Cheddar Barrels jump 3.75¢ as cheese demand surges; Dry Whey slumps 0.50¢. Mixed dairy markets show diverging trends amid global supply shifts.
Executive Summary: The April 2 CME dairy markets saw sharp gains in Cheddar Barrels (+3.75¢) and modest growth in Blocks (+0.75¢), driven by tight inventories and new processing capacity, while Dry Whey fell (-0.50¢) on weak global demand. Trading activity highlighted bullish cheese sentiment, with Cheddar Blocks seeing 11 trades and no offers at close. Globally, EU milk production declined (-0.2%) as U.S. herds expanded (+34k cows), while USDA forecasts project Q2 Class III milk at .50/cwt despite current futures lagging. Analysts warn of cheese oversupply risks as 2025 processing capacity grows 6%, urging producers to prioritize flexible pricing strategies.
Key Takeaways
- Cheese divergence: Barrel prices surged 3.75¢ on tight supplies vs. Block’s 0.75¢ gain
- Global split: EU milk output shrinks (-0.2%) as U.S./NZ herds expand (+34k cows; +3.1% production)
- Forecast gap: USDA’s $18.50/cwt Class III outlook exceeds current $17.13 futures, signaling market skepticism
- Strategic play: Producers advised to leverage cheese-driven pricing amid whey/butter uncertainty
The Chicago Mercantile Exchange (CME) dairy markets showed significant strength in cheese prices today, with Cheddar Barrels leading gains at +3.75¢, while Dry Whey continued its downward trend. Butter and Nonfat Dry Milk prices remained stable today as market participants evaluated shifting supply and demand fundamentals across dairy commodities.
Key Price Changes & Market Trends
| Product | Closing Price | Change from Yesterday |
| Cheddar Block | $1.6650/lb | +0.75¢ |
| Cheddar Barrel | $1.6975/lb | +3.75¢ |
| Butter | $2.3400/lb | Unchanged |
| NDM Grade A | $1.1725/lb | Unchanged |
| Dry Whey | $0.4900/lb | -0.50¢ |
Cheddar Barrel prices jumped significantly by 3.75¢, reflecting tightening cheese inventories and strong domestic demand. Cheddar Blocks moved more modestly upward by 0.75¢, continuing the price strength observed earlier this week. Butter prices remained unchanged at $2.3400/lb as the market balanced ample production against steady retail demand. Nonfat Dry Milk held steady at $1.1725/lb, while Dry Whey prices declined by 0.50¢ to $0.4900/lb amid continued pressure from global market conditions.
Volume and Trading Activity
Today’s CME dairy session saw varied trading activity across products, with cheese markets demonstrating the strongest participation:
| Product | Trades | Bids | Offers |
| Cheddar Block | 11 | 2 | 0 |
| Butter | 7 | 2 | 4 |
| Cheddar Barrel | 3 | 3 | 5 |
| NDM Grade A | 3 | 6 | 4 |
| Dry Whey | 2 | 3 | 0 |
Cheddar Blocks dominated trading activity with 11 trades completed, indicating strong buyer interest with no available offers at the close – a bullish signal for near-term market direction. Butter saw moderate activity with seven trades and a slight imbalance toward selling interest with four offers against two bids. NDM Grade A exhibited strong bidding interest with six bids against four offers, suggesting potential upward price pressure despite an unchanged settlement today. Dry Whey trading remained limited, with just two trades executed.
Global Context
The current dairy market dynamics reflect broader global trends that influence U.S. prices. The European Union’s dairy sector is experiencing contraction in 2025, with milk deliveries projected to decline by 0.2% year-over-year due to regulatory pressures, persistent margin compression, and accelerating herd reduction. This production ceiling in Europe creates potential opportunities for U.S. exporters.
In contrast to European constraints, the United States dairy sector demonstrates robust expansion through 2025, with producers adding 34,000 dairy cows between July and December 2024. New Zealand’s milk production is also showing positive momentum, with December 2024 collections increasing by 1.4% year-over-year and total seasonal production growth reaching 3.1%. This growth is driven by favorable weather conditions and improved farm profitability.
Global milk supply from the major exporting regions is forecast to grow by 0.8% in 2025, with gains anticipated in all significant areas for the first time since 2020. This broad-based production growth could pressure global dairy prices if not matched by corresponding demand.
Forecasts and Analysis
Current futures prices and USDA projections indicate divergent expectations for dairy markets in the coming months:
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