ag’s Know Your Markets

The CME butter market dropped again, closing at $2.4775 per pound, a loss of $0.0225. Five lots changed hands. Spot dry whey slipped to $0.5475 per pound, 1.5 cents lower, with one lot exchanged. Spot NDM ticked up just a quarter cent to $1.3025 per pound, while CME cheese markets were unchanged for the second day in a row.
According to USDA’s June Milk Production report, US milk output jumped 3.3% year-over-year, ahead of expectations and the biggest yearly increase since 2021. After struggling with HPAI, California returned to growth, with production up 2.7% versus 2024. USDA also revised the May data, showing production up 2.3% on the year versus +1.6% in the previous report.
Milk powder prices rose again at this week’s GlobalDairyTrade Pulse event. WMP advanced to $1.79 per pound, up 1.5% versus the latest main auction, while SMP rose to $1.30 per pound, 2.0% higher compared to last week’s GDT.

Butter Prices Slip, Dairy Markets Brace for Milk Production Data

Mon, 21 Jul 2025 21:47:45 GMT

Most of today’s CME action was in butter and NDM. Butter futures eased but maintained their premium to spot, which also took another step down. Meanwhile, NDM found plenty of buying interest, trading eight truckloads. Class III futures moved lower, with no clear direction from today’s spot auction. Tomorrow brings USDA’s June Milk Production report, which could drive the market through the rest of the week.

Today’s Highlights from Ever.Ag’s Know Your Markets

Spot NDM gained a penny, reaching the $1.30-per-pound mark for the first time since February. Eight lots changed hands. The CME butter market slipped to $2.5000 per pound, $0.0125 lower, with four lots exchanged. Spot dry whey ticked up a half cent to $0.5625 per pound. Blocks and barrels were unchanged at $1.6425 and $1.6600 per pound, respectively, with no trades.
Futures markets didn’t see any big fireworks today. The August Class III contract dropped to $17.63 per hundredweight, a 14-cent loss, while August “all cheese” declined $0.0180 to $1.7980 per pound. Butter contracts also dipped. August futures closed at $2.5695 per pound, down $0.0140, and Q4 settled at $2.6449 per pound, shedding $0.0074.
USDA pegged the US corn crop at 74% good or excellent, unchanged on the week and ahead of the five-year average of 64%. The soybean crop was 68% good or excellent, down slightly from 70% last week but still above 61% on the five-year average.

Butter Prices Slide to One-Month Low

Fri, 18 Jul 2025 21:15:39 GMT

Consistent sell-side pressure kept gains limited in cheese markets, but after a week of holding in the low-$1.60s and with this much volume changing hands, there’s a case building for some spot market upside in the months ahead as demand strengthens seasonally. Butter dropped to the lowest level in a month. Similarly, second half butter futures closed at $2.6243, the lowest since May. Nearby Class IV futures continue to trade at a steady premium to the complex but need some fundamental support to keep pushing higher. With butter export interest still alive and a heavy demand stretch ahead, there’s still reason to remain optimistic about the Class IV space as we move through the back half of summer.

Today’s Highlights from Ever.Ag’s Know Your Markets

Spot butter ended the week with another decline, losing $0.0175 to close at $2.5125 per pound. No lots traded, bringing the full-week total to seven loads, the smallest weekly volume since early July 2024. Spot blocks rose a quarter cent to $1.6425 per pound, while barrels advanced to $1.6600 per pound, a penny higher. Fourteen loads of blocks and one of barrels changed hands. Spot dry whey shed 1.5 cents and settled at $0.5575 per pound, with five lots exchanged.
Butter contracts were consistently in the red through the rest of 2025. Q4 dropped to $2.6523 per pound, shedding $0.0360. Class III futures were mixed, with August up a nickel to $17.77 per hundredweight and September down four cents to $18.23.
After tumbling last week, crop futures ended Friday with a jump higher. September corn closed at $4.0750 per bushel, up 6.5 cents on the day and +11.5 cents versus last week. August soybeans settled at $10.2775 per bushel, $0.0625 higher on the day and +23.5 cents week-over-week.

Cheese Futures Hold Firm, Butter Remains Under Pressure

Thu, 17 Jul 2025 21:29:38 GMT

Spot cheese feels like it has bottomed out, with futures continuing to hold a considerable premium. The last two NDPSR reports have shown extremely high premiums compared to spot. Nonfat futures have started to show a bit of life, getting bid off this week’s GDT event. Reports of slower seasonal powder production are emerging, likely offering support. Spot butter has failed to find any meaningful bids heading into the late summer months, leaving futures with the only option to sell off the premium they have been trading out on the curve.

Today’s Highlights from Ever.Ag’s Know Your Markets

Spot blocks regained a little lost ground, rising to $1.6400 per pound, a 1.5-cent gain. A healthy 11 loads changed hands. Spot NDM also ticked up, adding a penny to close at $1.2900 per pound, the highest price since February. Twelve lots traded. Barrels, butter and dry whey were unchanged.
After shooting higher last week, spot milk prices slipped as temperatures moderated in the Midwest. USDA pegged spot milk in the region at a midpoint of $0.50 per hundredweight under class compared to +$1.00 last week, +$0.25 last year and -$2.70 on the five-year average. Cream is tightening seasonally, with USDA reporting Class II multiples in the Central region at 128. That compares to 125 last week, 133 last year and 134 on the five-year average.
Consumer spending was stronger than expected in June, with retail sales totaling $720.1 billion, up 0.6% month-over-month and +3.9% on the year. That compares to an inflation rate of +0.3% and +2.7%. Grocery sales rose 0.5% on the month and +2.7% versus 2024, ahead of the Food-at-Home inflation rate of +0.2% and +2.4%. Restaurant spending climbed 0.6% and +6.6%, both also ahead of the June inflation rate of +0.4% on the month and +3.8% year-over-year.