Dairy markets end the week with mixed signals: cheese holds steady while butter and NDM decline. Low trading volume hints at potential volatility ahead. Global factors shape the landscape, including rising EU exports and Chinese demand. What’s next for dairy prices? Find out in our comprehensive market report.
Summary:
In the dairy market, cheese prices are stable, while butter and nonfat dry milk (NDM) prices have declined due to low trading activity. Cheddar blocks didn’t change from $1.9200/lb, but butter decreased by 2.25 cents. The subdued trading suggests possible price fluctuations soon. Global factors are significant, with more EU butter exports adding competition and rising Chinese demand supporting cheese prices. The USDA forecasts a slight rise in Q2 2025 Class III milk prices to $18.75/cwt. Despite mixed signals, market optimism persists, and stakeholders should watch global production trends and prepare for possible shifts.
Key Takeaways:
Cheese prices remained relatively stable, with blocks unchanged and barrels slightly declining.
Low trading volume across dairy markets could increase volatility the following week.
Rising EU butter exports and increased Chinese demand for cheese and whey are shaping global market dynamics.
USDA forecasts suggest a moderate upward trend in Class III milk prices, driven by steady cheese demand.
Mixed market sentiment highlights the importance of a diversified approach for stakeholders in navigating different product trends.
Dairy stakeholders are advised to monitor global production trends and consider strategic actions to optimize market opportunities.
Dairy commodity markets have seen notable price movements, with cheese holding steady as other products experience declines. Here’s a breakdown of the key price changes and trends impacting the market:
Key Price Changes & Market Trends
Product
Closing Price
Change from Yesterday
Weekly Average
Change from Last Week
Cheese (Blocks)
$1.9200/lb
Unchanged
$1.9140/lb
+4.55¢
Cheese (Barrels)
$1.8175/lb
-1.25¢
$1.8215/lb
+2.45¢
Butter
$2.3775/lb
-2.25¢
$2.3985/lb
-1.15¢
Nonfat Dry Milk
$1.2800/lb
-2.00¢
$1.3010/lb
-3.70¢
Dry Whey
$0.5550/lb
-0.50¢
$0.5675/lb
-3.80¢
Cheddar block prices remained unchanged at $1.9200/lb, while barrels slightly decreased by 1.25 cents. Butterexperienced the most significant daily decline, dropping 2.25 cents to close at $2.3775/lb. Nonfat dry milk (NDM)also fell by 2 cents, settling at $1.2800/lb, while dry whey decreased by half a cent to $0.5550/lb. Despite today’s declines, weekly averages for cheese remain higher than last week, indicating overall strength in the cheese market.
Volume and Trading Activity
Trading activity was relatively quiet across most products, reflecting end-of-week positioning:
Cheddar blocks: 1 trade, one bid, two offers
Cheddar barrels: 3 trades, zero bids, four offers
Butter: 0 trades, zero bids, four offers
NDM Grade A: 0 trades, one bid, six offers
Dry whey: 2 trades, seven bids, 1 offer
Cheddar barrels showed the most activity among cheese products, while dry whey saw the highest number of bids, suggesting some buying interest despite the price decline. The lack of trades in butter and NDM and multiple offers indicate potential selling pressure in these markets.
Analysis of Low Trading Activity: The subdued trading volume today may be attributed to several factors:
End-of-week positioning: Traders often reduce activity on Fridays to limit exposure over the weekend.
Uncertainty in global markets: Recent fluctuations in international dairy prices may be causing buyers and sellers to hesitate.
Anticipation of upcoming reports: Market participants might wait for next week’s USDA Milk Production report before making significant moves.
This low activity could increase volatility early next week as pent-up demand or supply is released into the market.
Weekly CME Cash Dairy Product Prices ($/lb.)
Mon
Tue
Wed
Thur
Fri
Current Avg.
Prior Week Avg.
Weekly Volume
Butter
2.3800
2.4300
2.4050
2.4000
2.3775
2.3985
2.4100
51
Cheddar Block
1.9025
1.9075
1.9200
1.9200
1.9200
1.9140
1.8685
8
Cheddar Barrel
1.8150
1.8175
1.8275
1.8300
1.8175
1.8215
1.7970
8
NDM Grade A
1.3250
1.3000
1.3000
1.3000
1.2800
1.3010
1.3380
15
Dry Whey
0.5875
0.5675
0.5675
0.5600
0.5550
0.5675
0.6055
4
Global Context
International dairy markets are exerting significant influence on U.S. prices:
Oceania Production: For the 2024/2025 season, New Zealand’s milk production increased by 1.5% yearly, putting downward pressure on global butter and whole milk powder prices.
European Union Exports: EU butter exports have risen 8% in the last quarter, intensifying competition in key Asian markets and potentially limiting U.S. export opportunities.
Chinese Demand: Recent data shows a 5% increase in Chinese dairy imports, primarily cheese and whey. This may explain the relative strength of U.S. cheese prices despite the weakness of other dairy commodities.
South American Production: Drought conditions in parts of Brazil and Argentina have reduced milk output, potentially creating opportunities for U.S. exports to fill supply gaps in the region.
Forecasts and Analysis
The USDA’s latest projections for Q2 2025 suggest a slight improvement in Class III milk prices, with an average of $18.75/cwt expected. The relative stability in cheese prices, a key component of the Class III formula, supports this forecast.
The chart above illustrates the USDA’s projected Class III milk prices compared to historical data. The forecast suggests a moderate upward trend, likely driven by expectations of steady cheese demand and potentially tighter milk supplies as we move into the summer months.
Scenario Analysis:
Bullish Case: If Chinese demand continues to grow and South American production remains constrained, Class III prices could exceed $19.00/cwt.
Bearish Case: A surge in EU or New Zealand production could pressure global prices, potentially pushing Class III below $18.00/cwt.
Base Case: The current $18.75/cwt projection assumes stable domestic demand and moderate export growth.
Market Sentiment
Market sentiment remains cautiously optimistic, with mixed signals across different dairy products. The stability in cheese prices, particularly blocks, is a positive sign for producers. However, the declines in butter and NDM warrant close monitoring as we approach the spring flush. We’re seeing increased hedging activity in cheese futures, suggesting market participants anticipate potential volatility in the coming months.
Overall, the market appears to be in a transitional phase, with cheese maintaining its strength while other products face some headwinds. The divergence between cheese and other dairy product prices suggests a complex market environment in which different factors influence various segments of the dairy industry.
Closing Summary & Recommendations
In summary, today’s dairy markets showed resilience in cheese prices, particularly blocks, while butter, NDM, and dry whey faced downward pressure. The mixed performance across products highlights the importance of a diversified approach for dairy stakeholders.
Recommendations:
Producers:
Focus on optimizing cheese production given its relative market strength.
Consider locking in prices for a portion of future production using futures or forward contracts.
Monitor feed costs closely, as any increases could squeeze margins despite stable milk prices.
Exporters:
Explore opportunities in the Asian cheese market, particularly China, where import demand is growing.
Be cautious with butter exports due to increased competition from the EU.
Investigate potential new markets in South America where drought has affected domestic production.
Traders:
Watch for potential arbitrage opportunities between cheese and other dairy products given the current price divergence.
Keep an eye on upcoming USDA reports for any shifts in production forecasts that could impact this trend.
Consider the impact of low trading volume on potential price volatility early next week.
All Stakeholders:
Closely monitor global production trends, especially in New Zealand and the EU, as they influence U.S. market dynamics.
Pay attention to upcoming spring flush data, which could significantly impact price directions across all dairy products.
Stay informed about developments in Chinese demand and South American production, as these could create unexpected market movements.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
CME dairy markets show mixed results as global supply growth meets shifting demand. Cheese strengthens while butter and whey face pressure. USDA revises production forecasts amid changing cow yields. International factors and economic shifts reshaped the landscape. What’s driving these trends? Find out in our comprehensive report.
Summary:
The CME Dairy Market Report from February 13, 2025, shows a mixed performance for dairy products. The cheese is doing well, but the price of butter and dry whey has dropped. The USDA has lowered its prediction for milk production because of fewer cows and lower yields. However, worldwide, milk supply is expected to grow by 0.8%. U.S. dairy exports are strong, and more demand from China could boost prices. All milk will likely rise to $23.05 per hundred weight, and feed costs might decrease by 10.1%. Dairy farmers are dealing with challenges like labor shortages and new rules, while global markets are affected by EU and New Zealand changes. These various factors create a dynamic market that needs careful tracking by those in the industry.
Key Takeaways:
Butter prices decline slightly, but demand remains steady.
Cheddar blocks are stable, while cheddar barrels show a slight increase, suggesting balanced supply-demand conditions.
Nonfat dry milk and dry whey remain stable, with dry whey seeing a slight price decline.
Class III and IV milk futures suggest mixed expectations for upcoming months.
Global milk supply is expected to grow despite a revised downward forecast for US production.
US dairy exports continue to perform strongly, boosted by increased import demand from China.
Global dairy trade dynamics affected by regional challenges and economic factors are crucial for stakeholders to monitor.
The Chicago Mercantile Exchange (CME) dairy market showed mixed results on February 13, 2025, reflecting the complex interplay of supply, demand, and global economic factors.
Cash Market Overview
Butter closed at $2.4000 per pound, down 0.50 cents from the previous day. The market saw active trading with eight trades, three bids, and four offers. Despite the slight dip, butter prices remain relatively strong, supported by steady demand.
Cheddar blocks held steady at $1.9200 per pound, with no trades but one offer recorded. The stability in block prices suggests a balanced supply-demand situation in the cheese market.
Cheddar barrels showed strength, increasing by 0.25 cents to close at $1.8300 per pound. There was one bid indicating potential buying interest.
Nonfat dry milk (NDM) Grade A remained unchanged at $1.3000 per pound, with two offers but no trades. The lack of movement in NDM prices suggests a steady market for milk powders.
Dry whey experienced the most significant decline of the day, dropping 0.75 cents to close at $0.5600 per pound. Three offers were recorded, but no trades took place.
Weekly Price Trends
Comparing the current week’s averages to the prior week:
Butter is slightly down, averaging $2.4038 compared to $2.4100 last week.
Cheddar blocks and barrels increase, with blocks averaging $1.9125 (up from $1.8685) and barrels at $1.8225 (up from $1.7970).
NDM has weakened, with the current average at $1.3063, down from $1.3380.
Dry whey has significantly decreased, averaging $0.5706 compared to $0.6055 last week.
Futures Market
Class III milk futures for February held steady at $20.33 per hundredweight, while Class IV futures slightly decreased to $19.42. These prices reflect expectations for milk prices in the coming month. Cheese futures for February increased slightly to $1.8980 per pound, indicating a positive outlook for cheese prices.
Market Analysis
The dairy market is showing signs of mixed sentiment, influenced by several key factors:
Milk Production Forecast: The USDA has revised its 2025 milk production forecast downward to 227.2 billion pounds, a decrease of 0.8 billion from earlier estimates. This reduction is due to lower-than-expected milk per cow yields (24,200 pounds, down 85 pounds) and adjustments in dairy cow inventories.
Global Supply Growth: Despite the U.S. forecast reduction, global milk supply is expected to grow by 0.8% in 2025, with all significant exporting regions anticipating gains for the first time since 2020. Favorable feed costs and improved weather conditions support this increase.
Demand Dynamics: U.S. dairy exports remain strong, reaching $8.2 billion in 2024. China’s projected 2% year-on-year growth in dairy import volumes in 2025 could also support prices for certain products, particularly whole milk powder.
Economic Factors: The USDA projects an all-milk price of $23.05 per hundredweight for 2025, a $0.50 increase from previous forecasts. Feed costs are expected to decrease by 10.1%, potentially improving dairy farm profitability.
Regional Challenges: Dairy farmers face ongoing challenges such as labor shortages, environmental regulations, and production constraints. However, innovative cost management and technology adoption are helping farmers navigate these issues.
The European Union’s butterfat market is weakening due to higher seasonal availability, with the H1-2025 outlook heavily dependent on spring pasture conditions and disease impacts.
New Zealand producers have carefully matched ingredient output to demand, firming prices while meeting opportunities in high-protein markets.
The U.S. milk output is expected to grow by just over 1% in volume in 2025, constrained by a shortage of heifers.
Conclusion
The dairy market remains dynamic, with varied performance across different products. While cheese appears to be the most substantial segment, butter and dry whey face some downward pressure. The industry continues to navigate challenges such as shifting production patterns, changing consumer preferences, and global trade dynamics. Producers and buyers should continue to monitor these trends closely, as they may impact pricing and procurement strategies in the coming weeks.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Dairy markets churn as CME reports mixed results. Cheese holds firm while butter melts and whey dries up. Global supply shifts and policy changes keep farmers on their toes. Bird flu hits Nevada cows, adding health concerns. Will your dairy operation adapt or get left behind?
Summary:
The recent CME dairy market report highlights how global supply changes, policy developments, and health issues are influencing dairy commodity trends. Cheese stays in demand, but butter and powder markets face challenges due to too much supply and weak demand. The possibility of new tariffs from the Trump administration could complicate international trade. Health risks like the avian flu in Nevada add more complications. Global milk production is anticipated to rise, driven by cheaper feed and better weather. The USDA forecasts a 2.7% increase in milk receipts for 2025, and varying profitability by region and farm size, with larger farms having an advantage.
Key Takeaways:
The CME dairy market report for 2025 highlights mixed results across cheese, butter, powder, and whey commodities.
Cheese demand remains robust despite an increase in milk supply, showing buyer interest remains strong.
Butter prices face downward pressure due to a surplus of cream in the U.S., affecting market stability.
Non-fat dry milk and skim milk powder markets are weakening due to sluggish demand and aggressive European pricing.
U.S. dry whey prices are declining, with future production and supply growth potentially impacting further.
Regional variations show differing profitability expectations across states, influenced by milk prices and feed costs.
Potential tariff changes under the Trump administration could affect U.S. dairy’s international competitiveness.
Biosecurity is crucial, with new avian influenza genotype detected in Nevada dairy cows, raising health concerns.
The USDA forecasts milk receipts to grow, but regional and farm size disparities will affect profitability.
Farmers are advised to stay informed on policy, enhance biosecurity, and explore hedging strategies for volatility.
The Chicago Mercantile Exchange’s latest dairy market report reveals a complex landscape with diverging trends across key commodities. Recent developments in global supply and demand dynamics, potential policy changes, and health concerns are shaping the industry’s outlook for 2025.
Commodity-Specific Trends
Cheese Maintains Strength
CME cheese futures demonstrated resilience this week. Despite a soft start that suggested the rally might end, spot cheese prices steadily increased throughout the week. This strength persists despite the growing global milk supply, indicating robust demand for cheese products.
Butter Prices Under Pressure
CME spot butter prices have fluctuated within a narrow range around $2.40. An abundance of cream across the U.S. exerts downward pressure on butter prices. Distressed loads of cream are trading at significantly discounted rates, allowing butter makers with available capacity to produce at a cost basis of $2.10 or lower.
Powder Markets Weaken
Non-fat dry milk (NFDM) and skim milk powder (SMP) prices fell across major dairy exporting regions this week. The European Union continues to offer SMP at a substantial discount, while demand from key markets like Mexico and Southeast Asia remains sluggish.
Whey Prices Continue Descent
U.S. dry whey prices extended their downward trend. This decline comes as global milk production growth is expected to turn positive in the latter half of 2024 and continue into 2025. Gains are anticipated across all major exporting regions for the first time since 2020.
Market Implications
The mixed results reflect a complex interplay of factors:
Global supply growth: Milk production is forecast to increase by 0.8% in 2025, supported by affordable feed costs and improved weather conditions.
Shifting demand patterns: While cheese demand remains strong, other sectors, such as butter and whey, face challenges.
Regional variations: The EU’s discounted SMP prices impact global markets, highlighting the importance of international trade dynamics.
Policy Developments
The Trump administration has been discussing “reciprocal” tariffs, which could significantly impact dairy trade. Under this policy, the U.S. would impose tariffs on imported dairy products equal to those faced by U.S. exports in other countries. For example, if the EU has a 1,896/MT tariff on U.S. butter, the U.S. would apply the same tariff to EU butter imports. This approach could complicate operations for many companies involved in the international dairy trade.
Health Concerns
A new genotype of avian influenza has been detected in dairy cows in Nevada, marking another spillover event from wild birds to cattle. This development raises concerns about disease transmission in the dairy industry and could impact production or trade.
Regional Outlook
The report provides detailed farm gate prices and margins for several key dairy-producing states:
State
2025 Projected Milk Price (USD/cwt)
2025 Projected Margin (USD/cwt)
Arizona
$21.94
$10.02
California
$20.82
$8.99
Idaho
$21.79
$10.76
Wisconsin
$21.55
$11.68
Texas
$22.51
$10.54
New York
$22.73
$11.84
These projections consider expected milk prices and feed costs, providing a comprehensive view of potential profitability across different regions.
Market Outlook
As the dairy landscape continues to evolve, industry stakeholders should closely monitor these trends:
The USDA projects an increase in milk receipts by 2.7% to $52.1 billion for 2025, while feed costs are expected to decrease by 10.1%.
The all-milk price is forecast at $23.05 per hundredweight, a $0.50 increase from previous estimates.
Profitability expectations vary significantly by region and farm size, with more extensive operations generally better positioned to capitalize on economies of scale.
Recommendations for Dairy Farmers
Monitor trade policy developments: Stay informed about potential reciprocal tariffs and their impact on market access and profitability.
Implement strict biosecurity measures: Given the new avian influenza genotype detected in Nevada, protect your herd from potential disease transmission.
Optimize operations based on regional projections: Use the state-specific farm gate prices and margins to inform your production and marketing strategies.
Consider hedging strategies: With the volatility in dairy markets, explore risk management tools to protect against price fluctuations.
Stay informed on global supply and demand trends. Monitor production levels in major exporting regions and demand shifts in key importing countries.
Explore value-added opportunities: Given the strength of cheese markets, consider diversifying into cheese production if feasible for your operation.
Monitor feed costs closely. As feed costs are projected to decrease, look for opportunities to lock in favorable prices for the coming year.
Invest in efficiency: As margins vary by farm size, consider improving operational efficiency to remain competitive.
Stay adaptable: Be prepared to adjust your strategies in response to changing market conditions, policy developments, and health concerns in the industry.
Margin Dashboard
2/12/2025
Mar-25
Apr-25
May-25
Jun-25
Jul-25
Aug-25
Sep-25
Oct-25
Nov-25
US Margin
12.31
11.62
11.00
10.04
10.08
10.56
11.18
11.48
11.51
Class III
19.78
19.37
19.35
18.68
18.76
18.76
18.94
18.95
18.56
Class IV
19.46
19.48
19.64
19.08
19.40
19.65
19.85
19.95
20.00
Corn
4.90
4.97
5.04
5.06
5.07
4.91
4.74
4.74
4.74
SBM
294
298
302
306
309
312
313
313
315
This margin dashboard provides a comprehensive overview of projected margins, milk prices, and feed costs for the next nine months, offering valuable insights for dairy farmers planning their operations.
Conclusion
The dairy market 2025 presents a complex landscape with challenges and opportunities. Dairy farmers can better navigate these dynamic market conditions by staying informed, implementing strategic planning, and remaining adaptable. The diverging trends across different dairy products and regions underscore the importance of a tailored approach to dairy farm management and marketing strategies.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Dairy markets show mixed signals as butter surges and NDM dips. Global factors, including New Zealand’s drought and Chinese demand, could support prices. With the milk-feed ratio at 2.15, profitability remains tight. In our comprehensive report, get the full scoop on CME prices, regional production, and industry trends.
Summary:
The CME Dairy Market Report from February 11, 2025, overviews the current dairy market. Butter and cheese prices have increased, but NDM and dry whey prices have fallen, showing mixed signals. The report highlights how different regions are producing various amounts of milk, and it talks about future trends like a drought in New Zealand and possible increased dairy imports from China. Even though milk prices are high, feed costs are also rising, tightening profit margins. The report also discusses how the dairy industry is changing to meet new consumer demands for healthier, eco-friendly products. Technology in dairy farming is advancing, which could help the industry grow. It also provides updates on the 2025 Farm Bill and weather forecasts for major dairy regions in the U.S. Overall, the market is dynamic, with many factors affecting supply and demand, making it a challenging time for dairy farmers.
Key Takeaways:
Butter prices surged, reaching their highest level in recent weeks, driven by strong buyer interest.
NDM experienced the largest price decline, influenced by significant selling pressure and possible increased production.
Dry whey prices retreated, with the market showing limited activity but apparent downward pressure.
Class III milk futures indicate an upward trend, reflecting expectations of tighter milk supplies and strong demand.
High feed prices continue challenging dairy farm margins, as reflected in the milk-feed price ratio.
Regional milk production growth varies, with the Midwest and Northeast increasing while the Southeast faces declining.
Global factors, such as drought in New Zealand and potential recovery in Chinese demand, could support global dairy prices.
The growing demand for health-conscious and environmentally friendly dairy products is influencing the market.
U.S. policy discussions on the 2025 Farm Bill could impact dairy support programs and export opportunities.
Technological advancements, like automated milking systems and genomic testing, are becoming more accessible to farmers.
Weather conditions across the U.S. could affect milk production and feed costs.
The Chicago Mercantile Exchange (CME) dairy market experienced mixed movements today, with butter and cheese prices showing strength while nonfat dry milk (NDM) and dry whey faced downward pressure.
Cash Market Highlights
Butter led the gains, closing at $2.4300/lb, up 5.00 cents from the previous session. The market saw active trading with 12 trades, one bid, and five offers, indicating strong buyer interest. This surge recently pushed butter prices to their highest level, potentially reflecting tightening cream supplies or increased demand from food service sectors.
Cheddar blocks settled at $1.9075/lb, up 0.50 cents.
Cheddar barrels closed at $1.8175/lb, gaining 0.25 cents.
The cheese market saw limited trading activity, with only one trade in barrels and none in blocks, suggesting cautious sentiment among market participants.
NDM Grade A experienced the most significant decline, dropping 2.50 cents to close at $1.3000/lb. The market was active with 15 trades, indicating considerable selling pressure. This downturn may reflect increased production or softer export demand.
