Markets - General

Replacement Cow Prices Hit Records, Heifer and Beef-on-Dairy Calf Values Stay Strong

Thu, 14 May 2026 16:40:13 GMT

Replacement cattle prices continue running at historically strong levels as dairy producers continue paying premium prices cross the market. From replacement cows to springing heifers and beef-on-dairy calves, values remain well above year-ago levels across much of the country.

Replacement Milk Cow Prices Hit Records

Milk cow prices continued climbing in April 2026, according to the latest USDA estimates. The national average price for milk cows sold for dairy herd replacement reached $3,130 per head, up from $2,980 in January and $2,860 one year earlier.

Several major dairy states posted even stronger numbers. Michigan averaged $3,360 per head, Wisconsin reached $3,320 and Iowa climbed to $3,300. Minnesota, Colorado, Florida and Vermont all landed near $3,200 per head.

State	April 2025	January 2026	April 2026
Arizona	2,900	$,200	3,400
California	2,700	2,800	3,000
Colorado	2,700	3,000	3,200
Florida	2,900	3,100	3,200
Georgia	2,730	2,990	3,090
Idaho	2,850	2,900	3,150
Illinois	2,730	2,930	3,050
Indiana	2,880	3,040	3,080
Iowa	2,960	3,150	3,300
Kansas	2,550	2,900	3,040
Michigan	3,070	3,220	3,360
Minnesota	2,810	3,050	3,200
New Mexico	2,500	2,800	2,950
New York	3,050	3,080	3,130
Ohio	2,930	3,040	3,070
Oregon	2,900	2,900	3,100
Pennsylvania	2,860	2,980	3,040
South Dakota	2,600	2,840	3,000
Texas	2,800	2,850	3,000
Utah	2,600	2,700	3,000
Vermont	2,970	3,100	3,200
Virginia	2,760	2,950	3,090
Washington	2,900	2,750	2,950
Wisconsin	3,130	3,170	3,320
U.S.	2,860	2,860	3,130

The strong market reflects ongoing pressure on replacement supplies. As more dairy producers breed cows to beef genetics, fewer traditional dairy replacements are entering the pipeline, making quality milk cows harder to find.

Heifer Prices Remain Strong

Replacement dairy heifer prices continue to run at historically strong levels, although some markets are beginning to show signs of leveling after the rapid climb seen over the past year. Top quality Holstein springers are regularly bringing between $3,500 and $4,400 per head, with many sales topping the $4,000 mark.

Withee, Wis. - May 6, 2026

Heifer Category	Weight / Type	Price Range ($)
Top Quality Springing Heifers	—	3,500 – 4,400
Common Springing Heifers	—	3,475 and Down
Holstein Short Bred Heifers	—	2,250 – 3,500
Holstein Open Heifers	300# – 500#	1,250 – 2,200
Holstein Open Heifers	500# – 700#	1,500 – 2,375
Holstein Open Heifers	700# – 850#	1,750 – 2,500

Medium quality springers are commonly selling from around $3,000 to $3,500, while short bred heifers continue bringing strong prices depending on quality and stage of pregnancy.

Turlock, Calif. - May 8, 2026

Category	Price Range ($)
Top-Quality Holstein Springers	3,600 – 4,300
Medium-Quality Holstein Springers	2,950 – 3,500

Open Holstein heifers are also selling at levels well above historical averages. Larger heifers nearing breeding age have reached as much as $2,500 per head in recent sales. While some markets have started to level after the sharp run higher over the past year, demand for replacement heifers remains aggressive in many regions.

Pipestone, Minn. - April 16, 2026

Category	Price Range ($)
Top Springing Heifer	4,250
Top 10 Springers	4,250
Top 25 Springers	4,200 – 4,250
Top 50 Springers	4,135 – 4,250
Top 100 Springers	4,100 – 4,250
Top 150 Springers	3,975 – 4,250
Top 200 Springers	3,500 – 4,250

Beef-on-Dairy Calf Prices Continue to Climb

Beef-on-dairy calves continue to generate strong interest from calf growers and feeders, helping support high prices across multiple weight classes. Recent sales showed beef-cross calves bringing between $17 and more than $23 per pound on a liveweight basis.

Cherry Creek, N.Y. - April 22, 2026

Calves	Low Price per lb. ($)	High Price per lb. ($)
Heifer Calves	8.2	10
Grower: Over 92#	13	15.2
Grower: 80# to 92#	13	16.5
Beef-Type Calves	17	23.2

Prices for older beef-on-dairy feeder cattle also remain strong, with several weight groups of heifers and steers bringing solid values in recent sales.

Turlock, Calif. - May 8, 2026

Weight Range (lb.)	Heifers Price Range ($)	Steers Price Range ($)
300 - 399	NO TEST	NO TEST
400 - 499	360.00 - 400.00	375.00 - 400.00
500 - 599	345.00 - 385.00	350.00 - 375.00
600 - 699	NO TEST	NO TEST
700 - 799	NO TEST	NO TEST
800 - 899	235.00 - 297.50	NO TEST

Market Shows No Sign of Easing

Replacement cattle prices are holding at strong levels across milk cows, heifers and beef-on-dairy calves, and most producers are still having to pay up to secure the animals they want. Beef-on-dairy calves remain a bright spot for many dairies, but that same trend keeps pulling more animals out of the dairy replacement pipeline, which adds pressure on heifer availability. With supplies still tight and demand steady across all classes of cattle, there is little indication replacement costs will ease anytime soon.

