Cheese prices just jumped 10¢—tight milk supplies and rising feed costs demand smarter milk pricing and genomic testing strategies for better margins.
Executive Summary: The recent 10-cent surge in CME spot cheese prices shatters the complacency around milk pricing strategies, exposing outdated assumptions about supply and demand balance. This sharp rally, fueled by aggressive pre-holiday buying and tightening milk flows due to summer heat stress, signals a potential $1.00+/cwt lift in July Class III milk checks. Butter and powder markets remain steady, supporting Class IV values near $18.83/cwt, while feed costs hold firm with corn at $4.09/bu and soybean meal near $290/ton—pressuring margins but also incentivizing efficiency gains. Globally, U.S. dairy remains competitive thanks to a stable dollar and strong export demand from Mexico and Southeast Asia, contrasting with modest production growth in New Zealand and the EU. Progressive dairy operations that integrate genomic testing for feed efficiency and milk yield alongside proactive risk management will capitalize on these market dynamics. It’s time to challenge your pricing and production assumptions—are you ready to capture the upside?
Key Takeaways
- Lock in premium milk pricing: The 10¢ cheese block rally could boost Class III milk checks by over $1.00/cwt in July, directly increasing farm revenue.
- Optimize feed efficiency: With feed costs steady but high, genomic testing focused on feed conversion ratios can improve profitability by reducing input costs up to 5%.
- Manage heat stress proactively: Summer heat is already curbing milk yield in key regions; implementing cooling strategies can preserve production and maintain butterfat percentages.
- Leverage export demand: Strong international markets—especially Mexico and Southeast Asia—support powder and whey prices; aligning production to these trends can stabilize income streams.
- Hedge with precision: Futures markets lag spot prices; using Dairy Revenue Protection (DRP) and options can safeguard margins amid volatile global conditions.
Today’s dramatic 10-cent surge in CME spot cheese blocks signals a major tailwind for farm milk prices. This rally, paired with steady butter and powder markets, points to a stronger July milk check and improved margins for producers, just as summer heat starts to pinch milk flows.
1. Key Price Changes & Market Trends
| Product | Closing Price | Daily Change | 30-Day Trend | Impact on Farmers |
| Cheese Blocks | $1.7200/lb | +10.00¢ | +6.8% | Major Class III boost; higher premiums likely |
| Cheese Barrels | $1.6950/lb | +3.00¢ | +4.1% | Reinforces cheese market strength |
| Butter | $2.6000/lb | +3.75¢ | -1.5% | Supports Class IV; offsets powder weakness |
| NDM | $1.2525/lb | +0.25¢ | +1.8% | Stable; export demand remains firm |
| Dry Whey | $0.5950/lb | +1.00¢ | +3.5% | Adds bullish support to Class III |
Commentary:
Cheddar blocks rose sharply by 10 cents on robust trading volume (12 trades, nine bids), reflecting strong demand from both retail and foodservice channels ahead of the July 4th holiday. Barrels followed, confirming market-wide strength. Butter’s gain further supports Class IV, while NDM and whey prices remain steady, reflecting solid export demand. If spot cheese holds, July’s Class III could settle well above the current $17.75/cwt future.
2. Volume and Trading Activity
Trading Activity Summary:
- Cheese Blocks: 12 trades, nine bids, zero offers; tight bid/ask spread indicates strong buying interest.
- Cheese Barrels: 6 trades, one bid, one offer; moderate activity with firm undertone.
- Butter: 3 trades, four bids, two offers; steady interest, slight upward price movement.
- NDM: 1 trade, one bid, zero offers; minimal activity, stable pricing.
- Dry Whey: 1 trade, six bids, one offer; increased bidding supports price uptick.
Notable Patterns:
Cheese blocks exhibited the highest trading activity, with a tight bid/ask spread and aggressive buying. Butter and whey also saw increased bidding, suggesting processors are securing product ahead of holiday demand.
3. Global Context
Export Demand:
- According to USDA Dairy Market News and recent USDA GAIN reports, U.S. NDM and whey exports remain strong, particularly to Mexico and Southeast Asia.
- A stable U.S. dollar continues to support U.S. competitiveness in global dairy markets.
Global Production Trends:
- New Zealand’s milk production has been seasonally steady, while the EU has reported modest year-over-year growth (European Commission Milk Market Observatory, June 2025).
- These trends keep the global supply adequate but not excessive, supporting U.S. export opportunities.
International Benchmarks:
- U.S. cheese prices are now competitive with European and Oceanian benchmarks, further stimulating export demand (USDA Dairy Market News, June 2025).
4. Forecasts and Analysis
USDA/CME Forecasts:
- USDA projects Class III milk prices to average $18.50/cwt for Q3 2025, supported by strong cheese demand but tempered by higher feed costs (USDA Livestock, Dairy, and Poultry Outlook, June 2025).
- CME July Class III futures settled at $17.75/cwt, but spot market strength suggests upside risk.
- Class IV futures remain robust at $18.83/cwt, reflecting continued butter strength.
Actionable Insights:
- If spot cheese prices persist, final July Class III settlements could exceed current futures, offering a pricing opportunity for unhedged milk.
- Producers should monitor global weather and feed markets, as volatility could impact both input costs and export competitiveness.
5. Market Sentiment
General Sentiment:
- The market is bullish on cheese, with traders citing “aggressive pre-holiday buying and robust foodservice demand” (Progressive Dairy, June 2025).
- One Midwest cooperative analyst noted, “Processors are scrambling to secure product as summer heat crimps milk output and demand remains strong.”
- Overall, the sentiment is optimistic but cautious, with an eye on the weather and export trends.
6. Closing Summary & Recommendations
Summary:
Today’s CME dairy markets were led by a sharp cheese rally, supported by steady butter and powder prices. Trading activity was robust in cheese, with strong bidding across the board. Export demand and competitive global positioning continue to underpin U.S. dairy’s outlook.
Recommendations:
- Consider forward contracting or Dairy Revenue Protection (DRP) for July/August milk to lock in gains.
- Monitor feed markets and global production trends for margin management.
- Engage with cooperatives on premium programs and stay alert for updates on FMMO reform.
7. Visuals and Formatting
- Tables: Presented above for price and volume data.
- Charts: (Recommended for publication) Line graph comparing Class III futures and USDA projections, bar chart of weekly cheese price trends.
- Formatting: Bold section headers, green for price increases, red for decreases, Arial font, clear axis labels.
8. Handling Low-Activity Days
While today was high-volatility, on quieter days, focus on:
- Weather forecasts and their impact on production.
- Feed cost trends and global market developments.
- Upcoming USDA reports or international trade policy changes.
Today’s cheese rally is a wake-up call—milk checks are poised to improve, but volatility remains. Use this window to lock in profits, review risk management, and stay nimble as summer weather and global demand continue to shape the market. For daily actionable insights and tools, keep TheBullVine.com as your go-to source—and let us know what’s working on your farm.
Complete references and supporting documentation are available upon request by contacting the editorial team at editor@thebullvine.com.
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