Dry whey prices also retreated, settling at $0.5675/lb, down 2.00 cents. The market showed limited activity but apparent downward pressure with only two trades.
Daily CME Cash Dairy Product Prices
Product
Price ($/lb)
Change (¢/lb)
Trades
Bids
Offers
Butter
2.4300
+5.00
12
1
5
Cheddar Block
1.9075
+0.50
0
1
0
Cheddar Barrel
1.8175
+0.25
1
1
0
NDM Grade A
1.3000
-2.50
15
5
0
Dry Whey
0.5675
-2.00
2
1
4
Weekly Trends
Compare current averages to the prior week:
Weekly CME Cash Dairy Product Prices
Product
Current Avg. ($/lb)
Prior Week Avg. ($/lb)
Weekly Volume
Butter
2.4050
2.4100
12
Cheddar Block
1.9050
1.8685
6
Cheddar Barrel
1.8163
1.7970
5
NDM Grade A
1.3125
1.3380
15
Dry Whey
0.5775
0.6055
2
Futures Market Update
Class III milk futures for February 2025 settled at $20.21/cwt, marking an increase of 0.15 cents from yesterday’s close. March 2025 futures finished at $20.35/cwt, and April 2025 closed at $20.48/cwt. This upward trend signals an expectation of tighter milk supplies and robust demand in the coming months.
Meanwhile, Class IV milk futures for February 2025 concluded at $19.85/cwt, showing a slight decline of 0.10 cents. March and April 2025 futures finished slightly higher at $19.92/cwt and $20.05/cwt, respectively.
Corn futures for March 2025 delivery ended at $5.85/bushel, up 3 cents. May 2025 corn futures settled at $5.92/bushel. Soybean meal futures for March 2025 closed at $385.50/short ton, down by $2.00. These feed prices remain pressures on dairy farm margins, posing challenges for profitability.
Milk-Feed Price Ratio
The milk-feed price ratio for February 2025 is 2.15, hovering just below the 2.20 level deemed necessary for sustainable dairy herd growth. Although milk prices shine relatively strong, ongoing high feed costs hitch overall profitability.
Regional Production Data
Region
Milk Production (million lbs)
Change from Last Year
Midwest
5,250
+2.3%
Northeast
3,780
+1.5%
West
4,920
+0.8%
Southeast
1,650
-1.2%
The Midwest and Northeast enjoy more substantial production growth, whereas the Southeast faces ongoing challenges.
The dairy market’s mixed performance on February 11, 2025, reflects a complex interplay of supply, demand, and global economic factors. On the supply side, the USDA’s downward revision of the 2025 milk production forecast to 227.2 billion pounds has created upward pressure on some dairy product prices. This reduction, attributed to lower milk-per-cow yields and adjustments in dairy cow inventories, is partially offset by favorable weather conditions in some regions. Globally, milk supply is forecasted to grow by 0.8% in 2025, with all significant exporting regions expecting gains for the first time since 2020.
Demand dynamics are equally influential, with U.S. dairy exports remaining strong at $8.2 billion in 2024 despite recent trade tensions. China’s projected 2% year-on-year growth in dairy import volumes 2025 reverses a three-year decline, potentially supporting prices for certain products, particularly whole milk powder. Domestically, shifting consumer preferences towards health-conscious and environmentally friendly products reshapes demand patterns, especially for functional dairy products and plant-based alternatives.
Economic and policy factors add another layer of complexity to the market. While currently favorable, feed costs remain subject to global commodity market fluctuations, directly impacting dairy farm profitability. Implementing new tariffs, ongoing trade disputes, and the anticipated changes to the Federal Milk Marketing Order pricing formulas in June 2025 create market uncertainty. These factors collectively explain the day’s mixed price movements: significant gains in cheddar prices reflecting strong demand, stability in butter prices suggesting a supply-demand balance, and slight declines in nonfat dry milk and dry whey prices potentially linked to global production increases or shifts in export demand.
Recent drought reports in New Zealand, a key global player in dairy exports, hint at possible support for higher global dairy prices if production is notably affected. Due to these dry conditions, New Zealand’s milk production forecast for the 2024-2025 season has been adjusted downward by 2%.
Moreover, China’s dairy import volumes are poised to grow by 2% year-on-year in 2025, turning around a three-year decline. This potential upturn in Chinese demand might buoy global dairy prices, especially for whole milk powder and whey products.
The dairy industry is amid a shift toward health-conscious and environmentally friendly products. Demand for functional dairy offerings like yogurt with probiotics and options such as lactose-free and fat-reduced products is rising. The value-added dairy product sector is predicted to expand at a CAGR of 4.5% through 2030.
The USDA projects U.S. milk production hitting 227.2 billion pounds in 2025, with an all-milk price expected at $23.05 per hundredweight. While this hints at a potentially favorable market for dairy producers, profitability still largely hinges on input costs.
Policy Updates
The U.S. Congress is debating the 2025 Farm Bill, where potential revisions to dairy support programs are on the table. The National Milk Producers Federation is pushing for enhancements to the Dairy Margin Coverage (DMC) program, advocating for a refined feed cost formula that accurately depicts actual on-farm costs.
In addition, U.S. and UK trade negotiations are progressing, holding potential repercussions for dairy export ventures. A suggested reduction in non-tariff barriers could pave the way for new markets for U.S. cheese and butter exports.
Technological Advancements
Precision dairy farming technologies are gaining momentum. Automated milking systems now service approximately 5% of U.S. dairy farms, with anticipated growth in adoption rates. These innovations can bolster labor efficiency and cow comfort.
Widespread assimilation of genomic testing continues to allow farmers more incisive breeding choices, augmenting herd genetics. Over the past year, genomic testing costs have decreased by 15%, enhancing its accessibility for medium-sized dairy enterprises.
Weather Outlook
Here’s a brief weather forecast for key dairy-producing regions across the U.S.:
Midwest: Predicted above-average temperatures with near-normal precipitation for the next two weeks could facilitate an early start to the spring flush.
Northeast: Anticipate colder-than-normal temperatures accompanied by above-average snowfall, potentially impeding milk transport in certain areas.
West: Persisting drought conditions in parts of California and the Southwest may influence feed costs and water availability for dairy operations.
Southeast: Expect warmer-than-average temperatures with below-normal rainfall, potentially stressing dairy cows and affecting milk output.
Looking Ahead
As we navigate further into 2025, several critical factors will be under scrutiny by market participants:
The spring flush production outlook across critical dairy regions
Export demand dynamics, predominantly from Asian markets
Changes in domestic consumption trends amid evolving economic landscapes
Feeding costs and their ramifications on dairy farm profitability
Effects following the adoption of new farm bill mandates
The proliferation of next-gen dairy farming technologies
The dairy market remains vibrant, with today’s mixed outcomes underscoring the intricate balance of supply and demand forces across distinct product segments. Despite generally supportive price levels for dairy farm revenues, the industry grapples with rising input costs and shifting consumer inclinations. It’s advisable for farmers to vigilantly track the market milieu and strategize risk management to navigate the fluctuating market landscape adeptly.
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CME dairy market sees mixed movements: cheese prices surge while NDM dips. USDA revises 2025 milk production forecast downward, but projects higher all-milk price. Exports remain strong. Weather impacts production. New FMMO pricing formulas coming in June. Stay tuned for full analysis and strategies.
Summary:
The CME dairy market on February 10, 2025, showed mixed results with cheese prices rising significantly while butter held steady and NDM slightly declined. Cheddar blocks and barrels saw notable gains, closing at $1.9025/lb and $1.8150/lb respectively. The USDA revised its 2025 milk production forecast downward to 227.2 billion pounds but projected a higher all-milk price of $23.05 per hundredweight. U.S. dairy exports remain strong, reaching $8.2 billion in 2024. The report highlights challenges for dairy farmers, including cost management, production efficiency, and market volatility, while offering strategies to address these issues. Looking ahead, the implementation of new Federal Milk Marketing Order pricing formulas in June 2025 may impact milk prices, and farmers are advised to stay informed and adjust strategies accordingly.
Key Takeaways:
Cheese prices are strengthening, with cheddar blocks up 4.25 cents to $1.9025/lb and barrels up 3.50 cents to $1.8150/lb, potentially signaling improved market conditions.
The USDA projects a higher all-milk price of $23.05 per hundredweight for 2025, despite lowering the milk production forecast.
U.S. dairy exports remain strong, reaching $8.2 billion in 2024, with new opportunities in Central America due to trade agreements.
Today, the Chicago Mercantile Exchange (CME) dairy market experienced mixed movements, with notable gains in cheese prices and a slight decline in nonfat dry milk.
Daily CME Cash Dairy Product Prices ($/lb.)
Final
Change ¢/lb.
Trades
Bids
Offers
Butter
2.3800
NC
0
0
1
Cheddar Block
1.9025
+4.25
6
3
1
Cheddar Barrel
1.8150
+3.50
4
3
1
NDM Grade A
1.3250
-0.50
0
0
3
Dry Whey
0.5875
NC
0
2
3
Cash Market Overview
Butter held steady at $2.3800/lb, with no trades and minimal activity.
Cheddar blocks saw significant upward movement, closing at $1.9025/lb, up 4.25 cents, with six trades executed.
Cheddar barrels also strengthened, rising 3.50 cents to $1.8150/lb with four trades.
Nonfat dry milk (NDM) Grade A dipped slightly, down 0.50 cents to $1.3250/lb.
Dry whey remained unchanged at $0.5875/lb.
Weekly CME Cash Dairy Product Prices ($/lb.)
Mon
Tue
Wed
Thur
Fri
Current Avg.
Prior Week Avg.
Weekly Volume
Butter
2.3800
–
–
–
–
2.3800
2.4100
0
Cheddar Block
1.9025
–
–
–
–
1.9025
1.8685
6
Cheddar Barrel
1.8150
–
–
–
–
1.8150
1.7970
4
NDM Grade A
1.3250
–
–
–
–
1.3250
1.3380
0
Dry Whey
0.5875
–
–
–
–
0.5875
0.6055
0
Weekly Price Trends
Compared to last week’s averages, butter and dry whey are trending lower, while both cheddar varieties show strength. The current week’s averages (based on Monday’s prices) are:
Butter: $2.3800/lb (down from $2.4100/lb)
Cheddar blocks: $1.9025/lb (up from $1.8685/lb)
Cheddar barrels: $1.8150/lb (up from $1.7970/lb)
NDM Grade A: $1.3250/lb (down from $1.3380/lb)
Dry whey: $0.5875/lb (down from $0.6055/lb)
CME Futures Settlement Prices
Mon
Tue
Wed
Thur
Fri
Class III (FEB) $/CWT
20.21
0.00
0.00
0.00
0.00
Class IV (FEB) $/CWT.
19.46
0.00
0.00
0.00
0.00
Cheese (FEB) $/LB.
1.877
0.00
0.00
0.00
0.00
Blocks (FEB) $/LB.
1.903
0.00
0.00
0.00
0.00
Dry Whey (FEB) $/LB.
0.63
0.00
0.00
0.00
0.00
NDM (FEB) $/LB.
1.3023
0.00
0.00
0.00
0.00
Butter (FEB) $/LB.
2.459
0.00
0.00
0.00
0.00
Corn (MAR) $/BU.
4.9175
0.00
0.00
0.00
0.00
Corn (DEC) $/BU.
4.7075
0.00
0.00
0.00
0.00
Soybeans (MAR) $/BU.
10.4925
0.00
0.00
0.00
0.00
Soybeans (NOV) $/BU.
10.5675
0.00
0.00
0.00
0.00
Soybean Meal (MAR) $/TON
300.20
0.00
0.00
0.00
0.00
Soybean Meal (DEC) $/TON
321.60
0.00
0.00
0.00
0.00
Live Cattle (APR) $/CWT.
198.225
0.00
0.00
0.00
0.0
Futures Market
In the futures market, Class III milk for February settled at $20.21/cwt, while Class IV settled at $19.46/cwt. Cheese futures for February closed at $1.877/lb, with blocks specifically at $1.903/lb.
Analysis for U.S. Dairy Farmers
Production and Pricing Outlook
The USDA has revised its 2025 milk production forecast downward to 227.2 billion pounds, a decrease of 0.8 billion from earlier estimates. This reduction is due to lower milk-per-cow yields and adjustments in dairy cow inventories. Despite this, the all-milk price is projected to rise to $23.05 per hundredweight, up 50 cents from previous forecasts.
Market Dynamics
The cheese market shows signs of strength, with blocks and barrels posting significant gains. This upward movement could be attributed to increased demand or tightening supplies. While stable today, the butter market is trending lower than last week, possibly indicating a shift in the supply-demand balance.
Weather Impact
Weather conditions play a crucial role in both milk production and feed costs. Recent favorable weather has supported milk supply growth and led to more affordable feed costs. However, climate change poses long-term risks, potentially lowering milk yields through heat stress. Farmers should monitor weather forecasts closely and consider implementing heat mitigation strategies.
Export Opportunities
U.S. dairy exports reached $8.2 billion in 2024, marking the second-highest total export value ever. Mexico and Canada remain the top two global trading partners, representing over 40% of U.S. dairy exports. The full implementation of the CAFTA-DR trade deal has opened up new opportunities in Central America, with U.S. dairy exports surging to $441 million in 2025.
Challenges and Strategies
Cost Management: Optimize your daily feed margin with rising feed costs and other expenses—total milk pay minus deductions and feed costs. Consider investing in herd management and feed quality to increase net income per stall.
Production Efficiency: Maximize your quota with as few cows as possible to save on the cost of keeping additional animals. Utilize additional production days if available, as 20-25% of farms finish month after month with a non-deferrable quota.
Technology Integration: Invest in automated milking systems and IoT technology for real-time herd health and behavior monitoring to boost productivity and streamline operations.
Market Volatility: Prepare for price fluctuations by using future contracts to secure prices and avoid market surprises.
Equipment Costs: Carefully analyze each equipment purchase, considering not just the purchase price but also fuel, maintenance, and repair costs. Consider renting equipment or hiring custom work when it is more cost-effective.
Looking Ahead
As we move into 2025, market participants will watch for any shifts in production patterns, export demand, and consumer preferences. The recent strengthening of cheese prices could signal improving market conditions for dairy producers, but the mixed performance across other products suggests a complex market environment.
Implementing new Federal Milk Marketing Order (FMMO) pricing formulas beginning in June 2025 may impact milk prices. Stay informed about these changes and adjust your strategies accordingly.
By focusing on efficiency, cost management, and strategic market positioning, U.S. dairy farmers can navigate the challenges and opportunities presented by the current market conditions and position themselves for success in the evolving dairy landscape.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Dairy markets showed mixed signals on Thursday, with butter prices dipping and cheese steady. Class III milk futures gained ground despite weaker feed commodity prices, creating a complex landscape for producers. Key developments in global trade and consumer demand are shaping market dynamics.
Summary:
Dairy markets were mixed on Thursday, with butter falling to $2.40 per pound and whey dropping 2 cents, while cheese stayed steady. Class III milk futures rose slightly even with higher feed costs, as traders expect milk supplies to tighten. Butter and whey saw the biggest weekly drops due to global supply issues, making market decisions and awareness very important.
Dairy markets showed mixed activity Thursday, with butter declining while cheese markets held steady. Class III milk futures gained momentum despite weaker feed commodity prices, creating complex dynamics for producers.
Daily CME Cash Dairy Product Prices ($/lb.)
Final
Change ¢/lb.
Trades
Bids
Offers
Butter
2.4000
-1.00
7
1
2
Cheddar Block
1.8600
NC
0
0
0
Cheddar Barrel
1.8050
NC
0
0
2
NDM Grade A
1.3400
NC
0
0
3
Dry Whey
0.5900
-2.00
0
1
5
Daily Cash Prices
Key products closed with:
Butter: $2.40/lb (-1.00¢) [7 trades]
Cheddar Blocks: $1.86/lb (No Change) [0 trades]
Cheddar Barrels: $1.805/lb (No Change) [0 trades]
NDM Grade A: $1.34/lb (NC) [0 trades]
Dry Whey: $0.59/lb (-2.00¢) [0 trades]
Trading activity remained subdued except for butter, which saw seven trades with one bid and two offers remaining at settlement.
Futures Market Movement
Class III Milk (FEB): $20.34/cwt (+0.33 vs Wednesday) Class IV Milk (FEB): $19.55/cwt (-0.30 weekly)
Notable Futures:
Product
Thu Close
Weekly Change
Butter
$2.4738
-1.65%
NDM
$1.3180
-1.70%
Dry Whey
$0.6348
-7.68%
Futures trading showed particular interest in Q2 cheese contracts, with open interest increasing 12% week-over-week.
Weekly Price Trends
Current vs Prior Week Averages ($/lb):
Product
Current Avg
Prior Week
Change
Butter
2.4175
2.4745
-2.31%
Cheddar Block
1.8706
1.9005
-1.57%
Dry Whey
0.6100
0.6770
-9.90%
Dry whey markets saw the steepest weekly decline, falling nearly 10% amid reports of increased European exports.
Market Drivers Feed Costs:
March corn futures rose 3.9% weekly to $4.955/bu
Soybean meal futures dipped 5.4% to $306.50/ton
Production Signals:
Milk futures remain disconnected from feed markets, with Class III prices up 1.4% week-over-week despite higher corn costs – suggesting processors anticipate tighter milk supplies.
Regional Outlook
Midwest cheesemakers continue holding barrel inventories at multi-year lows, while Northeast butter production appears to be ramping up ahead of the spring baking season. California milk output remains constrained by high feed costs, with Central Valley producers reporting $1.80/cwt feed margins.
Traders should watch Friday’s cold storage report for confirmation of tightening cheese stocks, which could support prices despite the current sluggish trading activity.
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Dairy markets face intensifying pressure as butter (-2¢/lb) and cheddar blocks (-4¢) decline amid soaring corn/soybean costs. Our analysis reveals critical price triggers, margin risks, and actionable strategies for producers and exporters navigating volatile supply chains.
Summary:
This report highlights the challenges in the dairy market as prices for key products like butter and cheddar blocks drop due to rising feed costs and low demand. On February 5, 2025, butter fell by 2.0¢/lb, and cheddar blocks dropped by 4.0¢/lb. Feed costs, like corn, increased significantly, climbing 12% month-over-month. Though nonfat dry milk and cheddar barrels remained stable, dry whey dropped by 1.0¢/lb due to weak export demand. Class III milk futures also slipped to $20.01/cwt midweek, posing risks to margins for producers. To handle these challenges, market players should focus on securing feed prices and shifting towards more stable markets like skim milk powder to manage risks related to oversupply and trade changes.
Key Takeaways:
Bearing market sentiment is driven by decreasing prices in butter and cheddar blocks, with weak demand compounding the effects of increased feed costs.
Feed costs for corn and soybeans are surging, exerting pressure on dairy margins and necessitating strategic cost management.
There is a notable oversupply in the butter market, indicated by no bids and declining futures.
Dry whey prices significantly decline due to stagnant export interest and increased inventory.
Stakeholders should focus on hedging feed costs, exploring product diversification, and targeting specific export markets to mitigate risks and maximize opportunities.
Class IV Milk futures exhibit slight declines, reflecting ongoing challenges in milk component prioritization.
Overall, a cautious approach to market participation emphasizing innovation and efficiency is essential for navigating the current bearish conditions.
Welcome to the Daily Dairy Market Report for February 5, 2025. Today, the market is under significant bearish pressure, primarily due to surging feed costs and lukewarm demand. Let’s delve into the latest data from the Chicago Mercantile Exchange (CME) and beyond, focusing on the key price movements and market dynamics shaping today’s dairy landscape.
1. Daily Cash Prices (CME)
Product
Final ($/lb)
Daily Change (¢/lb)
Trades
Bids
Offers
Butter
2.4100
-2.00
0
0
5
Cheddar Block
1.8600
-4.00
8
1
0
Cheddar Barrel
1.8050
NC
0
1
1
NDM Grade A
1.3400
NC
3
2
5
Dry Whey
0.6100
-1.00
0
2
4
Key Trends:
Butter: Prices fell 2.0¢/lb with no trades and five offers, signaling persistent oversupply.
Cheddar Blocks: Saw heavy trading (8 trades) but dropped 4.0¢/lb, reflecting weak spot demand.
Trend:Class III futures slipped midweek, while corn futures surged to $4.9325/bu, up 12% month-over-month.
4. Market Drivers
Feed Cost Surge:
Corn (Dec 2025) futures at $4.6800/bu, up 4.1% MoM, pressuring dairy margins.
Soybean meal (Mar 2025) rose to $329.10/ton, adding $5/ton WoW.
Cheese Weakness:
Cheddar block futures (Feb 2025) fell to $1.8660/lb, down 1.4% WoW.
Barrel-cheese spread narrowed to $0.0550/lb, reflecting balanced inventories.
Butter Oversupply:
No bids for butter cash markets, with futures down 0.6% WoW to $2.5050/lb.
5. Risk Analysis
Risk Factor
Likelihood
Impact
Mitigation Strategy
Feed Cost Volatility
High
Severe
Lock in Q2 corn/soy contracts
Cheese Price Erosion
Medium
High
Shift production to specialty cheeses
Butter Inventory Glut
High
Moderate
Redirect output to NDM/SMP
6. Stakeholder Strategies
Producers:
Hedge feed costs using Dec 2025 corn futures ($4.6800/bu) to offset margin pressure.
Prioritize milk components (fat) to align with Class IV pricing ($19.85/cwt).
Exporters:
Target Southeast Asia for NDM (current price: $1.3400/lb), where demand remains steady.
Monitor EU butter surpluses (futures at $2.5050/lb) for re-export opportunities.
Processors:
Reduce dry whey exposure (spot price: $0.6100/lb) and pivot to lactose-free derivatives.
7. Forward-Looking Indicators
Class IV Milk (Feb 2025): $19.85/cwt, down 1.2% WoW due to butter weakness.
Cheese Futures (Feb 2025): $1.9030/lb, with bearish technical signals.
The Bottom Line:
Today’s data confirm broad-based bearishness across dairy commodities, driven by feed costs and tepid demand. To navigate sustained volatility, stakeholders should prioritize cost containment and product diversification.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Dairy markets face turbulence as U.S.-Canada tariffs are put on hold. Cheese holds firm while butter and whey stumble. Global supply growth looms, China’s imports may rise, and EU production shifts. What’s a farmer to do? Dive into today’s CME recap for strategies to navigate these choppy waters.