Dairy Faces a “Very Weird Situation,” Forcing Farmers to Rethink Revenue

Thu, 12 Feb 2026 17:27:19 GMT

Dairy farmers are standing on shaky ground. Milk checks are tight and input costs are up, but replacement heifers and beef-on-dairy calves are providing an unusually strong backstop. As Gregg Doud, president and CEO of the National Milk Producers Federation, puts it, dairy is in a “very weird situation” right now.

Beef-on-Dairy Helps Pay the Bills

With today’s market conditions, many dairy farmers are finding that the most valuable part of their operation is not in the parlor, but in the maternity pen.

“The milk check is not much,” Doud told “AgriTalk” host Chip Flory during Farm Journal’s 2026 Top Producer Summit. “But those calves are worth so much.”

In some regions, that beef-on-dairy value is staggering.

“The latest number I heard in the Northeast recently, a black day-old calf [is worth] $1,600,” Doud adds. “You talk to [dairy farmers] and they say, ‘We’re in the beef business now.’”

At a time when the milk check alone is not enough to carry the operation, beef-on-dairy has become a financial lifeline that is helping many farms stay profitable.

“Beef-on-dairy doesn’t have 100% penetration into the industry, but it’s close,” Doud says. “I would say it’s over 75% at this point.”

This shift is reshaping how farmers think about cow value, reproductive decisions and even culling strategies. A cow is no longer evaluated only on her milk production or longevity, but on the value of the calf she is carrying.

“If a cow is pregnant, she’s staying,” Doud adds. “The calves are worth too much to ignore.”

Fewer Replacements

That shift, however, comes with consequences for the future makeup of the herd.

With so many breedings going to beef, Doud says the number of replacement dairy heifers in the industry has dropped to levels that are noticeably short.

“The number of replacement dairy heifers is way below what it ought to be,” he says. “So, this is going to be interesting, and there could be a big swing in cow numbers at some point here.”

Doud notes the current reduction in replacement heifers is something the industry is watching closely.

Risk Management Remains Essential

As producers navigate all the shifting pieces in today’s market, Doud draws a firm line on risk management. In a margin environment like this, Dairy Margin Coverage (DMC) and Dairy Revenue Protection (DRP) are not optional tools in his mind. They are essential.

“The Dairy Margin Coverage program for dairy is something that I think everybody in agriculture needs to look at,” he says. “It kicks in when you need it.”

Although DMC has limits on how much milk can be covered at the highest level, Doud notes it still works well for most dairies. He follows that point with strong encouragement for producers to also consider DRP, explaining it offers another way to safeguard milk income by allowing farms to insure a portion of their future revenue against market swings.

“Every dairy farmer in America, my goodness, if you are not signed up for DMC and also DRP on the insurance side of the equation, get signed up for these things,” he adds.

In his view, these tools were designed specifically for moments like this, when margins are thin and markets are unpredictable.

Cautious Optimism in an Uncertain Market

Looking ahead, Doud acknowledges milk checks are likely to remain tight, but the value of beef-on-dairy calves is helping farms navigate a difficult margin environment.

With additional dairy processing capacity coming online and continued demand for protein, he is hopeful milk prices will improve. In the meantime, he views risk management tools and beef-on-dairy breeding decisions as practical safeguards for producers working through challenging market conditions.

Supply Could Overwhelm Demand in Early 2026

Tue, 20 Jan 2026 20:00:00 GMT

Unfortunately for dairy producers, the glut of milk both in the United States and globally is expected to persist into 2026, which means milk prices will likely remain low or slide further at least for first half of the year. However, dairy demand could expand, offering a glimmer of hope for prices.

According to Betty Berning, analyst with the Daily Dairy Report, the bulls ruled the first part of 2025, while the bears closed out the year. “One of the themes of 2025 was the increased volume of milkfat in the United States, which led to multi-year low butter prices,” she said. “Butter churns ran hard due to heavy cream supplies and weaker demand for other fat-heavy products, including ice cream and cream cheese.”

(Fran Howard)

Through November, U.S. dairy cows produced more than 9.1 billion pounds of butterfat, the most ever for the period, and 4.7% more than in the first 11 months of 2024, when adjusted for leap year. Butter production in the first 10 months of this year was nearly 2 billion pounds, another record high and 6.9% more than in the same period in 2024. This led to a massive selloff in the butter market, with prices plummeting more than $1/lb. from their peak of $2.62 set in early July to their late-December low of $1.385/lb.

“Processing capacity was also the talk of the industry, as new cheese plants roared into action,” Berning said. “Most of the new cheesemaking facilities came online in the Central Plains, which pushed output to record levels in the region.”

