The USDA released the February Milk Production report shortly after my last article, showing much of the same numbers as expected. Milk production in the United States is higher compared to a year ago, coming in at 18.3 million pounds, that is 2.9% higher than February 2025. However, that is 595 million pounds lower than the January report.
Milk cow numbers also increased from 2025, to 9.615 million cows, that is 204,000 cows more than a year ago. What did change in February is production per cow decreased 168 lbs., the lowest production per cow we’ve seen in a year.
Class IV milk has been steadily increasing in prices for the last 45 days due to strength in the butter and powder markets. Butter continues to see support from the strong export market as well as Easter season demand, but the Cold Storage Report showed an increase in inventory. Butter inventory is 253.8 million lbs., an increase of 27 million lbs. from last month, however still 17% from a year ago.
Cream supplies have gotten tighter than expected but not enough to bring a big influx of buying the cash market. Milk components have declined but still higher than last year and with spring flush around the corner, they have not gotten in a hurry to secure supply, leading to some weakness in the market.
There is a lot of talk about export demand facing its own set of challenges. With fuel and energy prices rallying, the cost of commodities and moving products could be concerning for world demand. Insurance costs of ships, fuel to move products are on the forefront of fears, however it goes deeper than that with concerns over the availability of the petroleum products to make the plastic containers for dairy products.
Some exports fear that even if the Strait of Hormuz gets back to business-as-usual today, should the conflict be resolved, we could still cause issues for months to come with the disruption in the supply chain. Between fuel cost, insurance costs, energy costs, or something as small as a container shortage, there are a lot of unknowns the dairy market has yet to face.
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.
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