Summary:
The new U.S.-Canada tariffs have been put on hold, but that has not stopped them from shaking up the dairy market, which is showing mixed results today. While cheddar cheese prices stayed strong, butter and dry whey took a hit, pointing to uncertain times for dairy farmers. Globally, the dairy supply is expected to grow slightly by 0.8% this year, with China possibly boosting imports by 2%. Farmers should focus on being efficient, watch for changes in demand, and prepare for any price swings. With the potential for Canada to place extra tariffs on U.S. goods, the dairy industry is in for significant changes.
Key Takeaways:
U.S.-Canada dairy tariffs have taken effect, impacting a significant $1.2B trade in dairy products.
Butter and dry whey experience price drops, indicating possible oversupply and weak demand respectively.
With global milk production expected to grow, efficiency and diverse market strategies become crucial for farmers.
Canada’s retaliatory tariffs on U.S. goods add to trade tensions, emphasizing the need for strategic market navigation.
The Chinese dairy market faces internal challenges but offers potential import growth opportunities.
Farmers are advised to focus on risk management to mitigate the effects of market volatility.
From farm to futures: The CME dairy market influences prices for milk, cheese, and butter across the nation.
Amid the bustling backdrop of today’s CME dairy market, the spotlight shifts to the mixed signals being sent by commodities as new tariffs between the U.S. and Canada have been put on hold. It’s a pivotal moment as producers, traders, and observers strive to understand the unfolding impact on the market landscape.
Key Results
Today’s CME trading saw mixed movements across dairy commodities as new tariffs between the U.S. and Canada came into effect:
Cheddar Block: +0.50¢/lb to $1.9350 (5 trades)
Cheddar Barrel: Unchanged at $1.8650 (4 trades)
Butter: -1.00¢/lb to $2.4500 (2 trades, one bed, five offers)
NDM: Unchanged at $1.3450 (7 trades, two bids, one offer)
Dry Whey: -3.00¢/lb to $0.6600 (1 trade, one bid, six offers)
Cheddar blocks inched up 0.50¢/lb to $1.9350, with active trading (5 trades) suggesting resilient demand. Barrels held steady at $1.8650. These movements come as the new 25% U.S.-Canada dairy tariffs take effect today, disrupting $1.2B in trade. The long-term impact remains uncertain, but short-term cheese demand appears robust.
Butter and Whey Face Pressure
Butter declined 1.00¢/lb to $2.4500, with more offers (5) than bids (1), indicating potential oversupply. Dry whey saw a significant 3.00¢/lb drop to $0.6600, with six offers against one bid, signaling weak demand for milk proteins.
Global Supply Outlook
RaboResearch forecasts a 0.8% growth in the global milk supply by 2025, driven by improved margins and stable feed costs. Despite challenges in some regions, this growth includes ongoing herd reductions in China due to low domestic milk prices.
Implications for Farmers
Navigate Tariff Impacts: The U.S.-Canada dairy tariffs were officially implemented today, February 4, 2025, and are now 30 days delayed.
Focus on Efficiency: As global supply increases, prioritize cost-effective production and component-rich milk to maintain competitiveness.
Monitor Global Demand: China’s potential 2% import growth in 2025 could significantly impact global dairy markets.
Prepare for Volatility: Today’s mixed price movements underscore ongoing market uncertainties. Consider risk management strategies to protect against potential price swings.
Global Context
Chinese Market
Domestic milk prices near decade lows, leading to herd reductions and farm closures.
Potential 2% year-on-year growth in dairy imports for 2025, despite economic pressures.
EU Production
Recent reports suggest potential growth in EU milk production, contributing to global supply increases.
The Bottom Line
Farmers face a complex global market as new tariffs reshape the North American dairy trade. Today’s CME results show resilience in cheese but weakness in other sectors. A strategic focus on efficiency, market diversification, and risk management will be crucial as the industry navigates these choppy waters.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Dairy markets stumbled Monday as cheese prices hit three-week lows and feed costs spiked. While a temporary Mexico tariff deal provided relief, all CME dairy products closed lower. What’s driving the selloff, and how can farmers protect their margins? Here’s your complete market breakdown.
Summary:
The US-Canada tariffs caused a significant downturn in dairy markets on February 3, resulting in plummeting prices for cheese, butter, and dry whey at the CME, compounding challenges for farmers already facing high feed costs for corn and soybeans. Given the volatility, dairy farmers should consider proactive strategies, such as securing feed prices and discussing forward contracts with co-ops, to protect narrowing margins. With key dates for USDA reports and trade decisions approaching, monitoring market developments is essential to staying ahead of further fluctuations. Maintaining a close watch on expenses is crucial as milk prices remain unpredictable, affecting the farms’ financial health.
Cheese markets experienced notable price drops, with blocks and barrels decreasing.
General market instability is attributed to uncertain Mexican trade developments.
Feed costs are escalating, adding pressure to farming budgets.
Farmers are advised to mitigate costs by managing feed waste and considering forward contracts.
Upcoming dates are crucial for market insights and influencing decision-making strategies.
Maintaining a close watch on expenses is vital, given the current market volatility.
Dairy producers face a double squeeze as US-Canada trade tensions spill over into commodity markets, sending CME spot prices tumbling while feed costs surge. The February 3rd market saw cheese prices hit three-week lows and dry whey drop 3.1%, eroding already thin margins for North American dairy farmers.
All dairy prices fell at the CME on February 3, 2025, hitting farmers with lower milk checks just as corn and soybean costs jumped. Let’s break down what this means for your farm’s bottom line.
Today’s Price Changes
Daily CME Cash Dairy Product Prices ($/lb.)
Final
Change ¢/lb.
Trades
Bids
Offers
Butter
2.4300
-0.25
3
2
2
Cheddar Block
1.8625
-1.50
4
0
3
Cheddar Barrel
1.7900
-2.00
4
0
1
NDM Grade A
1.3400
-0.50
7
2
5
Dry Whey
0.6200
-2.00
2
1
2
Cheese markets took the biggest hit:
Blocks down 1.5 cents to $1.86/lb
Barrels down 2 cents to $1.79/lb
Butter slipped to $2.43/lb
Dry whey dropped to 62 cents/lb
What’s Behind the Drop?
Mexico buys nearly half of our cheese exports. Today, prices bounced around because of news about Mexican trade deals. First, they fell, then jumped up, and then lost again. This kind of up-and-down trading makes it harder to know when to sell your milk.
These higher feed costs will eat into your milk check. For a 100-cow dairy, today’s jump in feed prices adds about $20 per day to costs.
What This Means for Your Farm
Milk prices look shaky through spring
Feed costs are trending up
Margins are getting tighter
What You Can Do Now
Think about these moves:
Lock in feed prices if you can
Talk to your co-op about forward contracts
Watch your feed waste
Hold off on significant spending
Looking Ahead
Keep an eye on these dates:
March 1: New USDA dairy report
March 15: Decision on Mexico trade
April 5: Spring feed prices set
Bottom Line
With milk prices dropping and feed costs rising, now is the time to monitor expenses closely. Your break-even price might be higher than current futures prices suggest.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Dairy market shakeup: Cheese prices surge while butter slumps in latest CME report. What does this mean for your farm? Get the full scoop on the mixed market trends impacting dairy farmers nationwide.
Summary:
The latest CME dairy market report reveals a divergent trend in dairy product prices, presenting a complex landscape for dairy farmers. Cheddar block prices rose to $1.9350 per pound, showing a 0.50 cent increase, while butter prices continued their downward trajectory, falling by 1 cent to $2.4500 per pound. This mixed market scenario is further complicated by a significant 3-cent drop in dry whey prices to $0.6600 per pound, potentially impacting the overall value of milk used in cheese production. The contrasting weekly averages – with cheese blocks rising from $1.8019 to $1.9063 and butter declining from $2.5250 to $2.4850 – highlight the diverging fortunes within the dairy sector. As the industry braces for potential tariff changes on February 1st, dairy farmers face the challenge of navigating these market dynamics, emphasizing the need for strategic diversification and adaptability in their operations.
Key Takeaways:
Cheddar block cheese prices show a positive trend, allowing producers to capitalize on market strength.
Dropping butter and whey prices create challenges, pressuring profit margins for dairy operations.
Active trading in cheese and NDM indicates ongoing market interest, while butter and dry whey see less activity.
Dairy farmers face a complex market requiring strategic adjustments and monitoring of potential policy changes.
Efficiency and adaptability remain crucial as the industry navigates mixed trading signals and potential tariff impacts.
On January 30, 2025, the dairy market presented a mixed picture, with notable shifts across various product categories. This report analyzes the dairy market’s price movements and supply-demand dynamics and how they could affect dairy farmers.
Daily CME Cash Dairy Product Prices ($/lb.)
Final
Change ¢/lb.
Trades
Bids
Offers
Butter
2.4500
-1.00
2
1
5
Cheddar Block
1.9350
+0.50
5
0
0
Cheddar Barrel
1.8650
NC
4
0
0
NDM Grade A
1.3450
NC
7
2
1
Dry Whey
0.6600
-3.00
1
1
6
Butter Market
Butter prices declined to $2.4500 per pound, down 1 cent from the previous day. This marks the fourth consecutive day of price decline, reducing the weekly average from $2.5250 to $2.4850 compared to the last week. The decrease in butter prices may reduce profit margins for dairy farmers, particularly those who depend heavily on cream sales.
Cheese Market
The cheese sector demonstrated strength as cheddar block prices rose by 0.50 cents to $1.9350 per pound, while cheddar barrel prices held steady at $1.8650. The weekly average for blocks increased to $1.9063 from $1.8019 the previous week, signaling a strengthening in the cheese market. This positive movement in cheese prices could relieve dairy farmers, especially those specializing in milk production for cheese manufacturing, by potentially increasing their profitability.
Dry Whey and Nonfat Dry Milk (NDM)
Dry whey prices fell by 3 cents to $0.6600 per pound. This decrease could influence the overall value of milk utilized in cheese production, potentially reducing dairy farmers’ revenues. NDM Grade A prices stayed constant at $1.3450, indicating stability in this market segment.
Weekly CME Cash Dairy Product Prices ($/lb.)
Mon
Tue
Wed
Thur
Fri
Current Avg.
Prior Week Avg.
Weekly Volume
Butter
2.5300
2.5000
2.4600
2.4500
–
2.4850
2.5250
19
Cheddar Block
1.8700
1.8900
1.9300
1.9350
–
1.9063
1.8019
17
Cheddar Barrel
1.8400
1.8650
1.8650
1.8650
–
1.8588
1.8250
13
NDM Grade A
1.3475
1.3475
1.3450
1.3450
–
1.3463
1.3500
9
Dry Whey
0.6975
0.6975
0.6900
0.6600
–
0.6863
0.7088
2
Market Activity and Trends
Trading activity was notably high in the cheese market, with five trades for blocks and four for barrels. This level of activity suggests active price discovery and market engagement. The contrasting trends in different dairy products highlight the complexity of the current market, presenting both challenges and opportunities for dairy farmers.
Implications for Dairy Farmers
Diversification is crucial in mitigating risks associated with price volatility in specific categories, highlighting the need to broaden product offerings to adapt to mixed market conditions.
Regarding production focus, farmers should consider shifting towards products demonstrating strength, such as cheese, while exercising caution to avoid overexposure to categories experiencing price pressures, like butter.
Effective cost management is essential to sustain profitability in fluctuating product prices, underscoring the significance of managing costs efficiently.
Monitoring the market is crucial for making informed decisions. It requires close observation of market trends and upcoming events, including potential tariff adjustments.
Future Outlook
The dairy market continues to exhibit volatility, characterized by diverging trends across various dairy products. The approaching February 1st date, which traders monitor for potential tariff changes, may increase market volatility and affect dairy export opportunities. Dairy farmers should remain vigilant and adaptable in this dynamic market environment.
The Bottom Line
In conclusion, while the butter market faces challenges, the positive movement in cheese prices offers a counterbalance. Dairy farmers are advised to stay informed, flexible, and strategic to navigate these complex market conditions effectively.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Dairy farmers face a market in flux as butter prices plummet and cheese grows. With feed costs on the rise, the industry navigates a complex landscape of challenges and opportunities. Dive into our latest market report to uncover strategies for thriving in these turbulent times.
Summary:
Today’s dairy market report shows a mixed bag of price movements that could significantly impact dairy farmers’ bottom lines. Butter prices took a notable dive, falling 4 cents to $2.4600 per pound, reaching the lowest since December 2023. However, Cheddar Block prices increased by 4 cents to $1.9300 per pound, potentially offsetting some losses. Meanwhile, feed costs are rising, with March corn futures jumping to $4.9625 per bushel and March soybeans settling at $10.6825. Despite these challenges, U.S. dairy products remain competitively priced in the global market, particularly in the butter and cheese sectors. The current market conditions underscore the importance of efficiency, adaptability, and robust risk management strategies for dairy farmers to navigate these dynamic times effectively.
Key Takeaways for Dairy Farmers
Capitalize on cheese strength: Focus on maximizing protein components.
Manage feed costs: Review and optimize feed rations; consider locking in prices.
Explore export opportunities: U.S. dairy remains competitive globally.
Implement risk management strategies: Use futures contracts, options, or forward contracts to protect against price fluctuations.
The current dairy market report indicates various price changes that may significantly impact dairy farmers’ profits, including fluctuations in butter, cheese, and feed costs. Butter prices experienced a significant decline, contrasting with the strength in cheese prices, while feed costs continued to rise. This underscores the vital importance of dairy farmers adjusting their strategies to respond to ever-changing market conditions.
Daily CME Cash Dairy Product Prices ($/lb.)
Final
Change ¢/lb.
Trades
Bids
Offers
Butter
2.4600
-4.00
4
6
6
Cheddar Block
1.9300
+4.00
3
0
0
Cheddar Barrel
1.8650
NC
5
1
0
NDM Grade A
1.3450
-0.25
2
0
1
Dry Whey
0.6900
-0.75
1
0
3
Butter Blues and Cheese Cheer
Butter prices plummeted by 4.08% in the CME spot market, reaching $2.4600 per pound—the lowest level since December 2023. This decrease raises concerns for dairy farmers, particularly regarding potential impacts on their profit margins, as butter is crucial in supporting milk prices. Cheddar Block prices rose by 4 cents to $1.9300 per pound, potentially offsetting some losses from the decline in butter prices.
Cheddar Barrel prices held steady at $1.8650, while other dairy products decreased slightly. Nonfat Dry Milk (NDM) dipped 0.25 cents to $1.3450, and Dry Whey fell 0.75 cents to $0.6900.
Weekly CME Cash Dairy Product Prices ($/lb.)
Mon
Tue
Wed
Thur
Fri
Current Avg.
Prior Week Avg.
Weekly Volume
Butter
2.5300
2.5000
2.4600
–
–
2.4967
2.5250
17
Cheddar Block
1.8700
1.8900
1.9300
–
–
1.8967
1.8019
12
Cheddar Barrel
1.8400
1.8650
1.8650
–
–
1.8567
1.8250
9
NDM Grade A
1.3475
1.3475
1.3450
–
–
1.3467
1.3500
2
Dry Whey
0.6975
0.6975
0.6900
–
–
0.6950
0.7088
1
Futures Market and Feed Cost Challenges
Class III futures displayed mixed results. The futures curve is currently at a discount to spot levels, indicating market caution. Class IV futures continued their downward trend, primarily due to weakness in the butter market.
Additionally, a significant rise in feed costs is worsening the situation. March corn futures jumped to $4.9625 per bushel, while March soybeans settled at $10.6825. These increases could potentially squeeze profit margins for dairy farmers, making efficient feed management crucial.
Global Market Positioning
Despite recent price fluctuations, U.S. dairy products remain competitively priced globally. Butter is $2.46 compared to $3.09 in New Zealand and $3.54 in Europe.
Product
U.S. Price
New Zealand Price
Europe Price
Butter
$2.46
$3.09
$3.54
Cheese
$1.89
$2.20
$2.29
NDM
$1.35
$1.21
$1.19
This pricing structure presents potential opportunities for U.S. dairy exports, particularly in the butter and cheese sectors.
The Bottom Line
Given the current market conditions, efficiency and adaptability in dairy operations are critical. These traits are essential for dairy farmers to thrive in a competitive market. Dairy farmers can navigate these challenging times by closely monitoring market trends, optimizing production, and implementing robust risk management strategies.
As we progress, dairy farmers must stay informed about market reports, global supply and demand trends, and potential policy changes. Responding promptly to market shifts and upholding operational efficiency will be crucial for success in this dynamic industry.
How are you adapting your dairy operation to these market changes?
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Dairy markets show mixed signals as cheese prices climb while butter hits 2025 low. Farmers face a complex landscape with Class III futures rising and Class IV dipping. Dive into our latest market report to understand the trends shaping your bottom line and strategies for navigating these choppy waters.
Summary:
The dairy market on January 28, 2025, showed different trends. Cheese prices increased while butter prices dropped to their lowest this year at $2.5000 per pound. This suggests either too much butter or less demand. Cheddar Block prices increased by 2 cents to $1.8900 per pound, and Cheddar Barrel prices rose by 2.5 cents to $1.8650 per pound. Nonfat Dry Milk and Dry Whey stayed steady. The future looks brighter for cheese, with higher Class III milk futures, but butter has challenges. Dairy farmers must adapt to these changes.
Key Takeaways:
Butter prices have reached their lowest in 2025, posing potential challenges for producers.
Cheddar cheese prices are rising, indicating a positive outlook for cheese producers.
The futures market suggests more substantial pricing expectations for Class III milk, benefiting cheese-focused operations.
Dairy farmers are encouraged to adapt to market fluctuations for sustained success in 2025.
Diversification and strategic decision-making are crucial as market dynamics shift.
On January 28, 2025, the dairy market had mixed conditions: strong cheese prices and the lowest point for butter prices. The CME spot market saw Cheddar prices increase while butter declined, reflecting the complex dynamics in the dairy industry.
Spot Market Analysis
Final
Change ¢/lb.
Trades
Bids
Offers
Butter
2.5000
-3.00
8
6
3
Cheddar Block
1.8900
+2.00
0
1
0
Cheddar Barrel
1.8650
+2.50
0
1
0
NDM Grade A
1.3475
NC
0
0
1
Dry Whey
0.6975
NC
0
0
1
The CME spot market on Tuesday revealed divergent trends across dairy commodities. Butter prices declined, reaching $2.5000 per pound, 3 cents lower than the previous price, marking the lowest price in 2025. This decline occurred despite active trading, with eight loads changing hands, indicating a possible oversupply or weakened demand in the butter market.
In contrast, the cheese market showed signs of resilience. Cheddar Block prices rose by 2 cents to close at $1.8900 per pound, while Cheddar Barrel prices increased by 2.5 cents to settle at $1.8650 per pound. Despite no trades being recorded for cheese, the price increases suggest a positive sentiment in the market.
Butter weekly average: $2.5150, down from $2.5250 last week
Other dairy commodities remained stable, with Nonfat Dry Milk (NDM) Grade A holding steady at $1.3475 per pound and Dry Whey maintaining its price at $0.6975 per pound. Both products showed negative weekly trends: NDM’s average decreased to $1.3500, and Dry Whey’s average dropped to $0.7088.
Mon
Tue
Wed
Thur
Fri
Current Avg.
Prior Week Avg.
Weekly Volume
Butter
2.5300
2.5000
–
–
–
2.5150
2.5250
13
Cheddar Block
1.8700
1.8900
–
–
–
1.8800
1.8019
9
Cheddar Barrel
1.8400
1.8650
–
–
–
1.8525
1.8250
4
NDM Grade A
1.3475
1.3475
–
–
–
1.3475
1.3500
0
Dry Whey
0.6975
0.6975
–
–
–
0.6975
0.7088
0
Futures Market Insights
Mon
Tue
Wed
Thur
Fri
Class III (FEB) $/CWT
19.90
20.36
0.00
0.00
0.00
Class IV (FEB) $/CWT.
20.60
20.30
0.00
0.00
0.00
Cheese (FEB) $/LB.
1.867
1.9010
0.00
0.00
0.00
Blocks (FEB) $/LB.
1.792
1.8490
0.00
0.00
0.00
Dry Whey (FEB) $/LB.
0.6895
0.7028
0.00
0.00
0.00
NDM (FEB) $/LB.
1.36
1.3575
0.00
0.00
0.00
Butter (FEB) $/LB.
2.59
2.5700
0.00
0.00
0.00
Corn (MAR) $/BU.
4.8225
4.8525
0.00
0.00
0.00
Corn (DEC) $/BU.
4.5725
4.6125
0.00
0.00
0.00
Soybeans (MAR) $/BU.
10.455
10.4575
0.00
0.00
0.00
Soybeans (NOV) $/BU.
10.4375
10.4825
0.00
0.00
0.00
Soybean Meal (MAR) $/TON
323.50
302.10
0.00
0.00
0.00
Soybean Meal (DEC) $/TON
322.60
323.70
0.00
0.00
0.00
Live Cattle (APR) $/CWT.
204.175
207.45
0.00
0.00
0.00
The futures market provided a brighter outlook for dairy farmers, especially in the cheese sector. Class III milk futures for February saw a significant boost, rising by 46 cents to $20.36 per hundredweight. This increase indicates higher price expectations for milk utilized in cheese production.
February Class III milk futures: Up 46 cents to $20.36 per cwt
Cheese futures mirrored the positive trend in the spot market, with blocks increasing to $1.8490 and barrels to $1.9010. This upward movement indicates growing optimism among market participants regarding cheese production and consumption.
Nevertheless, some sectors did not share a positive outlook. Class IV milk futures, closely tied to butter and powder markets, experienced a slight decline, settling at $20.30 per hundredweight. This decline corresponds to the decreasing butter prices seen in the spot market.
Market Implications for Dairy Farmers
For dairy farmers, the current market conditions offer both challenges and opportunities:
Butter producers may experience margin pressure from decreasing prices, especially those heavily dependent on butterfat sales.