For the January through October period, more than 6.1 billion pounds of cheese were produced in the Central Plains, up more than 5% from the same period in 2024. As these facilities move beyond the ramp-up phase, Berning noted that even more cheese will be produced in early 2026.

“While cheese exports grew and set multiple records in 2025, absorbing some of this new production, strong export sales will also be needed in 2026 to keep cheese from piling up and prices from falling further,” Berning noted. “In addition, the huge discount that U.S. cheese offered relative to the prices extended by other dairy exporters made it the product of choice for international buyers, boosting U.S. cheese exports. This price advantage will need to be maintained in 2026 for the United States to continue to move large volumes of cheese abroad.”

In the protein space, production of whey protein concentrates and whey protein isolates also set record highs, yet despite growing volumes, prices headed to new high-water marks on relentless demand, which is expected to continue through 2026. Cottage cheese, another protein-heavy dairy favorite, grew to nearly 1.2 billion pounds for the first 10 months of the year, the highest level since 1989.

“Heavy protein demand pushed dry whey prices to more than 70¢ per pound starting in late October, making whey the only dairy commodity to show strength at the end of 2025. Due to both the growing popularity of GLP-1 weight-loss drugs and social media influencers pushing more protein consumption, the trend of rising demand for dairy proteins is unlikely to slow this year,” Berning said.

In addition, whole milk and 2% milks will once again be allowed in the nation’s public schools beginning in the 2026-27 school year, which likely will boost consumption of both fluid milk and butterfat next fall, she added. In addition, consumers are focusing on gut health by eating more fermented products, including yogurt and Kefir.

Will Dairy Margin Coverage Deliver Payments in 2026?

Wed, 14 Jan 2026 17:21:27 GMT

With Dairy Margin Coverage (DMC) enrollment now open for 2026 , many dairy producers are asking the same question: Will the program actually pay out this year?

Based on current market conditions, analysts say the answer is yes.

Market Conditions Point to Early Payments

Weak milk prices, along with growing milk production both in the U.S. and abroad, are putting pressure on dairy margins, making it likely that DMC payments will be triggered early this year and possibly continue for several months. Analysts say these conditions make the program especially important as producers begin shaping their risk management plans.

“As we’re looking at 2026, milk prices are quite low to kick off the year,” says Katie Burgess, director of risk management at Ever.Ag. “And just based on the ample supply of milk coming off of farms, we are expecting low milk prices to continue into the foreseeable future, which will likely trigger DMC payments in the months ahead.”

Using mid-January market data, Burgess’ modeling gives producers a sense of what the first few months of 2026 could look like. Based on current pricing, the margin outlook suggests support might not be limited to just one or two months.

(Ever.Ag)

“Our model right now is showing payouts of more than $1 per hundredweight for January through April, and then some smaller payments for May through July as well,” she says.

Milk prices are at their lowest levels in quite some time, with the All-Milk price falling below $19 per cwt. Feed costs, meanwhile, remain relatively stable, helping to offset some of the pressure. But the gap between milk income and overall production costs is still tight for many operations.

Global markets are also awash in milk, with Europe and New Zealand adding to an already overwhelming supply. Burgess points to that international abundance as a major factor influencing U.S. prices

“Europe and New Zealand are creating a lot of milk,” Burgess adds. “So, we’re worried that we could lose some of our market share in the export space here in early 2026, which is another reason why prices are under so much pressure.”

Product Prices and Supply Weigh on Margins

William Loux, senior vice president of global economic affairs for the National Milk Producers Federation, says the margin outlook has become clearer in recent weeks, with market indicators also pointing toward a retroactive payment for December 2025.

“Given where dairy prices are today, I would certainly expect to see some DMC payments here through the first quarter and probably through the first half of the year,” Loux says. “ And I think it’s fairly well assured that we will have DMC payments for December’s milk.”

Loux stresses that while DMC is doing what it was designed to do, it’s never ideal to rely on safety net programs.

“It’s good that DMC is paying out, but it’s almost always better for prices, and better for dairy farmers, if they don’t,” he adds.

Butter and cheese prices continue to play an outsized role in shaping the milk price outlook. Because these commodities are major drivers of Class III and Class IV prices, prolonged weakness in either market pulls down the overall milk price and makes it harder for margins to improve, even if feed costs stay relatively manageable.

“Butter continues to drop and hit $1.30 today, cheese dropped below $1.30,” Loux says. “Those are the products that have the biggest influence on the milk check at the end of the day.”

Part of the challenge is on the demand side, particularly for cheese. While retail sales remain “pretty good,” Loux notes cheese is heavily dependent on foodservice.

“Cheese is one of those products that does better at food service than it does at home,” he says. “Your typical meal out to eat, especially in a fast food restaurant, is going to have more cheese on it than your average meal at home.”

With consumers pulling back on away‑from‑home spending, that softer foodservice demand is feeding directly into weaker cheese prices and a lower Class III milk price.

Butter is facing a different set of pressures. Rapid growth in butterfat tests has pushed more fat into the system, requiring the U.S. to move more butter and butterfat products into export channels. And until those export markets fully develop, that added supply is keeping a lid on butter prices.

Enrollment Now Open with Expanded Options

With margin pressure already emerging early in the year, producers now have the opportunity to enroll in the 2026 DMC coverage year. U.S. Secretary of Agriculture Brooke Rollins announced yesterday that enrollment for the DMC program will run from Jan. 12 through Feb. 26.

Signed into law on July 4, 2025, the One Big Beautiful Bill Act reauthorized DMC through 2031 and introduced several changes aimed at strengthening the program’s value. One of the biggest changes made gives producers more flexibility in how much of their milk can be protected at the lower Tier 1 premium.

“The most notable change for 2026 is that now producers will be able to enroll six million pounds at Tier 1, versus historically it’s been five million,” Burgess says. “So, it gives you an extra million pounds of coverage, especially for those medium-sized farms that could cover a lot of their milk, but not all of it.”

All operations enrolling in DMC for 2026 must establish a new production history. Existing dairies will base that history on the highest milk marketings from 2021, 2022 or 2023, while newer operations will use their first year of production data, even if incomplete.

Producers also have the option to lock in coverage for six years, from 2026 through 2031, and receive a 25% discount on premium fees. Coverage options remain flexible, including a catastrophic level available for the $100 administrative fee.

Incorporating DMC into Your Risk Management Toolbox

As producers begin to layout out their risk managment plans, Burgess says DMC remains one of the most cost-effective tools available.

“For that 15¢ a hundredweight it costs to enroll Tier 1 volume, it is the best risk management coverage you can buy right now,” she says. “For small or medium-sized farms, it’s meaningful coverage, and even for large farms, it’s at least one thing you can do to protect yourself.”

Still, both Burgess and Loux emphasize DMC works best when paired with other risk management tools. Loux encourages producers to consider Dairy Revenue Protection, Livestock Gross Margin or futures and options strategies alongside DMC.

“The uncertainty in dairy markets is not going away anytime soon,” Loux says. “So DMC, DRP — these are great programs to utilize.”

With enrollment open, milk prices under pressure and expanded coverage rules in place, DMC is positioned to play a big role in protecting dairy margins in 2026.

2025: A Year for the Cattle Market Record Books

Fri, 09 Jan 2026 17:00:34 GMT

Livestock market historians will likely record 2025 as the year prices exploded beyond the wildest imaginations of even the most seasoned industry veterans. Holstein springers bested $4,000/head regularly through the year, and briefly surpassed $4,500 in Minnesota in late fall. Calves, too, saw prices that were unimaginable even a year ago, with Holstein heifer calves often exceeding $1,000/head and newborn beef-cross calves sometimes fetching $1,800/head or more this year.

But it appears that the doors that were once blown off the market bus through the year are settling back into place as year-end approaches. For the second consecutive month, Holstein springer values are down, falling $200-500/head in California and about $400/head in Minnesota month-over-month.

Calves, too, saw prices temper a bit in the past month. Holstein heifer calves stayed steady nationwide, but the test was extremely light – perhaps a signal that dairies are holding onto absolutely every heifer to bolster replacement inventories. Beef-cross calves – the runaway darlings of the 2025 marketplace – have also pulled back slightly in price, but remain well over $1,000 per head for newborns nationwide.

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.

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.

The Hard Truth About Milk Prices, And Why the Cattle Market May Soften the Blow

Fri, 05 Dec 2025 21:23:06 GMT

Milk prices are under pressure, and the people closest to the numbers say it starts with one simple reality: producers are pumping out more milk.

It’s an interesting dynamic for dairy. Milk output has surged, while dairy cow numbers are also at a 30-year high. And export demand may be at records, but weaker demand for dairy products like cheese are what’s also weighing on the market. But lower feed prices and strong beef-on-dairy demand is helping offset some of those losses for dairy producers.

During Farm Journal’s MILK Business Conference this week, Phil Plourd, head of market intelligence for Ever.Ag, Rick Naerebout, CEO of Idaho Dairymen’s Association, and Chip Nellinger, co-founder and owner of Blue Reef Agri-Marketing, dig into the what’s at play today, and what comes next, across dairy, cattle and grains.

The Market Demanded More Milk, And Farmers Answered

Plourd says the market is living out what the industry asked for not long ago — more production to meet expanding capacity.

“Last year at this time, and the whatever year preceding that, we are asking dairy farmers for more milk, right? We have these huge investments in capacity, billions of dollars investment, and we kind of needed more milk. Prices are high. Bring the milk. And well, here we are. The farmers have brought the milk,” Plourd says.

That supply response is showing up in USDA data in a way he calls historically significant.

“The last two USDA reports, we are at 3.8%, 3.9% growth. That’s on the strong side of strong historically. We have the most cows since 1993. We’re up 200,000 head.”

When the conversation turns to whether that continues into 2026, Plourd points to how the cycle typically works — and how long it can take to shift.

“Low prices cure low prices. It’s a sad reality, but I think we’re kind of in that,” he says. “We’ve been in the more milk cycle, more money, more milk, and now we’re in the less money, less milk. We’re going to transition into that phase, but it’s going to take a while.”

He says one reason it can take longer this time is the cash coming in from another side of the farm.