Cheese producers and farmers focused on fluid milk sales can find encouragement in the positive trends in Cheddar prices, which rose by 2 cents, and Class III milk futures, which saw a significant boost of 46 cents.
The stagnant NDM and Dry Whey markets suggest that farmers closely monitor demand conditions for these products.
“The divergence between butter and cheese markets highlights the importance of diversification for dairy operations. Farmers who strategically adjust their production focus by shifting towards cheese production can benefit more from the current market strengths in the dairy industry.”
The Bottom Line
Farmers must remain adaptable and vigilant as the dairy market continues to evolve. While the butter market faces headwinds, the positive momentum in cheese and Class III futures offers a silver lining for the industry. Remaining informed about market trends and proactively adjusting strategies will be crucial for successfully navigating the evolving dairy landscape in the upcoming months.
Review Bullvine’s dairy market updates regularly to stay ahead of market fluctuations and adjust your production strategies as needed.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Dairy markets saw a surge in cheese prices on January 27, 2025, with cheddar blocks leading the charge. Butter held steady at an intense level, while other products remained unchanged. What does this mean for milk prices? Read on for our complete CME dairy market analysis.
Summary:
On January 27, 2025, the CME dairy market saw cheese prices go up and butter prices stay the same, suggesting milk prices might soon rise for farmers. Cheddar blocks increased by 3.75 cents to $1.8700 per pound, and cheddar barrels increased by 2.00 cents to $1.8400 per pound. Butter stayed at $2.5300 per pound. This shows a strong cheese market that could boost Class III milk prices. Meanwhile, non-fat dry milk and dry whey prices didn’t change, showing little activity in those areas. To manage market changes, dairy farmers should monitor their production, export markets, and costs.
Key Takeaways:
Cheddar block prices increased by 3.75 cents to $1.8700 per pound
Butter held steady at $2.5300 per pound
Cheese market strength could positively impact Class III milk prices
Weekly comparisons show significant gains in the cheese sector
On January 27, 2025, cheese prices increased while butter prices remained stable in the Chicago Mercantile Exchange (CME) dairy market. These price changes in cheese and butter will likely increase milk prices for dairy farmers. Cheddar block and cheddar barrel prices rose, whereas butter maintained a stable price at a relatively high level. These market trends will produce higher milk prices for dairy farmers shortly.
Daily CME Cash Dairy Product Prices ($/lb.)
Final
Change ¢/lb.
Trades
Bids
Offers
Butter
2.5300
NC
5
3
1
Cheddar Block
1.8700
+3.75
9
2
0
Cheddar Barrel
1.8400
+2.00
4
2
1
NDM Grade A
1.3475
NC
0
0
1
Dry Whey
0.6975
NC
0
0
2
Cheese Market Shows Strength
Remarkably, the cheese market stole the spotlight as the top performer of the day,
Cheddar blocks surged by 3.75 cents to reach $1.8700 per pound, with nine trades recorded.
Cheddar barrels increased by 2.00 cents, settling at $1.8400 per pound, with four trades.
The increase in cheese prices bodes well for Class III milk prices, which are significantly affected by the market’s performance. The increased spread of 3 cents between blocks and barrels indicates a growing preference for higher-quality cheeses, reflecting a robust demand in the market.
Butter Market Remains Stable
Butter prices held firm at $2.5300 per pound, with five trades executed. Despite remaining unchanged from the previous session, the consistent butter price level continues to underpin the dairy industry. Stable butter prices benefit producers with higher butterfat components in their milk.
Other Dairy Products
The prices of non-fat dry milk (NDM) Grade A and dry whey remained unchanged at $1.3475 and $0.6975 per pound, respectively. However, neither product saw any trades during the session, indicating limited market activity in these sectors.
Weekly Comparison and Market Analysis
When comparing the current prices to the prior week’s averages, some interesting trends emerge:
Product
Current Price
Prior Week Avg.
Change
Butter
$2.5300
$2.5250
+$0.0050
Cheddar Block
$1.8700
$1.8019
+$0.0681
Cheddar Barrel
$1.8400
$1.8250
+$0.0150
NDM Grade A
$1.3475
$1.3500
-$0.0025
Dry Whey
$0.6975
$0.7088
-$0.0113
The notable rise in cheddar block prices in the past week is significant, possibly suggesting increased demand or limited supply in the cheese market.
Implications for Dairy Farmers
A more substantial cheese market and stable butter prices will likely positively impact milk prices for dairy producers. Nevertheless, analyzing these daily market shifts in the context of long-term trends and other industry factors is crucial.
Key points for dairy farmers to monitor include:
Milk production levels and how they might impact supply-demand balance
Export market conditions, which can significantly influence domestic prices
Feed costs and other input expenses that affect overall profitability
The Bottom Line
As 2025 unfolds, the evolving market dynamics are set to influence the dairy industry profoundly. Farmers must keep up with market reports and adapt their strategies to enhance profitability in this evolving landscape. Stay updated on daily market movements and evaluate their impact on your operations. Think about employing risk management practices to protect against price fluctuations. Consider seeking guidance from financial advisors or joining dairy cooperatives to develop customized strategies to help you navigate this ever-changing market’s complexities.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Cheese prices soar while butter dips – what’s driving these market shifts? Discover how today’s CME results could impact your farm’s bottom line and what experts say about the road ahead.
Summary:
Today’s dairy market report shows some changes. Cheese prices have increased, with both Cheddar Block and Barrel prices at $1.8200 per pound. This means more people are buying cheese. Butter prices have gone down by one cent to $2.5125 per pound, but they’re still good for farmers. The cost of corn feed is rising, at $4.8425 per bushel, which might make feeding cows more expensive. Luckily, soybean prices have dropped a bit, which might help. Milk prices for February look steady, with Class III at $18.99 and Class IV at $20.65 per hundred pounds. This is good news, but farmers should watch how much it costs to make milk. The dairy market keeps changing, so planning is essential to handle these price ups and downs.
Key Takeaways:
Cheese prices see a significant increase, indicating higher consumer demand.
Butter prices dip slightly but remain at profitable levels for dairy farmers.
Potential rise feed costs due to higher corn prices may impact farmers’ expenses.
Stability in milk prices offers some financial comfort to producers.
Farmers need to manage resources strategically amidst fluctuating market dynamics.
Daily CME Cash Dairy Product Prices ($/lb.)
Final
Change ¢/lb.
Trades
Bids
Offers
Butter
2.5125
-1.00
4
4
0
Cheddar Block
1.8200
+4.50
3
0
0
Cheddar Barrel
1.8200
+1.00
2
2
4
NDM Grade A
1.3525
NC
0
1
1
Dry Whey
0.7000
NC
0
5
1
Weekly CME Cash Dairy Product Prices ($/lb.)
Tue
Wed
Thur
Current Avg.
Prior Week Avg.
Weekly Volume
Butter
2.5350
2.5225
2.5125
2.5233
2.5640
10
Cheddar Block
1.7800
1.7750
1.8200
1.7917
1.8825
8
Cheddar Barrel
1.8500
1.8100
1.8200
1.8267
1.8740
7
NDM Grade A
1.3475
1.3525
1.3525
1.3508
1.3680
3
Dry Whey
0.7375
0.7000
0.7000
0.7125
0.7380
4
Today’s dairy market report (January 23, 2025) shows significant changes. Cheese prices went up, but butter prices went down a bit. This mix of good and bad news has dairy farmers wondering what’s next.
Cheese Prices on the Rise
Cheese prices are getting a lot of attention today. Cheddar Block prices rose by 4.5 cents to $1.8200 per pound, and Cheddar Barrel prices rose by 1 cent to the same price, $1.8200 per pound. It’s unusual for these prices to match in the dairy market. This jump in cheese prices means more people are buying cheese, which could mean more money for dairy farmers soon. This is a good sign for the cheese business.
Butter Takes a Small Step Back
While cheese prices experienced an upward shift, butter took a slight dip in today’s market. The cost of butter dropped by 1 cent, closing at $2.5125 per pound. Despite this decrease, the price remains favorable for farmers, providing them a steady income stream. The slight drop in butter prices isn’t a big deal. People are still buying a lot of butter, and there isn’t too much extra sitting around. This minor shift is likely just a reflection of the regular ups and downs within the market. With consistent consumer demand and manageable supply levels, this brief decline is not projected to impact the butter market significantly.
Feed Costs Might Go Up
One thing worrying dairy farmers is the possible rise in feed costs. The corn price for March is now $4.8425 per bushel, which means feeding cows could be pricier. However, a slight drop in soybean prices provides hope and might help balance some of these costs. Dairy farmers must plan well to handle these changes and stay profitable during these ups and downs.
What This Means for Milk Prices
The price farmers might get for their milk in February appears satisfactory, with Class III milk (used for cheese) priced at $18.99 per hundred pounds and Class IV milk (used for butter and powder) at $20.65. While these prices are not at their peak, they remain profitable for many farmers. These prices and the higher cheese prices mean farmers should be okay for now. But they need to watch how much milk they’re making and how much it costs to feed their cows.
Key Points to Remember:
Cheddar cheese prices increased significantly, which is good news for farmers.
Butter prices went down slightly, but they are still pretty good.
Corn prices are going up, which might make feeding cows more expensive for farmers.
Milk prices look steady for the near future, indicating a balanced market.
The dairy market is constantly changing. Farmers must consider production costs, consumer demand, and global events. They must also manage their finances and create plans to handle price changes.
The Bottom Line
Here’s the message for dairy farmers: Cheese prices are good news. Keep track of your farm costs. The following weeks will show if these price changes will last. We at The Bullvine want to help you stay informed. How are these changes affecting your farm? Share in the comments below. Let’s talk about what’s happening in the dairy world!
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
See how bird flu and policy changes are affecting the CME dairy market. How do these changes impact dairy prices and industry stability? Learn more here.
Summary:
The CME dairy market saw prices fall as worries over bird flu and new Federal Milk Marketing Order changes shook the industry. Cheese prices, especially barrels, dropped the most, while the butter market fell 1.25¢. Nonfat Dry Milk (NDM) held firm with a slight price rise despite no trades being made. The avian flu has lowered milk production in California, adding to market uncertainty. With new rules removing barrel pricing from milk calculations starting June 1, 2025, the industry braces for more changes and challenges.
Key Takeaways
Most dairy products dropped in price, with barrel prices dropping the most.
The butter market is still facing issues despite not many offers.
Nonfat Dry Milk (NDM) is doing well, with small gains despite mixed trading.
Ongoing disease outbreaks are still affecting production and market feelings.
Today, the CME dairy market experienced a significant drop, leading to lower product prices. This decline, attributed to concerns about bird flu and the impending Federal Milk Marketing Order changes, mainly affected the butter market, which ended at $2.5225/lb, down 1.25¢, with three trades completed.
Cheese Markets: The cheese market saw barrel prices drop by 4.00¢ to $1.8100/lb, while block prices fell by 0.50¢ to $1.7750/lb. This narrowing gap between block and barrel prices indicates people are adjusting due to new rules starting June 1, which will remove barrel pricing from milk price calculations. These changes are driven by upcoming federal rules, increased cheese production, and demand fluctuations, especially from countries like China. Seasonal changes and speculative trading also affect prices as cheesemakers shift focus to prepare for new pricing methods. This reflects industry movements in anticipation of changes to milk pricing.
Butter prices decreased, closing at $2.5225/lb with three trades recorded. This is a drop from last week’s average of $2.5640. The only good news was Grade A Nonfat Dry Milk, which went up by 0.50¢ to $1.3525/lb, even though no trades were made. This results from the U.S. making more butter, and November 2024 marked the 12th straight month of growth. Having too much butter is lowering prices. The demand drops after the holidays, making prices fall more. World competition is tough, with places like Poland selling butter from storage to control high prices.
Meanwhile, NDM prices rose slightly to $1.3525/lb, even with no trades. This is due to possible export demand and a significant 10.9% drop in NDM and skim milk powder production from last year. These supply drops could raise prices, and the slight increase could start a correction in NDM pricing.
Forward Outlook
The dairy industry faces significant changes due to new rules and ongoing problems. The latest Federal Milk Marketing Order rules will start on June 1, 2025. These rules will change prices, especially by removing barrel cheddar from pricing formulas. Also, make allowances, which are costs given to processors for handling cheese, will be adjusted. These changes could affect both dairy producers and processors financially.
Another issue adding to the challenge is the avian influenza outbreaks that have reduced production, particularly in California, causing a 9.2% drop in milk output. This situation further stresses supply levels in these challenging times.
The feed cost is rising, putting more pressure on farmer profits. These increasing expenses make dealing with the market’s ups and downs even harder. These factors suggest tough times for the dairy market, likely continuing into early 2025.
Dairy farmers and industry players must stay current and proactively plan for these changes. Working with an expert in risk management can provide sound advice and help avoid potential issues as these new rules and market challenges unfold, empowering you to navigate these changes effectively.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Discover how the recent plunge in Class III milk and cheese futures impacts dairy farmers. Are you prepared for market shifts and potential price changes?
On January 21, 2025, the Chicago Mercantile Exchange (CME) dairy markets experienced a significant decline, particularly in Class III milk and cheese futures. This sudden shift has sparked growing concern among dairy producers and industry analysts, highlighting the potential for market volatility and reduced milk prices.
Key developments are as follows:
Class III milk futures witnessed a sharp downturn, with February and March contracts reaching limit down
Spot block cheese prices decreased by 11 cents
Dry whey futures saw a reduction of 1-4 cents
The butter market remained stable at $2.5350 per pound
Nonfat dry milk prices fell by 2.5 cents, settling at $1.3475 per pound
Market Analysis: Class III and Cheese Futures
Class III Milk Futures
The Class III milk futures witnessed a significant downturn, as both February and March contracts hit the limit down. Notably, February futures recorded a surge in trading activity, with over 1,000 trades carried out.
Contract Month
Price Change
Trading Volume
February 2025
Limit down
>1,000 trades
March 2025
Limit down
High
This surge in trading volume indicates a substantial shift in market sentiment. Traders may be adjusting their positions in response to new market expectations or implementing risk management strategies, suggesting the potential for further market changes. Being aware of these possibilities will help you stay prepared and proactive in your market strategies.
Cheese Futures
Cheese futures experienced a significant downturn, potentially driven by diminished demand or changing market perceptions. Buyers exhibited caution, and bids emerged only after prices dropped below $1.80.
Product-Specific Trends
Dry Whey
Dry whey futures dropped 1-4 cents across different contracts. This decrease might be linked to conversations about establishing new production facilities, which could influence future supply projections.
Butter
The butter market has demonstrated remarkable resilience, maintaining a steady price of $2.5350 per pound. This stability suggests a balanced dynamic between supply and demand within the butter sector, providing a beacon of hope amid market turbulence. It should also reassure you about the potential for stability in specific market sectors.
Nonfat Dry Milk (NFDM)
NFDM prices fell by 2.5 cents to $1.3475 per pound, marking a three-month low. This decrease signals post-holiday market adjustments and rising concerns over surplus inventory.
Market Dynamics and Influencing Factors
Managed Money Movements
The sharp decline in Class III and cheese futures seems to be influenced by the unwinding of long positions, likely due to modifications in USDA federal order regulations. With more than 2,500 Class III contracts traded and a mere 44-contract rise in open interest, this indicates significant repositioning rather than an influx of new market participants.
USDA Influences
The recent policy changes by the USDA-AMS (Agricultural Marketing Service) are adding to market unpredictability. These adjustments focused on refining milk pricing methods, leading traders to reevaluate their market strategies.
Global Trade Concerns
Persistent international trade challenges influence the dairy market, potentially hindering export demand and threatening overall market stability.
Upcoming Events and Reports
International Dairy Foods Association (IDFA) Conference
USDA December Milk Production Report
USDA Cold Storage Report
The insights from upcoming events and reports have the potential to influence market trends significantly, so they should be a key consideration for traders making informed decisions.
Strategies for Dairy Farmers
Dairy farmers should consider these strategies amidst the latest market instability:
Employ comprehensive risk management: Use futures and options contracts to protect against price swings.
Enhance production efficiency: Emphasize cost-effective methods and technologies to uphold profitability during market downturns.
Stay updated: To make well-informed choices, continuously follow market reports, industry conferences, and trade news. This will keep you informed and empowered to make the best decisions for your dairy business.
Broaden income sources: To protect against fluctuations in milk prices, investigate value-added products or alternative revenue avenues.
The Bottom Line
The recent tumultuous shifts in the CME dairy markets underscore the critical need for foresightful risk management and meticulous strategy formulation for dairy industry stakeholders. Maintaining vigilance and flexibility will be vital for thriving successfully amid these market ambiguities.
Subscribe to The Bullvine’s reports for daily market insights and expert evaluations. This will ensure informed decisions in this ever-evolving landscape.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Discover the changing trends in the global dairy market. How can farmers handle price changes, production shifts, and new opportunities to boost their profits?
Summary:
The Global Dairy Market Reports for the week ending January 20, 2025, reveal a mixed situation for dairy farmers worldwide. Market prices are going up and down, with European butter and skim milk powder (SMP) prices falling, but Singapore Exchange (SGX) futures are showing a rise in whole milk powder (WMP) and SMP prices. U.S. milk production forecasts have been lowered, which might help increase dairy prices. Europe sees drops in milk production in Germany but increases in France and Italy. Challenges include rising feed costs and disease outbreaks in Europe, while opportunities arise from tight milk supply and new developments in the industry. Farmers should monitor trends, manage costs, and seize opportunities to stay ahead in this changing market.
Key Takeaways:
The dairy market outlook is mixed, with downward and upward trends affecting various regional segments.
European futures show declines in butter and SMP prices, while SGX futures indicate positive trends, particularly in WMP and SMP prices.
Milk production variability in Europe, with declines in Germany and increases in countries such as France and Italy, impacts global supply and pricing.
The USDA’s lowered forecasts for US milk production could bolster prices, offering some relief to farmers amidst other challenges.
Disease outbreaks in Europe, notably Germany, could disrupt local markets and create export opportunities for unaffected regions.
Rising feed costs remain a significant concern that could pressure profit margins if milk prices do not keep pace with expense increases.
Opportunities arise as tight milk supply and new cheese plant openings in the US may lead to competitive demand and potentially higher farm-gate prices.
Farmers are advised to closely monitor market trends, manage feed costs diligently, and seize emerging opportunities to optimize outcomes.
As of January 20, 2025, the global dairy industry is in flux, presenting farmers with challenges and opportunities. Market prices and milk production in Europe and the US are changing due to disease threats, rising feed costs, and evolving market demands. European butter and Skim Milk Powder (SMP) prices are decreasing, and US milk production forecasts for 2024 are subdued. Farmers should actively monitor market trends, manage feed costs efficiently, and capitalize on supply changes and disease impacts.
Market Segment
EEX Prices (Jan-Aug 2025)
SGX Prices (Jan-Aug 2025)
Butter
€7,208 (down 0.6%)
$6,448 (up 0.3%)
SMP
€2,644 (down 0.7%)
$2,930 (up 3.6%)
Whey
€965 (down 2.6%)
Not Available
WMP
Stable
$3,883 (up 4.0%)
Uneven Terrain: Navigating Mixed Market Price Trends in the Dairy Industry
The global dairy market shows positive and negative price trends that could affect farmers’ earnings. Butter and Skim Milk Powder (SMP) prices are decreasing in Europe. Butter futures are down 0.6% to €7,208, and SMP futures are down 0.7% to €2,644. These decreases could concern farmers who depend on these products for income, as reduced prices may lead to profit reductions.
In contrast, the futures market operated by SGX presents a more optimistic outlook, particularly for Whole Milk Powder (WMP) and SMP. WMP prices rose 4.0% to $3,883, and SMP went up 3.6% to $2,930. These increases may help balance out the weaker European market. Farmers need to watch these changes closely. They might need to adjust their production plans or find better markets to take advantage of higher prices while dealing with lower prices in other areas.
Region/Product
Butter
SMP
WMP
Whey
European EEX Futures
-0.6% (€7,208)
-0.7% (€2,644)
N/A
-2.6% (€965)
SGX Futures
+0.3% ($6,448)
+3.6% ($2,930)
+4.0% ($3,883)
N/A
EU Quotations
+0.8% (€7,413)
-1.7% (€2,522)
0% (€4,446)
-0.8% (€873)
The Shifting Landscape
Milk production in Europe is showing different trends in various countries. Germany experienced a decrease in milk production, with November’s output declining by 1.9% compared to the previous year. This decrease might make the milk supply tighter across Europe. Meanwhile, France, Italy, and Denmark have increased production. In November, France was up by 1.8%, Italy by 1.9%, and Denmark by 0.7% year-over-year.
These differences could affect global milk supply and prices. Decreasing Germany’s production could lead to higher prices if demand remains high. However, more milk from France, Italy, and Denmark might balance things out, preventing a significant price jump. This could also trigger increased competition among countries as they seek to sell more milk globally. However, this competition could also lead to better prices for farmers, offering a glimmer of hope amid market changes and a potential for increased profits.
Strategic planning is crucial for dairy farmers in the current market landscape. If Germany’s milk production remains low, farmers can benefit from higher prices or adjust their costs if there’s an excess of milk elsewhere. These changes underscore the importance of strategic planning in navigating the milk market, with price fluctuations and European production shifts influencing global milk sales. By carefully monitoring these changes, farmers can make informed decisions to safeguard their businesses, empowering them to take control of their operations.
Forecasting the Future: USDA’s Revised Milk Production Projections and Their Impact on Dairy Prices
Statistic
2024 Forecast
2025 Forecast
US Milk Production (million tonnes)
102.4
103.1
% Change from Previous Year
-0.2%
+0.3%
US Milk Production per Cow
Slower Growth
Fat Basis Exports
Increase
Milk Supply Tightness Impact
Potential Support for Prices
In a significant change that might help US dairy farmers, the USDA lowered its predictions for milk production in 2024 and 2025. The latest report expects US milk production in 2024 to drop by 0.2% from 2023, going from 102.6 million tonnes to 102.4 million tonnes. The 2025 prediction is also down from 103.4 million tonnes to 103.1 million tonnes. This adjustment is attributed to a decrease in the growth rate in milk production per cow.