“It’s going to take a while because cue beef income, that’s a big deal right now, and it is creating a real question mark about how producers will respond to low milk prices when what I’m calling their ‘cow-calf side hustle’ is making so much money,” Plourd adds.

The Dairy Growth Gripping Idaho

Naerebout says Idaho’s growth rate is running well above its recent pace, and he puts hard numbers on what that means in daily production.

“Yeah, so Idaho, we see about an 8% year-over-year growth rate this year. To put that in context, the previous five years we’ve been at a growth rate of 1%,” Naerebout says. “For us, the size of our dairy state, an 8% growth rate is 4 million pounds of milk a day that our producers have turned on.”

He says profitability has mattered, and so has the direction of feed costs — which is helping ease some of the pressure of lower milk prices.

“We’ve had good economics. 2024, 2025 have both been profitable years for our dairymen. We’re seeing feed costs lessen, which has added to that profitability this year,” he explains.

He also points to what changed at the processor level, limits that had been in place, then weren’t, which is helping.

“We did see our processors take off their base restrictions for the first time in a number of years. So, for the first time, our dairymen had that opportunity to grow at more than just a very modest rate,” he adds.

How Can Producers Weather $13 Milk?

When asked directly how producers ride out this price pressure, Plourd goes straight to the beef line item and how different it is now.

“I think the beef income is a big deal because it’s $4 per hundredweight, maybe $4.50, and it used to be a $1 to $1.25 or $1.50,” Plourd says. “That’s providing some padding.”

He says risk management matters too — especially when farmers have windows to lock in protection.

“A lot of these folks have risk management programs in place too. You had an opportunity to put big time coverage on 8 to 12 weeks ago, and I think we have farmers that have done that,” Plourd says.

And when the market turns against you, he says the response is as much operational as it is financial.

“It’s like it always is, right? You stick to the little things and hunker down and you know, it turns around,” he says.

Can These Record-High Cattle Prices Last?

Nellinger says cattle markets are also governed by cycles — and he believes the market has likely already put in its highs.

“I think they’re likely in. And it kind of is the opposite of what Phil was talking about, right? Eventually high prices cure high prices, just like low prices cure low prices. Economics will work,” Nellinger says.

He points out how slow cow-calf rebuilding is intersecting with beef-on-dairy, and the impact that’s having on beef supply.

“What has been slow is rebuilding the cow calf herd,” Nellinger says. “And I think the beef-on-dairy has really come in the last few years and taken that function over with the lack of expansion, traditionally, for the cow-calf guy.”

When asked if fundamentals stay supportive into the end of the decade, he says yes, but stops short of predicting a smooth ride.

“I generally say yes, but you know, does that mean we stay here? There’s likely a lot of volatility coming,” he adds.

He also describes what he’s seeing recently in how the market is handling bearish headlines.

“I do think we’ve gotten back to fundamentals though, just in the last week or so and digested a lot of bearish news though,” Nellinger says.

Tyson Beef Processing Plant Shutdown

Late last month, Tyson Foods announced its plan to end operations at its Lexington, Neb., beef facility and convert its Amarillo, Texas, beef facility to a single, full-capacity shift. The news sent cattle prices limit down.

The shutdown could have major implications. According to Drovers, the Lexington plant employs nearly 3,200 people and can harvest 4,500 cattle a day, but it has been running 3,600 to 3,700 according to John Nalivka of Sterling Marketing. It is one of 11 beef facilities in the company and one of the largest. The transition in Amarillo is expected to reduce daily harvest numbers from 5,500 to 2,700 to 2,800 and impact 1,700 workers. Tyson says the changes will go into effect on Jan. 20, 2026.

Jeff Stolle, Nebraska Cattlemen’s Association director of marketing, predicts the Lexington plant closure will reduce Nebraska cattle harvest capacity by 15%.

The news of the shutdown wasn’t a major surprise for market analysts, as packers have been seeing losses. On the impact of packing plant closures and what that means for space and demand, Nellinger acknowledges the seriousness and then describes how the futures market reacts and recalibrates.

“Yeah, it’s a serious issue, obviously. But again, I think we’ve digested that news,” he says. “With the limit down day after the announcement of that, expanded limits the next day… and now we’ve rallied sharply.”

He says capacity doesn’t simply disappear — it can shift, which will help absorb the losses.

“A lot of that shackle space will be picked up regionally at other plants, though,” Nellinger says.

Another Piece of Good News?

Beef prices are a bright spot for those producers tapping into the beef-on-dairy demand, but lower feed prices are also softening the blow of lower milk prices, and those lower feed prices could continue to be a theme for 2026.

One of the reasons is the record corn crop USDA is reporting. Even though Nellinger argues USDA’s yield estimates on corn have room to decline, USDA is still printing a large number.

“I have said all along for months and months, I think we’re closer to last year, closer to 180 bu. per acre,” Nellinger says. “USDA says 186 bu. per acre. We only have one crack left in January. I’m not sure they’re going to change much.”

He also notes that even if the crop is smaller, that doesn’t automatically mean USDA changes its published estimate.

“We could have been at 181, 182, 183, 184, 185, 186 yield, but that doesn’t mean the USDA is going to change it,” he says.

If USDA does adjust in January, he says demand can amplify the reaction.

“I think it would help if USDA lowers yield in January,” Nellinger says. “The demand’s still very, very strong out there on the export side for corn.”

And he argues some bullish export information arrived too late to matter when it would have had the most impact.

“The last two weeks in October, we exported 180 plus million bushels of corn. That would have helped back then to know that. It’s old news and it’s not affecting the market,” he adds.

Soybean prices have remain mixed after the sharp surge after a reported trade deal with China. Nellinger says the soybean market this past week has been reacting to uncertainty, especially around trade details and timing.

“That’s really the big thing in the bean market. No market likes uncertainty, and there’s just no clarification on the details of this trade plan,” Nellinger adds.

He says the longer that uncertainty lasts, the more the market’s tone shifts.

Shocking 7,000 Head Drop Hits Dairy Cows First Time Since 2024

Tue, 25 Nov 2025 14:50:33 GMT

The USDA released the October Milk Production report on Friday, as originally scheduled. This gets the market up to date with at least one report, now back on schedule. They also released the August Dairy Productions report Friday as well, but the market is still waiting for the announcement of when we will see the September report to play catch up for that information as well.

In a shocking discovery, the Milk Production report has the first decline of cow numbers since 2024, indicating a shift to cull more cows with falling milk prices. In October the beef cattle prices peaked as milk prices were sharply declining. It made for the perfect opportunity to send the lower producing cows to market to gain a quick revenue stream to make up for the lacking milk check as well as lower the feed bill.

It is speculated that this trend of a shrinking dairy herd will continue as feeder cattle futures have fallen over 80 cents per pound since mid-October. This gives less cash flow to the farms that have been getting by from profit from beef-on-dairy calf sales. The impact of the fallen milk prices will hit harder, making culling decisions for cows with less-than-ideal milk production more necessary.

The Milk Production Report itself was still perceived as bearish. Showing 3.7% higher milk production compared to October 2024. As well as the August Dairy Products report, showing more cheese, butter, dry whey, and Non-Fat Dry Milk produced when compared to 2024.

The Dairy Products report wasn’t all bearish though. There was a decline in production from the July report in nearly all dairy products, with the most significant decline in production in butter, down 2.9% from July production. Frozen products saw a more significant decline in production from 2024, down 5.5% to 10.1% in ice cream products, and a whopping 19.3% lower in Sherbert from last year.

In a world of bleak and dreary dairy market news, we look for silver linings and a drop in cow numbers may be just what the declining dairy market needs to have some hope for the future of diary prices next year. The old adage is “the cure for high prices is high prices, and the cure for low prices is low prices”. Low prices discourage inefficient or marginal producers. Culling those marginally producing cows may bring a shortage of production overtime and hopefully lead to higher prices. In the meantime, the industry has shown how resilient our American dairy farmers can be by increasing efficiencies and coming up with new innovations. So, while the markets look bleak today, there is still a lot to look forward to.

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.

Experts Say Strong Cattle Prices Could Continue Through the End of the Decade

Mon, 17 Nov 2025 14:43:24 GMT

Despite political rhetoric surrounding cattle and beef prices, a panel of leading cattle market experts says the fundamentals remain firmly supportive of historically strong cattle prices for years to come.

During a discussion at the Missouri Governor’s Conference on Agriculture, Derrell Peel, Extension livestock specialist at Oklahoma State University; Lance Zimmerman, senior animal protein analyst with Rabo AgriFinance; and Bryon Wiegand, director of animal science at the University of Missouri, offered a united outlook: The tightest cattle supplies are still ahead, and demand remains exceptionally strong.

Are Cattle Prices “Too High”? Experts Say No

Recent comments from Washington suggest cattle and beef prices are “too high,” but Peel says the current price levels make sense when viewed in context.

“There’s always a speculative element to these markets,” Peel says. “That means there’s always an opportunity to push prices a little high, and we can certainly see temporary corrections because of that. But fundamentally, I don’t think we were too high. This market has very strong underlying foundations for why we’re where we are right now.”

Zimmerman adds that per capita beef supplies haven’t changed enough to justify blaming supply alone.

“We want to talk about tighter supplies, and yes, the cow herd has been in decline since 2019,” Zimmerman says. “But per capita beef supplies, which really influence market prices, have essentially been steady. We’ve been between 58 lb. and 59 lb. per person for the last six years. So when we talk about record-high beef prices, most of that increase is actually coming from demand. Based on our models, this is the strongest beef demand we’ve seen since 1983.”

The Tightest Cattle Supplies Haven’t Even Arrived Yet

Even after several years of liquidation, Peel says the cattle industry hasn’t reached the tightest point of this cycle.

“We’ve tightened feeder supplies significantly,” he says. “We’ve masked some of that tightness at the feedlot level, but the feeder cattle supply out in the country is extremely tight, and we still don’t have any fundamental data that shows we’re retaining enough heifers to start rebuilding the herd. So from that standpoint, the tightest supplies are still ahead of us.”

Peel says that means beef production will move lower and per capita supplies will tighten further over the next several years.