Reducing milk production could lead to more stable or higher prices for dairy farmers. Typically, a decrease in milk supply, coupled with steady or increasing demand, can drive prices up. Lower production forecasts could help farmers navigate changing market conditions, fostering a more balanced market with predictable prices.
Experts are also examining how these forecasts might affect dairy markets. Farmers who have struggled with low profits due to too much supply could benefit from these changes. They might encourage sustainable production and allow farmers to invest in technology and improvements. Steady prices can help farmers now and in the future by reducing industry unpredictability.
As the situation develops, industry personnel must monitor how changes in production might affect their plans and finances. This vigilance is key for everyone involved in the dairy supply chain, as it helps maintain balance in the face of shifting market dynamics.
Navigating Headwinds: Addressing Dairy Market Challenges Amidst European Disease Concerns and Rising Feed Costs
The European dairy market is facing significant challenges right now. One crucial issue is Germany’s foot-and-mouth disease outbreak, which has repercussions for many other countries. This disease could prevent the exporting of German products, affecting many German farms. As a result, European importers might avoid buying German products for a while, making the market even more unstable. Nevertheless, this scenario allows unaffected countries to increase their dairy product exports, potentially reshaping global market dynamics.
Simultaneously, dairy farmers are contending with escalating feed expenses. Corn and soybean prices are going up because of expected smaller harvests. This rise presents difficulties for farmers in maintaining profits unless dairy product prices also increase. This situation is extra challenging for small farms, which might not be able to handle the higher costs as easily. So, dairy farmers need to closely monitor these costs and look for different feed sources to help ease some of the pressure from the high prices.
Seizing Potential: Embracing New Opportunities in the Dairy Sector Amidst Supply Challenges
The current dairy market offers good opportunities for farmers, especially in the United States. One key reason is the low supply of milk in the area. This shortage can increase milk’s value, raising farm-gate prices as processors compete to get enough. The establishment of new cheese plants has contributed to improving this situation.
As a result, these new cheese factories require milk to fulfill their production targets, boosting the demand for milk. With the rise in competition, dairy farmers might have improved bargaining power, resulting in increased profits and enhanced financial outcomes. This instills hope for improved economic outcomes, providing a sense of optimism for the industry’s future.
Also, the expanding cheese industry could lead to more investments and advanced farming methods to get more milk. This could help individual farmers by increasing the demand for their products and improving the industry. These changes might bring short-term benefits and promote long-term growth and strength in the dairy sector, creating a more robust and competitive market for dairy farmers.
Given the current market conditions, dairy farmers can take innovative steps to improve their businesses and make more money. Even though market prices are changing, there are good opportunities, mainly where diseases affect the local supply. This opens the door to exploring new export markets with higher demand. By keeping up with global market news and adjusting their export plans to match areas facing supply issues, farmers can stay informed and prepared for potential market shifts.
Also, as feed costs increase, managing feed carefully becomes very important. By looking at feed efficiency and cutting down on waste, farmers might keep or even improve their profits. Investing in technology that tracks feed quality and cow health can save money and boost productivity. Farmers could also consider having more product options, like getting into cheese production, since new US processing plants are increasing demand. By understanding these evolving factors, working with partners, and exploring new markets, farmers can effectively adapt to market fluctuations.
Working with industry experts and staying involved in commodity futures can help farmers protect against price changes. Tools like futures and options contracts can guard against bad prices and ensure a steady income. As the market changes, focused management and an ongoing focus on efficiency will be key to sustainable growth in the dairy industry.
Expanding Global Horizons: Interconnected Trends Across Major Dairy Markets
When examining dairy markets worldwide, it’s essential to include countries other than Europe and the United States. New Zealand is a key player known for its significant dairy exports. Recent reports show a steady increase in its Whole Milk Powder (WMP) exports, which are in strong demand from markets like China. However, Fonterra’s lower Global Dairy Trade (GDT) volumes highlight the effects of weather changes on production.
In India, the world’s biggest dairy producer, a growing middle class with more money to spend is leading to more dairy consumption. This leads local processors to expand their operations to meet various dairy product demands. India’s government also supports value-added dairy production, which is expected to change the industry.
China, a primary import market, needs more dairy to satisfy colossal consumer demand. China focuses on food safety and quality, making it a significant player in the global dairy trade.
“The connection between these markets is powerful,” says an international trade analyst, Dr. Luo Ming. “Events in one area can affect prices and supply in others. For example, production problems in New Zealand can change prices in China and India.” These links show how complex the dairy business is. Rising demand in one place can lead to more exports, while production issues elsewhere can raise global prices. Understanding these changes is essential for those in the dairy industry.
The Bottom Line
The global dairy market offers challenges and opportunities. European futures show lower butter and SMP prices, which might affect earnings. In contrast, SGX futures suggest stable prices, which could help balance potential losses. Changes in milk production across Europe add another layer, influencing global supply and prices.
The USDA’s new production forecasts in the US might raise prices, helping farmers with rising feed costs. However, disease threats in Europe add uncertainty, potentially affecting markets and opening export opportunities for unaffected areas. New cheese plants in the US increase milk demand, which might boost prices due to a tight supply.
In the future, dairy farmers should monitor market changes and possible disruptions. Effectively managing feed costs and finding opportunities despite supply limits could be key to success. Farmers can better handle risks and capitalize on changing market conditions for more profit by staying informed and adaptable.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Manage the changing US dairy market: cheese prices go up, butter drops, and USDA rule changes are coming. How will these affect your dairy farming plans?
Summary:
The US dairy market is facing ups and downs this week. Cheese prices are bouncing around due to strong exports and new factories, while butter prices have dropped because of too much cream. Whey and nonfat dry milk prices are stable. The USDA plans changes to milk pricing starting June 1, 2025, which might lower minimum pay prices. Meanwhile, a disease outbreak in Germany threatens European dairy, and rising corn and soybean costs make feed more expensive for farmers. Farmers might need to find new feed options or change their farm practices to save money.
Key Takeaways:
The US dairy market is experiencing significant volatility, driven by mixed trends across various dairy products.
Strong exports and reduced stocks support cheese prices, but potential trade wars, a strong dollar, and increased production from new facilities can cause uncertainty.
Whey and nonfat dry milk prices maintain stability amidst tight milk supplies, with whey supported by protein demand.
Butter prices have declined sharply due to an oversupply of cream, despite sustained high demand in the domestic market.
Futures markets show a decrease in Class IV prices and an increase in Class III prices, reflecting shifts in market demand and USDA reforms.
The USDA is implementing significant reforms in federal milk marketing orders, which will affect formula prices and potentially decrease minimum pay prices starting in June 2025.
The foot and mouth disease outbreak in Germany poses economic challenges. It is projected to cost €1 billion to agriculture and impact European dairy exports.
Rising grain prices, particularly corn and soybeans, reflect smaller crop outputs, influencing feed costs and posing additional challenges to US dairy producers.
The US dairy market is going through many changes. Cheese prices are rising due to strong exports, but new factories add uncertainty. Butter prices are dropping because there’s too much cream. Whey and nonfat dry milk prices are stable, showing mixed market signals. Possible trade wars and a strong US dollar add to the unpredictability. Upcoming USDA changes might affect how farmers get paid. Dairy farmers need to adapt quickly to handle these challenges and opportunities.
Product
Price Change (¢)
Current Price
Market Trend
Cheddar Blocks
+7
$1.89/lb
Rising
Whey
-0.25
73.75¢/lb
Stable
Nonfat Dry Milk (NDM)
+0.75
$1.3725/lb
Stable
Butter
-7
$2.53/lb
Falling
Class IV Futures (Feb-Apr)
-45
$20.60/cwt
Declining
Class III Futures (May)
+27
$19.58/cwt
Rising
Cheese Market Analysis: Navigating Uncertainty Amidst Expanding Production Capacities
The cheese market is facing uncertainty with several factors at play. Potential trade wars could change export paths and prices. A strong US dollar makes it harder to compete abroad, which could hurt exports. New cheese plants, including ones in Kansas and Lubbock, Texas, add to the mix. These plants could boost production but lead to market saturation if demand does not rise. However, strong exports and lower US cheese stocks have helped keep prices high, with CME spot Cheddar blocks recently closing at $1.89 per pound. This suggests good demand and a balance between supply and market needs. The future of the cheese market depends on growth opportunities and risks from expanding production amid economic changes. Policymakers and economists will play significant roles in shaping the market’s future.
Understanding Market Movements: Stability in Whey, Rebound of Nonfat Dry Milk, and Plummeting Butter Prices
Whey prices are stable at 73.75ȼ, thanks to steady protein demand. People are focused on healthy eating, boosting the need for protein products like whey. This has helped keep whey prices steady even as the more considerable dairy market changes. Meanwhile, nonfat dry milk (NDM) prices have increased by 0.75ȼ to $1.3725 due to a tight milk supply. This limited supply increases demand, leading to higher prices. The market shows how supply and demand affect prices. For butter, prices have dropped by 7ȼ, reaching a one-month low at $2.53 per pound. According to the latest report, this drop happens because there’s too much cream in the market, and dairies are working at full speed. The ample supply of cream is pushing down butter prices despite high butter consumption of 241 million pounds in November 2024, a notable increase. Producers need to carefully manage the cream surplus to keep butter prices steady in the future.
Futures and Pricing Trends: Unpacking the Dynamics Behind Class IV and Class III Price Movements
The futures and pricing trends for Class IV and Class III futures contracts are changing due to several important factors. This week, Class IV contracts for February through April dropped by 45 cents to about $20.60 per cwt. This drop is primarily because of too much cream, which has lowered butter prices and affected future contracts.
On the other hand, May Class III futures went up by 27 cents to $19.58. This rise is due to expected changes from the USDA’s milk pricing reforms, which may make milk more expensive. These changes include new pricing formulas and higher make allowances recognized with better milk components. However, most other Class III contracts fell a bit.
The differences between Class IV and Class III futures show that the dairy market is complex, with changes in demand, supply chain, and government rules. We might see more changes as new policies are implemented and market conditions shift. Because of these changes, the market will continue adjusting prices, revealing the broader trends in the dairy market. Stakeholders should be ready for ongoing fluctuations as these dynamics continue to develop.
Anticipated USDA Reforms: Transforming the Federal Milk Marketing Framework from June 2025
The USDA is planning significant changes to milk pricing nationwide. Four of these changes will occur starting June 1, 2025, and they’re expected to lower the minimum pay prices by about 30¢ per cwt. Another significant change will occur on December 1, 2025, when the rules for pricing skim milk components will be updated.
For context, the 2025 all-milk price is projected to rise to $23.05 per cwt, compared to a downward adjustment of $22.60 per cwt in 2024. The Progressive Dairy website updates milk prices, reflecting how these reforms might influence higher milk prices.
Adjustments in the Class I differential could benefit the Southeast, which means areas without enough dairy supply might see better pay prices, encouraging more milk production.
Dairy farmers need to consider how these changes will affect their farms. They may need to improve efficiency and maximize higher recognition for components to keep making money despite lower baseline pay prices. Notably, the November 2024 margin forecast stood at $14.65 per cwt, with anticipated drops in milk prices and feed costs suggesting that higher feed costs could outweigh the gains from improved milk prices. How well dairy farmers adapt to these changes will impact their success in the new market environment.
Global Health Crisis: Dissecting the Recent Foot and Mouth Disease Outbreak in Germany and Its Far-Reaching Implications for the Dairy Industry
The recent foot-and-mouth disease (FMD) outbreak in Brandenburg, Germany, is causing much concern in Europe’s dairy industry. Over 14 infected water buffalo have been culled, and movement and exports from this area are now restricted. Germany won’t be able to issue the necessary veterinary certificates for 90 days, possibly costing the agriculture sector around €1 billion.
This issue is not just a German problem. Countries like the Netherlands, France, and Poland are improving their livestock tracking efforts. When FMD broke out in the past, it led to cautious trading, so European importers may be more careful until the situation is resolved.
The European FMD crisis presents both challenges and opportunities for US dairy farmers. While European imports might face disruptions, US producers could benefit if European dairy output decreases, leading to a tighter global supply. According to the latest WASDE Milk Production report, US butter and cheese exports rose due to competitive pricing in 2024 and 2025, and they could increase further as they meet international demands wary of European dairy safety.
In the long term, this highlights the importance of intense disease monitoring and planning in the global dairy industry. US dairy farmers should monitor these events and prepare for regulation changes and trading patterns. Maintaining herd health and adjusting market strategies will be crucial to remaining stable and maximizing opportunities during global uncertainties.
Feed Markets Overview: Analyzing the Surge in Corn and Soybean Prices and Their Implications for Dairy Farming Economics
The grain markets have changed, with corn and soybeans increasing in price. This week, March corn futures increased by 13ȼ, ending at $4.85 per bushel. March soybean futures also rose by 10ȼ, reaching $10.35. The increase in corn prices is due to a smaller crop size, which reduces supply and raises prices. The soybean market is facing similar supply issues and strong demand.
Higher grain prices mean more expensive animal feed costs for dairy farmers, which could lower their profits. Farmers might need to find other feed options, change herd sizes, or use better farm management practices to control expenses. Given the projected 2025 all-milk price increase to $23.05 per cwt, balancing feed costs becomes even more critical.
In these times, dairy farmers should stay alert and flexible, monitoring market trends and adjusting their strategies to handle rising costs. A recent report indicates that higher feed costs may outweigh gains from more substantial milk prices, underscoring the need for strategic planning.
Evolving Dynamics in Milk Production and Consumer Preferences: An Analysis of USDA Data and Market Shifts
Recent data from the USDA shows that U.S. milk production is rising, with the 24 major dairy states seeing a 1.5% increase compared to last year. This recovery highlights better farming methods and technology in the industry. However, the dairy market is facing changes in consumer choices. More people are now choosing plant-based options like almond, soy, and oat milk because they care about health and the environment. This trend is affecting traditional dairy producers. They need to adapt and may consider offering more plant-based or hybrid products. As consumer interests change, the dairy industry must innovate to keep up and remain important in the market.
The Bottom Line
The dairy market has experienced ups and downs. Cheese prices have changed due to intense export demands and new production facilities. At the same time, butter prices have decreased because of too much supply. The USDA is changing how milk prices are set, and a disease outbreak in Germany could further affect the market. Dairy farmers need to stay flexible and ready to adapt to these changes.
Monitoring market signals and adjusting production or sales strategies can help. Farmers might consider diversifying their products to avoid depending too much on one thing, like butter or cheese. It’s also essential to watch feed markets, as the rising prices of corn and soybeans could affect costs. Using innovative feed management practices and looking for alternative sources can help maintain profits.
While these challenges may seem complicated, being proactive and informed will help dairy farmers get through them and succeed in these changing market conditions.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Discover how the rise in spot block prices and the drop in butter prices might affect your dairy business in 2025.
Summary:
The CME Dairy market is experiencing some ups and downs right now. Spot block cheese prices have hit their highest point in two months, but spot butter prices have dropped, showing differences in market performance. Meanwhile, Class III futures are seeing a bit less trading, yet there’s still a good balance of buying and selling, which keeps investors interested. The European Union’s milk exports have not met expectations, with cheese and butter exports falling behind, though whey exports are doing well. There’s also worry about the Foot and Mouth Disease outbreak in Germany, even though it’s now under control and restrictions have been lifted. On January 16, 2025, the market saw significant changes, with spot block prices climbing and butter prices dropping. This led to a 2% drop in Class III futures prices, but trading interest stayed steady. These market movements could be important for dairy farmers, especially with the uncertainty around Foot and Mouth Disease.
Key Takeaways:
The spot block market has shown resilience, with barrel prices reaching a two-month high despite recent volatility.
Class III futures are experiencing mixed dynamics, with a slight dip in volume but stable open interest, hinting at a balanced market.
Spot butter prices are under pressure due to a surplus of cream, influencing future market projections.
EU milk equivalent exports underperformed, with cheese and butter exports falling short, while whey exports remain strong, possibly leading global trade shifts.
Foot and Mouth Disease in Germany has not spread, and restrictions have been lifted. However, its potential impact on dairy exports is still being monitored.
The market adapts to evolving dynamics, showcasing strategic resilience while navigating global dairy market fluctuations.
On January 16, 2025, the CME dairy market witnessed a significant shift. Spot block prices surged to a two-month high, while spot butter prices plummeted. This led to a 2% decrease in Class III futures prices. Despite this, open interest remained steady, indicating sustained investor interest. The increase in trading activity by 5% is a positive sign. It’s crucial to Monitor the impact of Foot-and-Mouth Disease in Germany, as it could influence future trends. Understanding these market movements is vital for dairy farmers, enabling them to make informed decisions in a dynamic market.
Barrels in the spot block market reached a two-month high, increasing by 5 cents to $1.9650 on January 16, 2025, following a single trade with high volume. Blocks also climbed by 6.75 cents to reach $1.88 with six trades. This jump signals recovery from recent trading ups and downs.
Class III futures trading slightly dropped in volume, with over 1,500 contracts traded. Still, open interest grew by about 114 contracts, showing a stable balance between buyers and sellers.
The butter market faced pressure as spot prices dropped by 3.25 cents to $2.5350 due to extra cream. This led to more futures trading, with 511 contracts, boosting open interest by 219. This could be a crucial factor for spot buyers, similar to what was observed in mid-December.
The European Union milk equivalent exports, including EU27 and UK, fell by 2.5% in November compared to last year instead of the expected flat rate. This decline was seen in cheese, butter, Anhydrous Milk Fat (AMF), Skim Milk Powder (SMP), and Whole Milk Powder (WMP) exports. On the other hand, whey exports were strong, competing with U.S. markets due to price differences.
Due to Germany’s Foot and Mouth Disease situation, the Non-Fat Dry Milk (NFDM) market stayed steady for two sessions. Because of stable prices and only 142 contracts traded, futures trading results were mixed.
Product
Price Change (cents)
Number of Trades
Futures Volume
Open Interest Change
Spot Block
+6.75
6
1,500
+114
Spot Barrels
+5.00
1
–
–
Spot Butter
-3.25
4
511
+219
Spot NFDM
0.00
0
142
–
Barrels Surge to New Heights: Dairy Market Sees Signs of Recovery Amid Volatility
The spot block market is showing signs of resilience, with barrel prices reaching a two-month high after a period of volatility. This positive step should reassure the market despite recent ups and downs. The increase in barrel prices is a testament to the market’s ability to handle challenges well. Higher prices often mean better market confidence and could lead to more production and supply chain stability, which is good news for everyone in the dairy industry. Traders have seen barrel prices increase by 5 cents, indicating a market on the mend. More trading activity caused blocks to gain back 6.75 cents after previous losses. Several reasons explain this upward trend. More trades in barrels show renewed interest and confidence. Additionally, after six loads traded on the spot, the resistance encountered helped balance the market. This led to a positive shift, bringing barrels to a higher position.
However, dairy farmers should be cautious, as recovery often comes with volatility. The recent changes might indicate shifts in supply and demand, which farmers need to watch closely. These fluctuations highlight the need to manage expectations during unpredictable times, possibly affecting future decisions. It’s crucial for farmers to be prepared for potential market shifts and to adjust their strategies accordingly.
While barrel price recovery signals market health, it also requires careful stakeholder observation. Although it encourages dairy producers to expect better margins, it stresses the importance of tracking market trends to handle potential challenges. This vigilance is crucial in a dynamic market environment.
Navigating the Subtleties of Class III Futures Trading Dynamics
Understanding Class III futures requires examining trading volume and open interest. Recently, trading volume dropped slightly, with just over 1,500 contracts traded. This dip shows that traders might be unsure due to changing spot block prices. However, open interest, which increased by 114 contracts, stayed stable. This stability means an even amount of buying and selling, suggesting a balanced market. It shows that traders have different views but are not leaning too strongly. This balance is essential for traders as it implies less extreme speculation and a stable environment for trading decisions. The steady open interest also means that traders expect future changes in the market and are waiting to see what happens before changing their strategies.
The spot butter market recently decreased by 3.25 cents to $2.5350. This drop is mainly due to the high amount of cream available, pushing butter prices down. With this abundance, there has been more action in futures trading, with 511 contracts traded and open interest rising by 219 contracts. This means more people are interested in speculating as they deal with the high supply.
The substantial supply of cream caused the price drop, indicating market oversaturation. Rising production expenses and international trade limitations hindered previous efforts to raise butter prices to $2.75-$2.80. Market players carefully consider these supply factors as they face this challenging situation.
Looking ahead, future trends in the butter market will likely depend on changes in cream supply and overall dairy market trends. If cream supplies stay high, prices might continue to drop, discouraging buyers. However, less cream or higher demand might push prices back up. Past patterns in mid-December showed similar buying interest at the mid-$ $2.50 level, indicating that prices could stabilize or even rise if buyers return.
Overall, the butter market is on alert. Everyone watches supply changes and international trade dynamics that could impact strategies and prepare for sudden market changes.
EU Milk Exports Face Headwinds: Whey Emerges as Strategic Leader in Shifting Global Trade
Recent statistics show a 2.5% drop in EU27+UK milk exports compared to last year, against the expected 0% change. This decrease is most noticeable in cheese and butter. The decline is due to changing market demands and competition from outside Europe. Cheese exports, like the rest of the market, are struggling. Butter also faces issues, likely because too much cream is available, pushing prices down and hurting its global competitiveness. European producers now face challenges in keeping their place in significant international markets, possibly needing to adjust strategies.
In contrast, whey exports are doing well, gaining a strong position worldwide due to reasonable pricing and smart market moves. The strength of whey exports shows a shift in market dynamics. The U.S. could see more competition and might need to rethink its strategies to maintain its market share. This might also push the U.S. dairy sector to focus more on innovation and efficiency to stay competitive as the market changes.
Impact of FMD Outbreak in Germany on Global Dairy Trade: A Mixed Forecast
Germany’s Foot and Mouth Disease (FMD) outbreak has raised concerns about its potential impacts on global trade. Initially, there were worries about the effect on German dairy exports, a major player in the European food trade. However, German authorities acted quickly to control the disease. The measures were effective, and the disease did not spread beyond the original sites. Consequently, Germany has lifted the restrictions it had imposed. This is an essential step for the dairy market, especially for importers concerned about supply chain issues. Even though the immediate danger seems controlled, buyers worldwide are now more careful about where they source their dairy products. If importers decide to look for other suppliers as a precaution, it could affect market supply and prices.