Zimmerman notes the market still hasn’t fully absorbed the impact of fewer Mexican feeder imports.

“I think the market priced some of that in on the feeder side, but it’s not fully reflected in fed cattle slaughter yet,” Zimmerman says. “Those double-digit declines in Mexican cattle imports are worth another 800,000 to 1 million head decline in slaughter, all else equal. That’s going to show up in this fourth quarter and especially next year.”

Elevated Prices Could Persist for Much of the Decade

With supplies tightening further, Peel says elevated cattle prices could stick around well into the decade.

“I think we could see elevated cattle prices for much of the rest of the decade,” he says. “History tells us that we tend to put in a peak about a year to a year and a half after we know we’re saving heifers for rebuilding. And I’ll say this, people worry about a sharp drop like we saw about a decade ago, but this is a very different situation. A decade ago was the fastest rebuild in history. This time, we’re on the slowest rebuild in history. It’s a completely different model.”

Speculative Money Pulls Back, but Cash Markets Stay Strong

Political statements earlier this year triggered fund liquidation in cattle futures, but Zimmerman says cash fundamentals remain intact.

“We had almost a record-long speculative position in both live cattle and feeder cattle futures,” he says. “Then, a statement comes out from the White House , and those funds start heading for the exits. But here’s the thing, futures markets are paper markets, and they ultimately have to come back to the cash fundamentals that drive them. Right now the market is basically telling the cattle sector, ‘Prove it to us. Show us these valuations are justified.’ And so far, the cash market is doing exactly that.”

Zimmerman believes futures can rebound as supplies tighten and demand remains historically strong.

“As we go forward, it’s going to come down to supply and demand proving those price levels,” he says. “I do think the picture is favorable enough that we get back to those earlier highs and even exceed them over the next year or two.”

Consumers Still Willing to Pay for Beef

When asked whether beef prices have reached a level consumers reject, Peel says the marketplace shows no signs of that.

“The market is telling us beef prices are not too high,” Peel says. “Consumers are willing to pay what they’re paying. There are plenty of alternative proteins they can turn to, and they’re not turning away from beef. It’s easy to pick out beef as a target when inflation is getting a lot of attention, but consumers will turn away naturally when they feel they need to, and we aren’t seeing that.”

Packers Stay in the Red, but Consolidation Isn’t Imminent

Wiegand says packers are facing substantial financial pressure.

“We have some packers that are eight quarters in the red,” he says. “Right now the margin sits with the feeder. Corn prices are low, cattle are worth a lot and packer margins aren’t just tight — they’re upside down. And the big question is how long they can weather that.”

However, Peel says packers will hold on as long as possible.

“They knew this was coming, and they prepared as well as they could,” he says. “Packers are diversified across other proteins and global markets, so that gives them time. But there is a limit. None of them want to give up market share in a sector this concentrated, so they’ll hang on as long as possible.”

Read more about Peel’s comments regarding the industry chaos today: Beef Industry Chaos: Tight Supplies, Strong Consumer Demand and Political Interference

States Look to Expand Small Processing Capacity

Missouri is investing in smaller processors, and Wiegand says those efforts are helping at the local level.

“We’ve created incentives for small and very small processors, especially around cold storage and upgraded equipment,” he says. “A lot of these businesses are squeezed on labor, and many aren’t full-service slaughter operations, but they are finding success in value-added products. They make a difference locally, but in the national picture, they’re still just a blip because 95% of the market sits with about four companies.”

He adds that “buy local” momentum remains strong since COVID-19 and continues to support these smaller processors.

It All Boils Down to This

All three experts agree the U.S. cattle market remains supported by historically strong fundamentals. Supplies are tightening, demand remains robust and herd rebuilding is expected to be slow, setting the stage for strong cattle prices potentially through the end of the decade.

Your Next Read: Did the President’s Plan to Lower Beef Prices Wreck the Bull Run in the Cattle Market?

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

Springers Pull Back, Calves Stay Strong

Fri, 07 Nov 2025 19:19:01 GMT

The Holstein springer market might have hit a historic ceiling last month, as values, while still strong, dropped nationwide in all reported markets this month. The biggest hit came in Minnesota, where Holstein springers fell about $500 per head at Pipestone Livestock Auction Market. Pot loads of Holstein springers from California held fairly steady at around $3,500 per head, but Jersey loads also dropped by about $500 per head, averaging about $2,650 per head. Calf prices remain vigorous, with beef-cross calves topping out at a robust $1,600 to $1,750 per head.

Your Next Read:
Healthy Lungs, Better Beef

Milk, Cheese, Butter, Oh My! What's Driving these Markets

Thu, 04 Sep 2025 20:26:46 GMT

CME markets remain relatively range-bound. Butter futures are trading a whopping 23¢ premium just a month out, signaling butter likely won’t break below the $2 mark. Cheese is still finding support at $1.65 and has a lot of sell-side interest at $1.85, with trade feeling choppy in between. School milk needs might help tighten up cream and spot milk supplies, but milk still feels like it’s long in most of the country.