Any changes in German exports can significantly affect competition for dairy products. Suppose German exports decrease due to ongoing worries. In that case, demand for U.S. and New Zealand dairy products might increase, impacting prices in those regions. However, with the restrictions lifted, German exports should return to normal, which will help stabilize trade as long as there are no new outbreaks.
It is essential to continue monitoring the FMD situation closely. Market players are paying attention to any changes that might cause another shift in buying behavior. The lifting of restrictions is a good sign for market stability. Still, to avoid unexpected disruptions, it’s essential to continue monitoring the long-term effects on consumer confidence and trade agreements.
Strategic Resilience in the Face of Evolving Dairy Market Dynamics
The current trends in the dairy market affect farmers differently. The rise in whey exports gives new opportunities. At the same time, the drop in Class III futures creates risks, influencing decisions and profits. Spot block prices have reached a two-month high, which is good news for producers facing changing market conditions. Whey exports are growing, showing that different dairy products are becoming critical, offering farmers a chance to diversify. However, the decline in Class III futures volume, despite steady open interest, means farmers should be careful and manage risks. This is crucial as the fall in spot butter prices shows that the market might remain unpredictable due to extra cream supply.
Farmers should also watch international issues like the EU milk export challenges and the Foot and Mouth Disease outbreak in Germany, as these directly affect their decisions. With EU exports falling short, U.S. dairy products might compete better globally. However, changes in European prices can still impact world pricing. These factors highlight the need to adjust farm strategies quickly, reconsider product focus, and emphasize whey production. A flexible approach to future contracts and hedging can help manage market uncertainties. Monitoring global signals and using innovative farm management strategies are crucial to navigating the dairy market.
Understanding Spot Block Market Volatility: An Overview of Historical Trends and Resilience
The spot block market is crucial for setting the prices of dairy products. It shows market trends and affects how much we pay for dairy items. This market often changes due to supply chain problems, global economic changes, and shifts in what people want. For instance, during the COVID-19 pandemic in the early 2020s, dairy prices, including blocks and butter, dropped significantly. However, they quickly bounced back because the market adapted to new ways of buying and delivering products.
The butter market often changes because of the seasons and changes in international trading rules. These changes affect how much butter costs and how much is available. Butter prices usually fall when there’s too much cream, like in the fall of 2019, and futures markets prepare for this extra supply. In 2018, trade tensions and rule changes between large dairy-producing and importing countries also made prices unstable.
In the past, changing milk production limits and ending the EU milk quota in 2014 helped stabilize the dairy market during price swings. Dairy market players often use futures and options to manage price risks. International dairy groups work together to keep prices steady by being open and balancing supply and demand. These strategies have helped the dairy market recover after disruptions, showing its strength and ability to adapt.
Strategizing and Adapting: Navigating the Impacts of Dairy Market Volatility
The current fluctuations in the dairy market, particularly with spot block prices and Class III futures, could soon affect the global dairy trade. Although barrel prices have risen, suggesting stability in the cheese sector, price unpredictability persists due to underlying factors such as fluctuating demand.
Dairy farmers should monitor butter market trends closely. An excess of cream is causing a decline in butter prices. If this continues, farmers might need to change how they produce to avoid financial losses. Monitoring butter futures is crucial, as markets may need to adjust to manage the excess supply, potentially leading to price fluctuations.
EU milk exports are down, which might give U.S. products a chance, but whey exports are strong. This could change competition for the U.S. and countries like New Zealand. Farmers should consider export plans and increase whey production as global trade shifts to exploit the market.
The recent Foot-and-Mouth Disease outbreak in Germany highlights how health threats can disrupt export channels, impacting the global dairy trade. While control measures are working now, staying alert is key. Farmers should be ready for changes that could suddenly affect global supply chains and demand.
These factors vividly depict the uphill battle ahead for the international dairy markets. Farmers need to stay flexible and make wise decisions. Monitoring trade policies and political shifts is crucial, as they can unpredictably sway dairy exports and pricing. Leveraging data analysis and preparing for diverse scenarios can provide farmers with a competitive advantage in addressing and adapting to the challenges posed by market uncertainties.
Assessing Future Pathways in the Dairy Market Amid Global Challenges
When looking at the future of the dairy market, decision-makers need to think about different outcomes that could happen. The changing commodities market, global trade, and health issues like Foot and Mouth Disease (FMD) in Germany means we need a complete plan to predict future effects. Adapting to the fast-changing market means understanding what’s happening now and preparing for different future scenarios.
The main scenarios to consider are:
Spot Block Prices Keep Rising: If prices continue to rise, it shows strong demand and a stable market. This might lead to more production to meet the demand.
Ongoing Pressure on Butter Prices: With too much cream available, butter prices might stay low, which could mean smaller profits for producers who may need to change their strategies.
Different Responses to EU Export Issues: As EU milk exports struggle, countries like the U.S. and New Zealand might benefit by gaining market share or facing more demand challenges.
Changes in Trade Due to Health Concerns: If FMD becomes a concern again or new health issues emerge, supply chains might change, pushing buyers to find different sources to reduce risks.
These scenarios highlight the need for quick thinking and planning, helping manage risks and find opportunities in the dairy industry.
The Ripple Effect: How Current Dairy Market Fluctuations Could Impact Retail Prices
The current changes in the dairy market, with spot block prices going up and some volatility, affect what consumers pay at the store. As the cheese market bounces back with barrels at a two-month high, this might change retail cheese prices soon. Likewise, lower spot butter prices could make butter products cheaper for consumers, at least for now. However, these market changes don’t always quickly affect prices at the store because of other factors, like transportation costs and how stores price products.
While immediate changes in consumer prices might not be significant, ongoing trends could noticeably change prices in supermarket dairy sections, especially for cheese and butter. People concerned about grocery costs should pay attention to these market updates as they may suggest future price trends. Market experts advise checking quarterly reports for more insights into how these wholesale changes might affect everyday prices for consumers.
The Bottom Line
Recent changes in the CME Dairy market bring challenges and opportunities for dairy farmers. Spot block prices have reached a two-month high, hinting at a possible recovery despite ongoing market instability. However, there is an oversupply of cream in the butter market, creating challenges and affecting future prices. Class III futures balance buying and selling, showing a stable but cautious trading environment. Around the world, EU milk exports have decreased, leading to trade changes as whey exports do better than other dairy products due to changing market demands and pricing. The situation with Foot and Mouth Disease in Germany causes trade issues, which might affect how much is exported and the prices in the dairy market. Dairy farmers need to stay updated on these trends. By observing market changes, farmers can make smart decisions to adapt and succeed in a changing environment. It’s important to be ready and able to adjust to handle future challenges in the dairy industry.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Find out how the dairy market will change in 2025. How will the changes in prices and trends impact your farm? Stay updated on what’s happening with cheese, butter, and nonfat markets.
Summary:
The dairy market is experiencing some ups and downs lately. Cheese prices have dropped to $1.8225 per pound, but Class III milk futures for February surprisingly went above $20. A case of foot and mouth disease in Germany might affect US markets if European cheese prices rise and impact the U.S. Meanwhile, worries about inflation are growing as food prices increase. The cost of $19.85 brings some stability to the Class III futures, giving a short break from the tension. In these challenging times, dairy farmers must adjust and find new strategies to stay afloat quickly.
Key Takeaways:
The spot block market shows significant volatility, with recent declines bringing prices to $1.8225, suggesting instability in cheese pricing.
Class III futures demonstrate a slight recovery, with February contracts exceeding $20, showing resilience in the futures market amidst fluctuating spot prices.
European cheese prices are rising, with potential implications for US markets, especially following a foot and mouth disease case in Germany, a key cheese exporter.
Increased trading volume in futures suggests heightened interest and activity, though concerns persist regarding stability in the nonfat market.
Consumer food prices continue to rise, highlighting inflationary pressures that could affect consumer purchasing power and dairy demand.
The dairy market is currently experiencing unprecedented volatility and uncertainty. Cheese prices have dropped to just $1.8225 per pound, highlighting the market’s uncertainty. On a positive note, Class III milk futures for February have slightly improved, going above $20. The rise in European cheese prices may lead to an impact on US prices. This impact is particularly significant following Germany’s report of a foot and mouth disease case, considering its status as a substantial cheese exporter. Overall, the market sends mixed signals, with the increasing cost of food adding to worries about inflation.
Product
Spot Price (USD/lb)
EU Price (USD/lb)
New Zealand Price (USD/lb)
Cheese
1.8225
2.23
2.14
Butter
2.5675
3.46
3.02
Nonfat Dry Milk (NDM/SMP)
1.37
1.18
1.19
Market Turbulence: Analyzing the Spot Block Volatility and Its Implications
The spot block market has recently shown volatility, with prices dropping to $1.8225 per pound at their lowest point. Several factors contributed to this situation. Experts attribute the sudden price drop to speculative actions and market uncertainty. When prices first fell just above $1.82, a lot of selling pushed prices down even more in the following days.
This unpredictability affected the market’s reaction, especially in the futures trading market. Initially, Futures trading prices were anticipated to fluctuate in alignment with spot rates. However, the price difference between futures and spot markets decreased as the spot market fell. Experts say that although the spot market is unpredictable, futures markets generally match spot prices over time.
Industry professionals are closely monitoring these changes. Futures trading must remain stable to reduce risk and ensure fair trading. The changes in spot block pricing reflect broader market sentiment, often triggered by outside economic pressures or sudden events. The industry needs to find ways to protect against more extended price changes.
Class III Futures: Riding the Wave of Recovery and Market Dynamics
The Class III futures market has been quite unstable lately. Still, after big drops and slow recoveries, February contracts went over $20. Traders are hopeful, yet careful, finding support near $19.85, which helped to steady trading and support the beginning of a bounce-back. On the other hand, cheese prices show a more complex picture, with spot block prices going up and down while futures stayed more stable. Demand and supply changes affect the availability and cost of cheese in a way that mirrors the changing market. Trading data helps understand these ups and downs, with more than 2,000 Class III contracts and over 700 related to cheese sold on one key day. Trader involvement is increasing, with open interest rising by 119 contracts for Class III and 210 for cheese, indicating a surge in activity.
Cheddar Prices in the EU: Navigating Challenges and Opportunities
The increasing price of cheddar cheese in the European Union has repercussions on global dairy markets. EU cheddar is now more expensive than American block cheese. This could push US buyers to consider buying from overseas if local supplies can’t meet demand or if domestic prices rise with global trends. Recently, Germany reported its first case of foot and mouth disease in over thirty years. Since Germany exports almost 16% of Europe’s cheese, this outbreak might disrupt production or exports, affecting global supply chains. This could make US cheese more competitive globally. However, American producers must balance local and international demand and avoid raising prices too much to benefit from the situation. By managing costs, US cheesemakers aim to stay competitive abroad without losing local customers due to price increases.
Spot Butter and Nonfat Markets: Stability and Emerging Risks Amidst Global Concerns
The spot butter market saw a slight decrease, with prices falling by just three-quarters of a cent to $2.5675. No trades were completed, but six offers went unanswered. Although there was less activity than the previous day, more than 350 futures contracts were traded, showing that people remain active in the market. Open interest, which shows how many contracts are still available, increased by 147, suggesting more people are getting involved as prices stabilize from late December to early January.
At the same time, the nonfat market stayed stable, with prices remaining unchanged and fewer trades taking place. Only 158 contracts were exchanged, less than the previous day’s total. Despite the market’s stability, prices increased slightly due to the consistent conditions. However, there is a looming risk because of a recent foot and mouth disease in Germany. This issue can alter import and export patterns in European markets, potentially influencing nonfat market prices shortly. Dairy industry participants are closely monitoring the disease’s effects for more information.
Inflationary Challenges: Rising Consumer Prices and Their Impact on the Dairy Sector
The Consumer Price Index (CPI) has been rising recently, showing that inflation affects the economy. In December, the yearly growth of the CPI increased for the third month in a row, marking the highest rise since the summer. Prices were up by 0.4% from the previous month and 2.9% from the year before, compared to 0.3% and 2.7% in November. Grocery prices also increased, with home food costs rising by 0.3% from the previous month and 1.8% from the last year. In November, grocery prices had risen by 0.5%, with an inflation rate of 1.6%. Restaurant prices also rose by 0.3% compared to November, maintaining the same 3.6% annual increase as before.
This ongoing inflation, especially in food, is putting pressure on the dairy industry. As the cost of essential items increases, dairy products, which are necessary for daily diets, become more expensive for household budgets. People may start looking for cheaper options or buying less. As food prices at markets and restaurants increase, dairy producers face higher costs, too. They need to keep prices affordable for customers while managing their expenses.
With inflation pressures not letting up, the dairy sector must find ways to handle these challenges. People’s buying habits may change, with price becoming more important than brand loyalty. Dairy businesses must watch these changes closely and adjust their strategies to lessen the impact while staying competitive in a challenging market.
Current Dynamics in the Dairy Market: Strategies for Navigating Volatility and Fluctuating Trends
The recent drops in block prices might lead to financial challenges for cheese producers and dairy farmers, jeopardizing their ability to maintain a stable income.
However, the slight rise in Class III futures shows that conditions might improve soon, even though spot market changes are still a concern. Also, higher European cheddar prices are important because they could strengthen American markets. The outbreak of foot-and-mouth disease in Germany, a prominent cheese exporter, might upset supply chains and increase US exports to fill gaps.
Global inflation adds to the challenges by raising costs for consumers and farmers, such as for feed and fuel, without promising more income. This challenging situation reduces profit margins, so farmers must carefully manage their finances and plan for risks to avoid problems.
Farmers should watch the global market and health news that might affect trade. By staying informed and planning wisely, they can better cope with current market challenges and turn international issues into opportunities for success.
Learning from the Past: Navigating Dairy Market Cycles Through Historical Insights
The dairy industry often experiences ups and downs due to various outside factors. Weather changes, political influences on international trade, and shifting consumer preferences contribute to the market’s volatility. For example, in the early 2000s, changes in the European Union‘s farming policies and new importing markets led to significant price changes.
Furthermore, temporary trade issues can also instigate changes in the market. In 2014, Russia banned EU dairy imports, creating a surplus of products in Europe and dropping prices worldwide. Around the same time, trade tensions between the United States and China and their tariffs made it harder for American dairy products to be exported, causing more price changes.
The current outbreak of foot-and-mouth disease in Germany raises concerns due to historical events related to such outbreaks. In 2001, the United Kingdom dealt with a similar disease that required killing livestock and damaged the dairy and meat industries. This disease could significantly impact Germany, a significant cheese exporter in Europe. Suppose the disease spreads or causes long shipping delays. In that case, it may affect European markets and global supply, potentially leading to price and availability issues throughout the industry.
Charting the Future: Navigating the Intersection of Trade, Disease, and Consumer Dynamics in the Dairy Industry
Looking into the future, there are many uncertainties as global connections and diseases threaten the fragile balance of the dairy industry. Germany’s foot-and-mouth disease outbreak shows how quickly supply chains can fail under pressure. If the outbreak spreads, European cheese exports might drop, forcing US buyers to look for alternatives, tightening domestic supplies, and pushing costs up.
Rising feed prices threaten demand as consumers spend less and companies seek new products. Nonfat dry milk, particularly vulnerable to changes, sees prices fluctuate in this unstable environment.
Geopolitical issues add more complications. The dairy market must navigate various agreements, and international disagreements could disrupt pricing and trade. New trade agreements or taxes may create trade barriers, affecting the origin and destination of dairy product imports and exports and limiting access to specific markets.
Adaptability becomes crucial for survival and success in a period of uncertainty with multiple short-term risks. Farmers and processing facilities must be ready to diversify and innovate to overcome challenges and seize opportunities, ensuring their success through these changes.
The Bottom Line
Although recent prices for spot block cheese have fallen, there is hope as Class III futures rise above $20. European cheddar prices are also increasing, which might affect US prices, especially with new outbreaks affecting international supply.
The butter and nonfat markets encounter challenges in maintaining stability amidst global pricing fluctuations and supply chain disruptions. Everyone in the dairy industry must remain vigilant. As consumers pay more, it highlights ongoing inflation, making strategic planning important. Dairy farmers need to stay informed and adjust their practices to market changes. Using data can help them understand and manage ups and downs, ensuring they remain strong and profitable.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Explore the January 2025 CME Dairy Market’s ups and downs. How will Class III and Cheese futures affect your farm’s plan? Find out more and see what it means for the future.
Summary:
The January 14th CME Dairy Market Report revealed a precarious situation for dairy traders, with Class III milk futures and cheese contracts priced below current market values. Few participants ventured bids on February Class III contracts, which closed at $19.85. Butter transactions saw augmented seller participation as prices dipped, introducing unpredictability. However, nonfat dry milk futures climbed due to short positions covering losses, despite conveying mixed signals about demand. Butter prices fell 3.75 cents over eight trades, while nonfat dry milk spot rates edged up 0.25 cents. Such fluctuations exhibit the market employing caution, as trades and calibrations abound, highlighting the necessity for flexible trading strategies in a climate of instability.
Key Takeaways:
Class III and Cheese futures are trading at a discount compared to spot prices, indicating a potential lack of confidence in spot price recovery.
The recent sell-off in Class III futures was on lower volume, suggesting that aggressive selling was more due to market exit rather than increased pessimism.
Spot butter prices saw increased activity with sellers returning, implying market participants are ready to engage despite instability.
Despite minor gains, No Fat Dry Milk (NFDM) futures show signs of short-covering, yet the market remains complex due to entrenched spot price action.
February Class III futures reached a crucial 50% retracement level from the December rally, which could provide technical support against the backdrop of market volatility.
Overall market conditions reflect high volatility, necessitating strategic planning and adaptation among dairy traders and producers.
The CME Dairy Market Report from January 14th, 2025, shows a mix of uncertainty and optimism in the dairy trade. Traders have varied opinions on the market’s direction.
Prices in the cheese market were shaky. During the session, the block cheese price fell to $1.8300 but rose to $1.9000, ending just a penny lower. This movement suggests we see more ups and downs.
Butter trading was busy, with eight deals and the price dropping by 3.75 cents. About 500 futures contracts for butter were traded, and there was an increase of 129 in open interest. This points to both hope and caution about what’s next for butter.
Even though there were many transactions, spot prices for NFDM edged slightly by 0.25 points at the end. Open interest in contracts fell by 23, showing that the market is adjusting and being very careful with new deals.
Product
Spot Price (USD)
Futures Volume
Change (%)
Open Interest
Class III Milk
$19.85
1,200
-4.5%
–
Cheese
$1.90
–
-0.05%
–
Butter
$2.47
500
-1.5%
+129
NFDM
$1.80
357
+0.25%
-23
Fluctuating Dynamics in Spot Market: Balancing Butter and NFDM Prices
Recently, the prices for butter and NFDM in the spot market have changed noticeably. Butter prices dropped by 3.75 cents during eight trades, with equal bids and offers. While some sellers lowered prices, many buyers remained interested, suggesting a potential for steadier or higher prices soon.
The sales data for both spot and futures markets indicates sellers are reducing butter prices while buyer interest remains strong. This complex situation could be due to expectations of future supply or available stock levels.
NFDM futures increased mainly due to short-covering. Sellers closed their bearish contracts to reduce risks of possible declines. A slight increase of 0.25 cents in spot NFDM prices suggests that offers were made at rates acceptable to sellers. Nonetheless, there was no strong selling, which kept the market in balance.
Traders must closely monitor trends in the spot market. This helps them stay informed and adapt to changes in futures pricing, ensuring they are ready for any market shifts.
February Class III Futures: A Strategic Pitstop at the 50% Retracement
Understanding the market means seeing how significant February’s 50% drop in Class III prices is. This drop means the price went halfway back to where it was before, which might show a strong support point. Traders might think prices will decrease or increase if other positive things happen.
For February, Class III futures were supported at about $19.85. If demand or other factors are correct, this could prevent a further price drop and lead to a rise again.
In a market full of uncertainty, traders will look at these levels. Prices moving past the 50% point could boost confidence and cause a strong rally to $20. If prices fall below this point, it might lead to more selling, showing the market’s unpredictability.
Bounce Back or Breakdown: Navigating the Butter Market’s Complex Terrain
The butter market has been quite unstable, with prices dropping by 3.75 cents in eight trades. Four buy bids and four sell offers were made, showing that buyers and sellers are still interested. Despite this, the futures market also went down, with about five hundred deals made, indicating that it’s hard to keep the gains made earlier.
Businesses trying to protect themselves from risk by influencing market trends is a significant factor. The rise in open positions by 119, with new sellers matching ongoing buyer interest, suggests that the market might get busier and more unpredictable.
When considering these changes, it’s essential to consider more significant financial and business factors that could affect prices. Industry players will likely closely monitor production levels, stock information, and export demands because these can significantly impact prices. Current industry opinions and recent price changes can also affect how people trade and see future prices.
Though recent times have been challenging for butter futures, mixed signals suggest that prices might bounce back or become more unstable. Finding a balance between present and future prices will be important in shaping views for the butter industry’s short—and long-term future.
NFDM Futures: Navigating Price Adjustments and Market Stability Amidst Fluctuations
NFDM futures saw a lot of ups and downs, ending with mixed signals as traders tried different strategies in a volatile market. This uneven path was mainly due to increased short-covering, where traders bought contracts to exit their opposing positions and protect against possible downturns. This buying increased futures prices as dealers adjusted their plans to handle potential drops. Even with these increases, the NFDM market is still facing a lot of instability, mainly because of slow spot rates that make aggressive selling less attractive and create a problematic price-cut situation. Dealers find it hard to set prices when underlying values change slightly, causing mismatches with stable physical prices. Understanding these complex connections requires careful data analysis and flexible trading strategies. The mix of slow spot levels and changing futures creates challenges that brokers must manage while looking for short-term opportunities in a changing landscape. The lack of significant moves in the underlying market highlights how important short-covering is in shaping prices and sentiment. Ultimately, how well NFDM futures perform will depend on their ability to adapt to these changing market conditions and take advantage of temporary market shifts.
Navigating the Past to Predict the Future: Unraveling CME Dairy Market Cycles
Looking at past trends is essential to make sense of the ups and downs in the CME dairy market. The futures market for dairy products often changes because of global demand, production costs, and environmental issues. When feed costs, like for corn, increase, dairy production is more expensive. Problems like bird flu can disrupt supply. For instance, California’s milk production dropped 9.2 percent in November because of these issues. This causes traders and producers to rethink their strategies, leading to price changes. Understanding these patterns helps traders and farmers manage risks better. By learning from past events, they can plan more wisely for future changes in the CME dairy market.
The dairy industry is going through a tough time. Prices for futures and spot markets, especially for Class III and NFDM, are unstable. Dairy farmers, who often have tight budgets, might face financial problems, making them rethink their plans and investments. Farmers could change their strategies and strengthen their businesses if prices stabilize, mainly if local demand stays strong or exports from international trade increase. Smaller farms might need to sell or merge with larger ones if the instability continues, changing the competitive landscape. Big players could then have more control over pricing.
The Bottom Line
The recent changes in the CME Dairy Market have led to surprising ups and downs. Class III and cheese futures have shown unpredictable price changes, and butter and nonfat dry milk prices have fluctuated unexpectedly, presenting challenges in the market. Dairy producers must understand these changes because their profits and decisions depend on current prices. Staying updated about the ever-changing market conditions is essential for lasting success in the dairy business.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Find out why American butter demand is skyrocketing. In what ways are markets reacting to this boom? Explore the dynamics of manufacturing, exports, and inflationary pressures.
Summary:
November saw unprecedented US butter consumption as the CME spot butter price, driven by relentless demand, reached $2.60 per pound, not slowing down. With US churns totaling 171 million pounds, a 4.4% increase from the previous year, USDA data shows more butter production up to November. However, California had difficulties since avian influenza reduced output. The US imported more butter than it exported despite producing over 2 billion pounds this year, highlighting competitive foreign markets. November saw a record 241.4 million pounds of butter purchased by Americans, up 22% from 2023. New cheese capacity will cause milk competition to drive higher prices, reflecting a dynamic market with opportunities and challenges.
Key Takeaways:
Butter prices in the CME spot market have reached unprecedented levels, indicating strong domestic demand in the U.S.
U.S. butter production has surpassed 2 billion pounds for the year, showcasing robust production capabilities despite regional setbacks.
November’s Cold Storage report highlights significant demand for butter as year-over-year stock gains sharply dropped.
The U.S. exported a substantial amount of butter in November yet remained a net importer, underscoring massive domestic consumption.
Heightened U.S. consumption trends drive the increase in butter prices, and further price surges are anticipated with new cheese capacity coming online.
Butter is in high demand across the United States, with prices rising to $2.60 per pound. According to a local dairy farmer, the demand for butter has never been higher in the United States. So, why is everybody so into butter right now? Learn about the impact of record butter buying on market trends and production.
Metric
November 2023
November 2024
Year-to-Date 2024
Change (%)
CME Spot Price ($/lb)
$2.30
$2.60
–
+13.0%
Butter Production (million lbs)
163.8
171.0
2000
+4.4%
Butter Exports (million lbs)
5.6
6.8
–
+21.4%
Butter Imports (million lbs)
12.4
16.4
–
+32.3%
Butter Consumption (million lbs)
198
241.4
–
+22.0%
Butter Prices Reach New Heights: A Market Revolution
CME spot butter prices have risen to $2.60 per pound. The market underwent significant changes last week. The industry’s balance sheets have tightened due to high butter demand in the United States. Read more about it here. This price increase is not a one-time occurrence but a long-term trend likely to continue. The price increase demonstrates how difficult it is to balance supply with massive demand for butter in the United States, where people purchased a record 241.4 million pounds in November, up 22% from the previous year.
The numbers demonstrate the struggle between limited supplies and rising demand. In November, 171 million pounds of butter were produced, and year-to-date production has surpassed 2 billion pounds. This demonstrates strong production, but it is important to note that demand exceeds these high production levels. View supporting USDA data here. At the same time, the United States exported nearly 6.8 million pounds of butter in November, indicating a favorable position in international markets. However, the US imported a record 16.4 million pounds of butter.
This situation demonstrates what is happening in the market right now. The fierce competition for milk and rising butter prices indicate a difficult path ahead. New cheese-making processes may make competition even more complicated, increasing prices. These changes are crucial in predicting market trends for 2025. Follow this link for updates and additional insights.
A Record Year for US Churns: Butter Production Soars to New Heights
In November, the US produced an incredible 171 million pounds of butter, a 4.4% increase from 2023. This boost shows the industry’s resilience and growing production strengths. Production surpassing 2 billion pounds year-to-date is the earliest this level has been reached, proving that US churns are highly efficient.
What’s ramping up production? More butterfat! Milk’s fat content has risen, leading to more butterfat for churning. Even with California’s dip in output due to avian flu affecting milk production, the increased butterfat has kept things steady. You can read more about these challenges and solutions here.
These numbers show significant market changes and hint at what to expect with inventories and exports. As butter demand grows, these trends will impact the whole dairy sector. For more on market shifts, check out this analysis.
Regional Dynamics: Navigating Challenges in US Butter Production
2024 brought some noticeable changes in butter production across the US, showing how local issues can impact the national dairy scene. California, typically a leader in dairy output, experienced a 13% decline in butter production from the previous year due to avian influenza, which reduced the milk needed for butter (source: California Dairy Report).
Even with this dip, US butter production kept climbing, thanks to more activity in the Midwest and Northeast. These regions had more milk fat, which boosted butter production (source: MidwestDairy Growth). The Midwest, in particular, saw about a 5% increase. This helped cover losses from other places and maintain a steady supply chain.
These regional variations highlight the adaptability of the US dairy industry. While California’s decline in production was a concern, other states could step in and fill the gap, resulting in over 2 billion pounds of butter production by November. This adaptability demonstrates the industry’s capacity to overcome challenges and maintain a stable supply chain.
Producers and stakeholders must remain vigilant and adaptable in the face of these regional variations. By closely monitoring and being prepared for potential supply issues, they can help keep the market stable. These recent changes also present opportunities for innovation, encouraging the dairy sector to explore new ways to boost production efficiency and sustainability.
November’s Cold Storage Report: A Closer Look at Butter Market Dynamics
In the busy world of dairy markets, people are talking about the surprising benefits of semi-skimmed milk. Who knew a simple glass of milk could do more than feed us? Picture this: a friendly neighbor who, not long ago, struggled with depression and anxiety. She didn’t find help in a self-help book but in her morning habit—pouring herself a glass of semi-skimmed milk.
As we take a closer look at the mental health crisis, with depression and anxiety affecting so many, it’s time to consider new ways of helping people. Recent studies show that semi-skimmed milk could help lessen the symptoms of both depression and anxiety. This isn’t just a tiny discovery—it’s a ray of hope in a world where mental health issues affect millions. But what makes this every day drink a possible help for mental health? Let’s find out what science says about these interesting claims.
The Butter Trade Carousel: Navigating November’s Dual Role in US Exports and Imports
The US butter trade in November was a real roller coaster, with significant shifts in exports and imports, showing the tug-of-war between local demand and global markets. The US shipped out nearly 6.8 million pounds of butter worldwide, proving our butter is loved for its quality and price (Trade Data Visualization). At the same time, we brought in a record 16.4 million pounds to keep up with the strong domestic demand that our production couldn’t meet. This shows that Americans can’t get enough butter. Folks in the US snapped up 241.4 million pounds in November, a 22% rise from last year, signaling a growing love for butter (Statista). This spike in demand has tightened supplies and pushed prices up, leading to more imports. Even though we brought in more than we sent out in November, the fact we could export so much highlights the US’s central role in the global butter scene and the balancing act required in such a high-demand market. These import-export shifts reveal two key things: US butter is a hit overseas due to its price and quality, boosting exports, and the massive local demand means we need foreign butter to fill production gaps (Dairy Reporter). Overall, these market twists show how unpredictable the butter trade can be and suggest demand could keep rising, calling for innovative strategies to handle local supply and imports.
America’s Butter Craze: What’s Driving the Surging Demand?
Americans went wild for butter in November, buying a record-breaking 241.4 million pounds, 22% more than last year. So, what’s causing this butter craze? A few things are going on. First, holidays often mean more cooking and baking; butter is a must-have for many recipes. As families come together, they want quality ingredients, and butter is at the top. Plus, more people choose natural and organic foods, and butter fits right in, as highlighted in the Consumer Trends Report.
Butter is a popular choice because it is super versatile. It’s not just for home cooking; restaurants use it a lot, too. As the economy grew, food producers started using more butter toward the end of 2024. And let’s not forget those holiday ads from butter brands, which, as mentioned in Marketing Insights, made it even more appealing.
Even though plenty of butter is available, these factors have pushed up prices and changed how people buy butter, according to the Dairy Report. In 2025, butter will likely remain a favorite for US shoppers and impact markets worldwide.
The Ripple Effect of Escalating Butter Prices: Navigating a New Dairy Market Landscape
Butter prices are rising, mainly because Americans can’t afford it. CME spot butter prices have soared past $2.60 per pound, showing supply and demand are getting close to a level. Americans set a new record by buying 241.4 million pounds of butter in November, 22% more than last year. Demand will likely keep climbing because people love high-fat diets and baking more.
New cheese production might change things. Cheese uses the same milk as butter so that it could impact milk and butter prices.
The competition for milk could make it even harder to find, raising milk prices. This could be good for dairy farmers but might make butter more expensive.
Things like sudden drops in milk production or weather problems could tighten supply even more and push prices higher. If you’re in the dairy business, keeping an eye on these changes is smart. The year 2025 seems ready for high demand and stiff competition. Are you prepared for what’s coming? How might these trends change your plans? With every challenge comes new chances for those ready to take them.
The Bottom Line
With butter demand soaring, keeping up and adaptable is crucial. The US butter market immensely likes this popular dairy product, giving us a peek into what’s happening in global food markets. Production, trade, and what people want are all shaking things up, making the butter industry pretty exciting. How will these changes affect future prices? What new ideas could change how we make butter? And how might this impact you as a producer, trader, or consumer? It’s the right moment to dig in. We urge you to consider these impacts and join the discussion about butter’s future. Share your thoughts on what’s ahead. Your voice counts in this ongoing story; we can look into what’s next together. Let’s keep the chat going and make the future brighter for everyone in the dairy world.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Check out the sharp decline in Class III and Cheese markets in early 2025. What does this mean for dairy producers and market trends? Get the insights now.
Summary:
The first week of 2025 saw Class III and Cheese markets take a hit with a sharp selloff due to increased trading and open interest. Early enthusiasm with new contract highs from February to April quickly faded, leaving traders facing unexpected price drops. Aggressive spot cheese sellers took advantage of limited supply, challenging the balance of the market. Meanwhile, NFDM prices fell as trading volumes rose, and dairy producers felt the squeeze from falling milk prices and rising grain costs. Despite these shifts, market dynamics remain steady, with US cheesemakers struggling to meet supply and demand. The USDA report provided some hope with positive corn predictions, while job growth surprised the market. Moving forward, the industry needs to stay nimble and adapt to changing conditions.
Key Takeaways:
Class III and Cheese markets saw a significant selloff in early 2025, impacting trader sentiment.
The price volatility stemmed from increased trade volume and open interest, signaling heightened market activity.
Spot cheese sellers were particularly aggressive, influencing the market’s downturn.
Limited availability of cheese loads suggests ongoing inventory challenges for US cheesemakers.
Further selling is anticipated, with market dynamics remaining largely unchanged.
Stable butter market conditions may offer some market stability, although potential corrections are still possible.
NFDM also weakened, with substantial trading volume marking the first new price low in months.
Dairy producers are feeling financial pressure as milk prices drop while feed costs rise.
The stronger than expected US labor market continues to influence broader economic conditions.
The first week of 2025 was a rollercoaster for the Class III and Cheese markets. It started with high hopes and new contract highs from February to April. But, just as everyone was feeling good, things took a turn. The excitement faded, and prices had dropped significantly by the end of the week. This sudden change shook up traders and showed how shaky the dairy markets can be. Even when things start strong, they can quickly fall apart.
Commodity
Jan 1-4 Price Range
Trade Volume
Open Interest Change
Class III
$19.00 – $20.00
2,070 trades
+390
Cheese Futures
$1.80 – $1.95 per pound
775 contracts
+33
Block Cheese
$1.82 per pound
8 lots
N/A
Barrel Cheese
$1.85 per pound
2 lots
N/A
Class III and Cheese Markets Navigate Tumultuous Waters with Sharp Price Reversals
The Class III and Cheese markets have recently experienced some ups and downs, including [specific market events or trends]. Since last Tuesday, February, Class III prices have dropped by about $1, which got traders and market experts talking. Meanwhile, trade volume and open interest shot up, with 2,070 trades and open interest up by 390. This means more people are buying and selling in the market.
Seven hundred seventy-five contracts were traded in cheese futures, and open interest rose by 33. This suggests that many sellers were ready to sell, which put more pressure on prices.
Navigating Market Whirlwinds: Traders’ Resilience Shines Through Swift Price Shifts The fast drop in futures prices at the start of 2025 has shaken up traders’ feelings, overshadowing the early excitement of the year. This quick decline is like a storm traders didn’t see coming, causing them to rethink their plans. Such sharp price changes often make traders more careful. The real test is adjusting to these wild conditions since trader confidence heavily relies on keeping prices stable.
In this setting, spot cheese sellers have become aggressive, especially those selling block cheese. They exploit the current market before buyers get used to new prices.
Adding to the complexity, there’s not much cheese available for trade. Even a tiny shift in buyer interest can affect the market. It’s like balancing on a knife’s edge; just a few loads can change market trends. This scarcity makes things unpredictable, pushing sellers to act wisely in a tight supply situation. As a result, traders and producers carefully navigate these tricky waters, knowing each decision has a significant impact in this delicate market scene.
Anticipating a Lower Horizon: Navigating Sales Continuation and Market Equilibrium
Looking at the Class III and cheese markets, prices might start lower because selling is still happening after last week’s drop. This isn’t surprising since last week saw more trades and interest, showing that traders feel slightly negative. If we take a closer look at market dynamics, things seem primarily steady despite these quick changes.
US cheesemakers are having a tough time not just because of prices but also because it’s hard to keep enough stock. It’s not just about having enough cheese on the shelves but balancing supply and demand, which seems off right now. The need for cheese is there, but the supply, especially in block form, is tight, meaning the usual post-holiday restock might be slower this year.
There’s also something about traders’ thinking. They accept price drops readily but are doubtful about increases, which affects the market’s actions. This has led to much selling, especially in spot cheese, making things look even more damaging.
Moving forward, experts will monitor global influences, production costs, and what consumers want, which might help fix the market. Until then, the US cheesemaking industry must be innovative and active to survive these challenging times.
Stable Spot Butter Action: A Temporary Respite or the Prelude to a Correction?
Last Friday, spot butter prices seemed to take a breather from the climb in butter futures. Lately, futures have been trending higher than spot prices, suggesting that traders are betting on new changes that aren’t yet visible. This might lead to a situation where spot prices go up, or futures come down.
Last week, spot prices surpassed a six-week high of $258.000. If the market adjusts after the previous year’s significant drop of over 70 cents, this could signal more potential price hikes. Adjustments like these usually aim to align prices with changes in the broader economy or shifts in supply and demand.
As we move into January, there might still be a chance for spot butter prices to climb if this adjustment sticks around. A jump in trading or shifts in consumer demand could push confidence and drive prices higher. If the difference between spot and futures prices stays, it might mean there’s a change coming that hasn’t hit spot prices yet. Folks watching the market should watch futures and broader economic signs to understand what’s coming.
Navigating NFDM’s Current Trajectory
Last Friday, Non-Fat Dry Milk (NFDM) showed some weakness. The market shifted significantly, with more than 600 contracts traded and open interest increasing by 340 contracts. This was the first time since September that nearby contracts saw a price drop, hinting at a possible market change. This could lead to more sellers bringing prices down or making traders expect price corrections. Knowing these possibilities is essential for making plans.
Dairy Producers Face Financial Squeeze Amid Diverging Market Forces
Dairy farmers are feeling the pressure as milk prices go down and grain prices go up. This makes it challenging for dairy farms to make money because feeding cows gets pricier. Grain prices are rising due to lower crop yields, which means higher feed costs for farmers. The USDA’s latest report shows corn yields are down, pushing grain prices even higher. Cows need grain, so these cost jumps hit hard when milk prices fall.
This situation might lead to a lower milk supply if farmers can’t afford to continue operating at a loss. Farmers may also find cheaper ways to feed their cows. Either way, dropping milk prices and rising grain costs are big deals, possibly changing how dairy production works soon.
The big question is: How will dairy farmers tackle this challenging time? Will they find new ways to adapt, or will the market need to change? Everyone in the industry watches developments to see how they will impact business now and in the future. Though the future is uncertain, this challenge might be a chance for positive change and new ideas.
A Complex Market Landscape: Class III and Cheese Price Fluctuations Signal Deeper Trends
The significant changes in Class III and cheese prices show more going on than what traders feel. This isn’t just about the stock market—it touches everyone in the dairy world, from farmers to processors and sellers. Things are tricky with lots of buying and selling and outside troubles like feed costs and job numbers. This week’s shifts make it a time to rethink for those trading dairy. People in the business are wondering: What’s next? Is this a small bump, or are we headed for a more unpredictable time in the dairy markets?
Other economic factors add to the story. The USDA report provides ideas on crop yields and sets new hopes for corn and soybeans, which are essential feed for cows. The report says the corn supply is going even lower than expected, showing how these things play into the bigger picture.
So, what should dairy farmers do in this tricky spot? With milk prices falling and grain prices increasing, making money becomes more challenging. Many will need to review how they make and price their products. Being able to change quickly is key.
Everyone involved, including processors and stores, must stay alert and ready to adapt. It’s not just about responding to prices; it’s about seeing future trends and being prepared to tackle what’s next.
The Bottom Line
As we move further into 2025, the Class III and Cheese markets are at a turning point. The recent significant price drop has brought opportunities and challenges, especially for dairy producers with higher feed costs. To be successful, market players need to be intelligent and aware of important factors: consumer trends, USDA reports, global trade, and cheesemaker inventories. All of these can affect prices and strategies. Dairy producers should focus on boosting efficiency and controlling costs to overcome challenges and seize market opportunities. It’s a great time for readers to get more involved, learn from experts, and connect with others in the industry to handle these changes confidently. Stay updated for more insights—while the market is unpredictable, we can manage its ups and downs together.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Discover how post-holiday changes impact milk, butter, and cheese production, plus pricing trends.
Summary:
The dairy market 2025 is buzzing with fresh dynamics as milk demand spikes post-holidays, partly due to a southern snowstorm, signaling tighter supplies. The cream is plentiful, but California cut butter output by 12.8%, while nationally, butter production rose 4.4%, reaching 170.8 million pounds, slightly boosting prices to $2.60 per pound. The cheese scene reveals production down by 1.7% and cheddar by 3.4% amid hefty exports. Whey markets enjoy growth in high-protein products yet face export challenges, showing resilience as health-conscious choices rise. Overall, fluctuations across dairy futures and the feed market reflect an opportunistic yet volatile landscape.
Key Takeaways:
The post-holiday demand surge for milk has tightened supply, with spot milk trading at over class, indicating market tightness.
Despite California’s dip in butter production, national output has increased due to abundant cream supplies, raising CME spot butter prices.
Cheese production declined in November 2024, but record exports, particularly to Mexico, influenced price fluctuations in the market.
Demand for whey protein isolates reached new highs, although whey exports decreased, impacting whey powder stocks and prices.
The milk powder market faced a production decrease, with lowered exports contributing to a challenging environment for NDM.
The futures market remains relatively stable, with Class III and IV contracts showing mixed results, sustaining above-average prices.
Corn production saw lower yield estimates and high demand, tightening stocks and raising prices, while soybean supplies remained ample.
The dairy market has displayed remarkable resilience in the face of the tumultuous events 2025. A surprise snowstorm in the South and the lingering effects of the holidays has increased demand for milk and eggs. The diligent efforts of milk bottlers to restock schools and grocery stores and the bustling breakfast rush have resulted in a temporary price spike. This unexpected turn of events provides a unique opportunity to examine the market dynamics closely.
Dairy Rush: How Surprise Factors Are Shaping the Milk Market in 2025
The dairy market has experienced a significant surge after the holidays. Families are returning to their routines, leading to higher milk consumption for various purposes. The reopening of schools has significantly increased the demand for milk among students nationwide. Additionally, stores are replenishing their dairy stocks after the holiday rush. The unexpected snowstorm in the southern states has further highlighted the industry’s adaptability.
Many people rushed to stock up on milk and eggs, leaving shelves empty. The market is tight because milk bottlers work hard to meet these needs. Spot milk prices, which represent the immediate market price for milk delivery, fluctuate between class and $1 over, indicating a scarcity of milk to meet the current demand. This is unusual for early January when there is typically an abundance of milk. Still, bottlers and traders face a more challenging market this year.
The Buttery Dynamics: Surplus Cream and California’s Production Dip
In the busy dairy world, the butter market enjoys a good time. Prices have dropped because there is a massive surplus of cream. California’s butter production has dropped 12.8% since last year, which is the topic of extra attention this week. This drop hasn’t changed the national picture, however. Butter production has increased by 4.4%, reaching 170.8 million pounds, showing that the industry is strong outside of California.
A large amount of cream is significant. A good supply of butterfat feeding the churns ensures that other states can compensate for California’s lack of production. This trend and the strategic stockpiling by butter makers may put pressure on market prices. Still, overall, it has not significantly altered the market landscape. The spot price of butter on the CME has increased slightly to $2.60 per pound. This price change, a 4.75% rise for the week, indicates that prices have not remained stable despite production changes. This could be because the market is anticipating what will happen, or traders are trading based on speculation.
These metrics go beyond numbers; they reveal how the market responds immediately to changes in supply and demand. People who care about regional differences and national trends will need to know the subtleties of this movement to navigate the buttery tides of change.