CME cheese markets dropped today, with blocks slipping 3.5¢ to $1.73 per pound and barrels shedding $0.0375 to close at $1.7425. Four lots of blocks changed hands. Spot NDM declined to $1.2275 per pound, losing $0.0075, with six lots exchanged. Spot butter ticked up just a quarter cent to $2.015 per pound.

Milk was more available in the Midwest amid cooler temperatures and holiday downtime at cheese plants. USDA reported spot milk in the region at a midpoint of 25¢ per hundredweight under class. That compares to +$1.00 last week, +$1.75 in 2024 and -5¢ on the five-year average. Class II multiples in the Central region also declined, down to 127 compared to 130 last week, 131 last year and the five-year average of 136.

Globally competitive prices kept U.S. cheese and butter exports strong in July. Outbound cheese volume totaled 114.9 million pounds, up 29% year-over-year. Mexico purchased 38.9 million pounds, up just 1% versus 2024. Butter exports totaled 18.5 million pounds, up 206% on the year. But milk powder exports continued to lag prior-year levels at 131.9 million pounds, down 16% compared to July 2024.

Spot Milk Supplies Tight as Kids Go Back To School

Thu, 21 Aug 2025 16:00:00 GMT

The USDA’s Dairy Market News report for the week of August 11-15th, showed a decline in supply for milk, Nonfat dry milk (NDM), dry buttermilk, dry whey, lactose, and unsalted butter. However, there is plenty of salted butter available, stocks up 9% with prices falling to the lowest price seen since April at $2.30.

Milk, on the other hand, has struggled with heat recently, reducing production especially in the Central and Eastern regions, leading to a short-term decline in milk output and component levels. On top of that, some plants are experiencing downtime or running lighter schedules temporarily. This has implications for cheese as well, since many processors are pulling back production of cheese while Class I milk takes all the attention for bottling efforts to supply schools as they are back in session.

U.S. schools use approximately 8% of all fluid milk sold in the country, accounting for about $1 billion in annual fluid milk sales through the school meal programs. While not the largest demand creator for milk, it is a reliable, structured demand that serves over 7.3 billion servings to students around the U.S. annually.

While the USDA contracts ensure that priority is placed on school milk production, the distributors have the ability to limit options when supply is tight. Such as less flavored options or fewer fat-choice options. Menus at the school can be easily adjusted to pivot towards unflavored options when harder to source or when school budgets are tight with higher milk prices.

The question about a short-term impact or longer-term rally may be answered by looking at the weather and data from the USDA. For the weather, there is a cooler stretch coming for the Midwest while a heatwave will impact the West. So, it appears that milk production will see a boost as cow comfort increases in the regions that need it the most and possibly a pullback in the one area that has an abundance of supply.

From the USDA, the August WASDE report released last week, showed higher milk production in both 2025 and 2026. Forecasted at 229.2 billion pounds for 2025, up 900 million pounds since the July report. On the demand side, we see exports higher on both fat basis and skim-solid basis for 2025 and 2026. This, on top of higher domestic use, keeps USDA forecasted prices steady at $18.50 for Class III in 2025 and $17.85 for 2026.

The spot milk supply shortage may have a cause-and-effect impact on cheese, cream and whey prices especially to the consumer. As said above, priority is placed on meeting school fluid milk needs, so cheese makers may pay more for the same product leading to higher snack, pizza and bakery good prices. It can also lead to less options available for the organic, lactose-free and flavored buyers, as well as a longer-term impact on frozen meals.

So, while the current spot milk shortage may cause some support in milk prices, the bigger impact is more on the consumer side, facing higher prices in store. The schools still get their supply, albeit with less variety, but consumers will feel higher prices down the line.

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.

A Balancing Act in Cheese and Class III Futures

Tue, 19 Aug 2025 20:24:56 GMT

It was another day of searching for clear direction in the cheese and Class III markets. Spot block prices ticked higher, ultimately giving cheese futures a boost. Class III prices slumped by comparison, giving back at least a portion of yesterday’s gain, led in part by some erosion in the whey space. Following weaker butter and SMP results at GDT, the Class IV complex saw a decisive move lower. Looking ahead, the market is eagerly awaiting Thursday’s USDA Milk Production and Friday’s Cold Storage reports.

Today’s Highlights:

Spot blocks continued to climb, up two cents to $1.8500 per pound, while barrels remained at $1.8100 per pound. No cheese traded. The CME butter market pulled back slightly, down $0.0125 to $2.3200 per pound, with two loads exchanged.

Class III 2025 futures were mixed, with September up 12 cents to $18.88 per hundredweight and December down eight cents to $18.09, while first half 2026 contracts were all in the red. September “all cheese” futures increased to $1.9230 per pound, a 1.5-cent gain. Q4 Class IV dipped to $18.50 per hundredweight, shedding a nickel.
There wasn’t a lot of movement at this week’s Global Dairy Trade event. SMP slipped 1.7% to $1.25 per pound, while WMP ticked up 0.6% to $1.83. Cheddar eased just 0.6% to $2.06 per pound. Mozzarella was the biggest mover, down 5.2% to $2.02 per pound. Butter dipped 1.0% to $3.24 per pound (on an 82% butterfat test).

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.