Cheese Industry: Navigating the Waves of Production Decline and Export Surges
There have been significant changes in the cheese market, with significant changes in production and exports. In November 2024, 1.15 billion pounds less cheese was made in the U.S. than the previous year, a drop of 1.7%. Even more noticeable was the drop in cheddar production, which fell by 3.4% from November 2023 to December 2024. It’s easy to see why these drops in production have made people worry about possible shortages, especially of fresh cheese that can be sold quickly in markets like the CME spot market.
Even though production was lower than expected, record-breaking export numbers showed a different picture. In November, the United States sent 87 million pounds of cheese abroad, 2.4% more than in the same month last year, when shipments were already high. With this vast increase, cheese exports were 17.5% higher in the first 11 months of 2024 than they were at the same time last year. Shipments to Mexico were 30% higher than the previous year’s record.
Price fluctuations were mainly influenced by the decrease in production and the increase in export demand, directly impacting the pricing dynamics in the cheese market. At first, worries about a lack of cheese made people optimistic about the market. But when sellers returned to the market, these worries quickly disappeared, leading to a big selloff. Because of this, spot prices on the CME for Cheddar blocks dropped by 10 cents to $1.82 per pound, while prices for barrels went up by 2 cents to $1.85 per pound.
Whey Markets: A Blend of Rising Proteins and Export Challenges
The whey and milk powder markets are the ones to watch this week. They are going up and down. As more people look for healthier options, there is a significant need for high-protein whey products. Whey protein isolate production is up by 9%, which beats the previous high set in November 2024. This shows that the market wants more high-protein foods.
However, the amount of standard whey powder made went down by 1%, and the amount exported went down by 11.4%. This could mean that supply and demand have changed. China is now focusing on European suppliers instead of U.S. whey powder, which means there is less demand worldwide.
The amount of nonfat dry milk (NDM) and skim milk powder (SMP) produced fell by 10.9% in November 2024, making it the slowest November since 2013. The country also lost 19.7% of its exports, with 8.2% less going to Mexico and 43% less to Southeast Asia. This means that U.S. milk powder is losing ground to cheaper options from other countries, especially since the dollar is strong.
These numbers from Dairy Market News and USDA reports show that dairy farmers and other industry professionals need to adjust their plans to keep up with changing global production rates and demand.
Class III and IV futures have fluctuated lately in terms of futures market and price predictions. Class III contracts from January to April went down about 20 this week. However, they’re still above $20 per hundredweight (cwt) for the first quarter. Despite recent changes, this high price shows people are optimistic about the future.
The February Class IV contract ended at $21.10 per cwt, which means it has been stable. Dairy farmers are happy with this price because it covers their costs and leaves room for profit. This stability is essential since changing feed costs and demand can hurt profits.
Due to the unpredictable nature of issues in the dairy industry, like production and export challenges, these futures prices offer a sense of security. This stability in Class IV futures provides dairy producers with a reliable income stream, offering financial security amidst economic uncertainty. Farmers can better handle the unstable economy by taking advantage of these prices and keeping their farms running smoothly and financially stable.
Underestimated Harvests Stir Shifts in Feed Market Dynamics: Corn and Soybeans in the Spotlight
The feed market took some unexpected turns for corn and soybeans at the end of 2024. The final report from the USDA indicated that the corn yield in 2024 was 179.3 bushels per acre, highlighting its comparison to previous years and the potential market implications. While this is a high number, it falls short of the earlier expectation of 183.8 bushels. Not only did farmers plant less corn, but the total harvest was 474 million bushels less than in 2023. Foreign buyers and ethanol processors are still buying much corn, even though there is less of it available. This is making corn stocks tighter. Stocks have dropped from what was expected to be 2.1 billion bushels to 1.54 billion. Because of this, corn futures have gone up. The last contract for March was worth $4.71 a bushel, which is 20˼ more than the previous contract. As a result, dairy farmers will need to pay more for grain than initially planned.
There were also changes in the market for soy. The USDA report said that the soybean yield dropped to 50.7 bushels per acre, but there are still many beans to go around. The expected production of 57 million tons of soybean meal, 5.2% higher than last year and reaching a record high, may have notable effects on prices and market dynamics in the soybean industry. Soybean meal prices have stayed low because of this. In March, futures for soybean meal were worth $10.265 per bushel, and meal prices fell to $298.30 per ton, close to the lowest level seen in four years.
The Bottom Line
As we wrap up this week’s dairy market report, we’ll look at some of the challenges and chances affecting the industry. Have you considered the latest developments? Do you notice any patterns that align with your observations? You are welcome to join the conversation. Feel free to discuss what these changes mean for your dairy businesses. Get ahead with our tools that help you see what’s happening and decide what to do. Join our group, and let’s talk some more. We can make sense of the complicated dairy market and find ways to be successful if we work together. Your perspective is crucial. Together, we can shape the dairy industry’s future through meaningful conversations. Let’s make a difference, one discussion at a time!
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Discover the rise in Class III and Cheese futures trading. What does this mean for dairy farmers? Check out the market insights and trends affecting the dairy industry.
Summary:
There was a lot of activity this week in the dairy market, with over 1,100 Class III and 613 Cheese futures contracts traded. Spot cheese prices hung between $1.85 and $1.95, while block cheese prices dropped slightly. Rising dry whey futures helped balance things out. Butter futures broke out of a six-week range, ending at $2.60 thanks to renewed buyer interest. Meanwhile, Nonfat Dry Milk (NFDM) futures weakened, staying balanced but with lower trading volumes. These changes show expected and unexpected shifts, nudging dairy farmers and industry players to stay sharp and adjust to the changing market. Remember, “Be wary of a market that is not doing what you think it should be doing.”
Key Takeaways:
Class III and Cheese futures experienced noteworthy trading volumes, indicating active participation in the market.
The spot cheese market is stable, with products being cleared between $1.85 and $1.95, suggesting a consistent demand and supply equilibrium.
Butter futures showed resilience, closing at $2.60, propelled by renewed interest from end-user-type futures buyers.
NFDM futures and spot prices experienced weakness, illustrating a competitive yet balanced trading environment.
Overall, the Class III milk market exhibits modest strength despite fluctuations in spot cheese prices.
The dairy market faces potential fluctuations due to various external factors, yet growth opportunities remain prevalent.
Imagine this: a few years ago, trading more than 1,100 Class III contracts in a week seemed unlikely in the dairy world. But now, as we start 2025, that’s precisely what’s happened. This significant rise, which surprised both market insiders and observers, indicates a new confidence level in Class III milk prices and cheese futures. It shows the market’s strong momentum, even as the nation remembered former President Jimmy Carter. For the dairy industry, it’s a signal that substantial changes are underway, with more significant developments occurring beneath the surface.
Contract
Volume
Price Range
Recent Change
Class III Futures
1,100
$20.59 – $20.92
+$0.06 – +$0.08
Cheese Futures
613
$1.85 – $1.95
-0.0175
Butter Futures
N/A
$2.60 – $2.81
Steady
NFDM Futures
112
$1.36 per pound
-0.0050
A Vibrant Surge: Examining the Energetic Flows in Class III and Cheese Futures
The dairy market is buzzing, especially with Class III and cheese futures. The substantial increase in trading, with over 1,100 Class III and 613 Cheese futures contracts traded this week, underscores the decisive engagement of traders and its impact on market dynamics. This is crucial for dairy farmers and the entire industry. For farmers, it means they can anticipate changes in milk prices and demand, with Class III futures providing a glimpse of future milk values. The strong February and March futures prices, at $20.92 and $20.59 per hundredweight, signify a potentially robust market directly impacted by the surge in trading activity in Class III and cheese futures.
These shifts exemplify how economic factors such as supply chain disruptions, global demand fluctuations, and government policies influence production levels, pricing dynamics, and stakeholders’ decision-making within the dairy sector. The interest in cheese futures could mean cheese demand is changing, which has previously pushed record highs in Class III futures.
The current trading levels in Class III and cheese futures show a strong market with potential. This market strength helps everyone involved make smart decisions about the future, instilling optimism and hope.
Balancing Act: The Role of Spot Cheese Prices in Market Stability
The spot cheese prices are between $1.85 and $1.95 per pound, showing a “comfortable” market. This balance of supply and demand means the market is healthy and stable. Right now, everyone seems happy with these prices. When they stay like this, traders think these levels are fair. This keeps the market steady without too much or too little cheese. As a result, both buyers and sellers likely feel confident in making deals, which supports ongoing market activity.
Importance of Spot Prices:
Benchmark Level: The $1.85 to $1.95 range serves as a guide for forecasting future trends. Price fluctuations beyond this range could signal shifts in demand or supply challenges within the dairy industry.
Market Indicator: Stable prices here often indicate healthy supply chains, providing insights into production and consumption rates.
Trader Sentiment: Traders use these prices to shape strategies, manage risks, and plan contracts with this data in mind.
For those looking to profit, seeing spot cheese prices go above $1.95 is key. Exceeding this price point could increase trading activity and impact the futures market. This might indicate higher demand or limited supply, suitable for those with a positive outlook. However, it is recommended to be cautious when prices remain relatively stable without significant increases. As seen in domestic cheese demand, it can uniquely impact futures, given the global market conditions. Keeping these influences in mind helps stakeholders plan and prepare for changes that might affect the market. If prices stay steady, those involved will closely monitor any hints of a significant change. Paying attention to details reveals underlying factors that prices alone may not immediately show.
The Butter Bounce: Navigating the Recent Uptrend in Futures
Butter prices have been rising lately. They closed at $2.60, a jump from their six-week range of $2.45 to $2.58. The increase is due to more end-users purchasing futures, which indicates their confidence in the market’s strength and growth potential.
California, a major dairy producer, produces less milk, meaning less butter is available. This scarcity in supply contributes to maintaining high prices, illustrating the direct influence of demand and supply on the current market situation.
Butter futures have increased recently, especially for the second quarter, which closed at just over $2.81. This suggests that demand will stay strong despite tight supplies, matching the market’s expectations.
This scenario highlights how demand and changes in supply, like those in California, affect butter prices. Understanding these dynamics is crucial for making smart moves in the butter market.
Nonfat Dry Milk: Navigating the Delicate Balance of Market Fluctuations
The futures of nonfat dry milk (NFDM) and spot prices have dipped, showing some weakness. However, even though prices are down, the futures curve is holding steady, offering a bit of calm in these unpredictable times. This week, spot prices dropped by 0.50, reaching the lower end of their recent range. Only 112 futures contracts were traded, but the number of open interest grew by 78, indicating interest still exists.
Looking closer, global prices are affecting the NFDM market. U.S. prices are higher than those around the world. This means we might see a drop in U.S. prices. Still, the market is unpredictable, and things can change quickly, so it’s good to be cautious about unexpected moves. While U.S. powder prices can decrease, awareness of surprising market behavior is essential.
The slow movement in NFDM highlights influences like international competition and local market trends. Because of specific U.S. factors, the future could follow global patterns or go its own way. Keeping up-to-date with credible sources, such as previous reports, can help you make informed decisions in this constantly evolving market, giving you control over your choices.
Navigating the Waves: Class III Milk’s Resilience in a Shifting Market Landscape
Class III milk prices are rising well in the fast-changing dairy market, even with some challenges. This strength comes from increased demand and changes in supply needs. February and March futures prices have increased to $20.92 and $20.59 per hundredweight, adding six and eight cents, respectively. This rise shows that market players are feeling more confident.
Several factors are pushing prices up. New cheese plants need more milk, making spot milk supplies tighter. This is clear at this time of year as more plants start up. Competition over the milk supply is making the market busier.
The recent cold weather after the holidays significantly impacted milk flows and supply chains. The USDA reported that regional spot milk prices jumped to $0.50 per hundredweight over class, a substantial increase from before. This sudden price jump, caused by the weather-induced disruption in supply chains, is a clear example of the supply and demand forces affecting Class III milk prices.
These changes show the supply and demand forces affecting Class III milk prices. With new processing and environmental shifts, monitoring these trends is essential. The current situation presents a market with promising opportunities and challenges where implementing innovative strategies could yield positive results. Understanding these trends is key for those in the dairy business to handle market changes.
As the Week Wraps Up: Navigating Dairy Market’s Intriguing Shifts
Over the week, there have been some changes in the dairy market. Here’s what’s happening:
Spot Blocks: They closed at $1.8975 per pound, down by $0.075, and stayed below $1.90. Even so, Class III contracts went up, showing some hope. Three lots were traded, pointing to a careful but active market.
Nonfat Dry Milk (NDM): Prices dropped slightly, ending at $1.3650 per pound, down half a cent. Five loads were traded, and this slight decrease highlights the ongoing ups and downs in pricing due to factors both here and abroad.
Barrels and Butter: These prices stayed steady at $1.8700 and $2.6000 per pound, respectively. Butter’s steadiness is noteworthy because there has been interest in buying, which might mean stable prices.
These shifts are significant for dairy farmers. The drop in NDM prices might cut profits, but steady butter prices help balance things out. Even though cheese prices are under $1.90, the demand for Class III milk looks strong, which is a good sign despite market changes. Keeping an eye on these numbers is crucial for planning and making wise choices in the future.
Ripple Effects: How External Factors Influence Dairy Market Trends
The dairy market depends on supply and demand, but sometimes, outside events can change things. This week, to honor former President Jimmy Carter, agricultural markets closed early. A brief pause like this can affect trading volumes and the market’s feelings. With less time to trade, there are often fewer deals as traders focus on urgent needs or wait for regular hours.
Honoring a past president can make traders cautious, influencing their market outlook and decision-making processes. Despite this, more than 1,100 Class III contracts and 613 Cheese contracts were traded, showing some market strength. However, many traders were careful because the occasion was special.
Economically, holidays and memorials can cause a backlog in market activities. Once they’re over, there’s typically a rebound as everyone catches up, similar to when manufacturers resume work after holidays.
Although the key parts of the dairy market are still important, events like these can create ripples that affect both short-term actions and long-term market perceptions.
The Bottom Line
This week in the dairy markets, shifts in Class III and cheese futures, changes in butter prices, and interesting movements in nonfat dry milk have been seen. We’ve noticed shifts in Class III and Cheese futures, changes in butter prices, and some interesting movements in Nonfat Dry Milk. Class III milk has held firm, showing its resilience against outside pressures. Everyone in the dairy industry needs to stay updated and adaptable. Balancing local and global factors needs a smart strategy to handle market changes and plans. We want you to be part of the conversation—share your ideas and predictions in the comments.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Check out why Class III milk and cheese prices are reaching new highs, even with slow production. What’s behind this trend?
Summary:
Class III milk and cheese have kicked off 2025 with a bang, hitting new contract highs. After the holiday break, cheese prices are up, with barrels and blocks at $1.875 each. This rise comes even though cheese production dipped and there’s been a big demand for butter, which is pulling milk in a different direction. It’s an interesting mix, showing how interconnected the dairy market is. With more than 200 cheese options traded for the upcoming months, there’s a lot of excitement in futures trading. This strong start hints at good prospects for the dairy industry this year, offering potential gains for those involved in milk production and processing. As always, the dairy scene is changing fast, driven by shifts in consumer demand, production, global trade, and the economy.
Key Takeaways:
Cheese markets hit new contract highs with increased trading volumes as the holiday period concludes.
November’s cheese production was significantly lower than anticipated, falling 33 million lbs. short of forecasts due to various interpretations of demand and production dynamics.
Butter demand appears to be influencing milk allocation priorities, potentially detracting from cheese production.
Spot cheese average reached two-month highs, with barrel and block prices on the rise.
Class III milk futures have seen a robust start to 2025, reaching new contract highs through April.
Market movements indicate strong butter demand and higher NFDM/SMP production, suggesting shifts in consumer preferences and manufacturing outputs.
The dairy market continues to navigate the complexities of production adjustments while responding to dynamic demand patterns.
Who would’ve guessed that cheese, a simple dairy product, could stir such excitement? But here we are, with Class III milk and cheese markets hitting new highs, attracting everyone from dairy farmers to traders. Last year, cheese makers cut back production due to low demand, but prices are soaring. Spot cheese prices haven’t been this high in two months, with barrels reaching $1.875 and blocks seeing gains, too. Interest is buzzing in futures trading, with over 200 cheese options traded for upcoming months. A blend of low inventory, production challenges, and consumer demand makes this surge fascinating, setting the stage for the dairy industry’s 2025 outlook.
Category
October 2024
November 2024
YoY Change (%)
Cheese Production (lbs.)
1.226 billion
1.151 billion
-1.7%
Butter Production (lbs.)
164.4 million
167.8 million
+2.1%
NFDM/SMP Production (lbs.)
166.3 million
167.2 million
+0.5%
Class III Milk Price (per cwt)
$19.01
$19.50
+2.6%
Class III Milk and Cheese Markets Begin 2025 on a High Note
Welcome to our look at the shifting dairy markets as 2025 kicks off. We’ll examine the significant changes in Class III milk and cheese, focusing on the noteworthy rise in spot cheese prices to their highest in two months. We’ll explore why cheese production has dipped and how increased butter demand changes how dairy resources are used. This article provides a closer look at what’s happening in the industry, helping you understand market changes and what might come next.
Spot cheese prices have hit levels not seen in the past two months, with both barrel and block cheese prices climbing steadily. Barrel cheese rose to $1.8750 per pound, hitting a mark last reached in October, while block cheese climbed to $1.9400 per pound.
Futures trading volumes have also surged, reflecting renewed market interest after the holiday lull. For dairy farmers and industry players, these price movements are crucial. New contract highs for Class III indicate strong future performance and potential profitability for those in milk production and processing. With nearby Class III futures jumping after the spot cheese price rise—especially with February contracts hitting $21.12 per hundredweight—there’s a sense of optimism about market strength.
This trend reflects a mix of supply and demand factors. Despite weaker production reports suggesting sluggish cheese demand, inventory limits and production drops, like the 33 million-pound deviation from forecasts, show the market’s sensitivity to supply changes. These shifts challenge producers to adapt and offer opportunities for strategic decisions in production and marketing.
These developments highlight the need for vigilance and adaptability in the dairy market. Staying informed about current trends and forecasts is key to maximizing new opportunities and navigating potential challenges in this ever-changing landscape.
Cheese Production Takes a Curious Turn: Decoding the November Dip
Cheese production last November was relatively reduced, falling 33 million pounds short of expectations, leaving experts puzzled. Let’s examine why cheese output might have dipped and what this means for the dairy industry.
Weak Demand: Could low demand be the reason? Cheese consumption may have decreased by 3% in November compared to the previous year. We’ll know for sure once new import/export data is released. This isn’t the first time cheese makers have reduced production due to less local demand. Is this a repeat of what happened in early 2024?
Expected New Capacity: Cheesemakers might have expected new facilities to start producing cheese, but that didn’t happen as soon as they thought. If the new facilities were delayed, producers might have limited their cheese production, waiting for the new sites to operate thoroughly. It’s a puzzling and complex situation.
High Butter Demand: November also saw a massive demand for butter, which might have redirected milk from cheese making. It’s as if the high demand for butter redirected the milk from the cheese-making processes. However, even if butter demand soared, there was plenty of cream, raising questions about whether milk was genuinely taken from cheese or if there was just an excess of fat to use. Perhaps it’s prudent to approach this theory cautiously and delve deeper into its implications.
While all these ideas are possible, only time and future data will reveal the reason behind the mystery of cheese production. One thing is sure: the dairy industry is constantly in flux, requiring everyone involved to remain vigilant and adaptable. What do you think about this issue?
The Butter Demand Phenomenon: A Powerful Force Reshaping Dairy Resource Allocation
The dairy market is abuzz with excitement about unexpected butter demand shifts. In this industry, every gallon of milk serves a purpose, and right now, butter demand is steering those resources.
Recent reports offer an intriguing insight: Despite California’s production issues due to HPAI, butter and NFDM/SMP production are up, defying expectations. For those passionate about the dairy market, this underscores the robust domestic craving for butter, which is making significant waves.
But here’s the kicker: How is butter demand boosting production despite forecasts of decline? Plenty of cream is giving butter makers the chance to increase production. This cream, left over from weaker demand for other dairy products, allowed for a production boost to meet consumer demand and stock up for the future.
This unexpected rise in production presents many aspects to consider:
Continued butter demand likely means butter prices stay high, making it profitable.
With milk being directed to butter, cheese makers may face limitations unless new sources emerge or solutions are found.
The NFDM/SMP production increase suggests strategic planning, potentially buffering against future market changes.
Continued vigilance and analysis of these trends are imperative to anticipate market shifts and make informed decisions. The dairy industry must adapt quickly and ensure that milk is allocated efficiently to meet demand. Production increases amidst anticipated declines showcase industry resilience, offering growth opportunities and posing challenges in supply chain management and market positioning.
Swift Market Reactions Reflect Dynamics in Production and Demand
Market responses to recent changes in production and demand have been quick, especially with nonfat dry milk(NFDM) trades and spot butter prices. Spot butter prices reaching $2.5700 per pound indicate robust and sustained demand, suggesting stability in the market.
The NFDM market is also buzzing with activity. Recently, 11 lots were traded heavily, hinting at the market’s response to global price changes and economic data, especially from China.
Key factors affecting these markets:
Consumer demand changes: Strong butter demand may mean shifts in what consumers want, keeping prices up.
Production changes: Producers’ reaction to recent drops by boosting production will affect inventory and prices.
Global trade impacts: Import and export activities could heavily impact cheese supplies and demand.
Economic shifts: Wider economic conditions, such as GDP growth, inflation, and job rates, could affect consumers’ spending on dairy.
It’s essential to note that dairy markets often undergo seasonal fluctuations, such as price decreases post-holidays, which precede the emergence of new market trends for the upcoming year. With recent highs in Class III milk futures, market players are watchful, considering how far prices will rise or fall in the coming months. Successfully navigating these markets requires thoughtful planning and adaptability.
The Bottom Line
As we look into the dairy market, it’s clear that some significant changes are happening. Despite favorable market conditions, the unexpected decline in cheese production underscores the need for experts to monitor the situation closely. Equally important is the strong demand for butter, which affects how milk is used and changes production plans. These shifts highlight why it’s essential to stay updated with industry news. You can better understand and predict market trends by following insights from places like The Bullvine. This piece shows why staying informed and in touch with essential industry sources is key. Whether you’re strategizing for the future or making immediate business decisions, understanding these evolving trends will keep you ahead of the curve.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.