Cheese barrels just jumped 4.5¢ with zero offers left – your August milk check could be $1.20 fatter than you think.
EXECUTIVE SUMMARY: Look, I’ve been watching these markets for years, and today’s cheese action wasn’t your typical speculative nonsense – this was processors with real money chasing real product. Barrels shot up 4.5¢ to $1.6800 with six bids and zero offers at close, which translates to about $1.00+ boost in your August milk check.Here’s what caught my eye: fifteen actual trades in blocks, not paper shuffling. Feed costs are finally working in your favor too – corn’s down to $3.93, soybean meal at $264.40, giving you roughly 30-50¢/cwt breathing room. The global picture’s helping us out, with the euro stuck in neutral, keeping our cheese competitive overseas while Mexico continues to buy steadily.Bottom line? With Class III hitting $17.36 and feed costs easing, you’re looking at margins around $8.50/cwt over feed costs. Time to think about locking in some of that fall production.
KEY TAKEAWAYS
- Lock in 25-30% of your fall milk now – Class III futures at $16.80-$17.20 protect your margins while keeping upside if this rally extends. With processors bidding aggressively, this isn’t just a flash in the pan.
- Your August check jumps $0.75-$1.00/cwt higher than expected. Use that cash flow bump to pay down operating loans or pre-buy feed while corn’s showing backwardation (no big price spikes are expected).
- Regional supply tightness is real, despite national production being up 1.6%. Wisconsin’s holding steady with better cooling, but Midwest heat stress is creating pockets of tight milk that processors are paying a premium for.
- Global factors are finally working in our favor – the euro’s weakness keeps our cheese competitive, Mexico’s taking 25% of its cheese needs from us, and even China’s dairy imports are rebounding by 2% despite those crazy tariffs.
Want the full breakdown? Today’s report digs into the order book mechanics, global trade flows, and exactly where these margins are headed through the fall. Sometimes the best opportunities hide in plain sight.
Today’s dairy markets were all about one thing: the cheese complex caught fire. Barrels soared 4.5¢ and blocks edged up 0.5¢, driven by serious hustle from processors scrambling to cover needs. Translate that to your farm’s bottom line, and you’re looking at a $1.00+ boost to your August milk check. Additionally, as feed costs finally ease, this presents a prime opportunity to lock in margins for the fall.
Today’s Market Snapshot: July 30, 2025
| Product | Price | Change | Weekly Trend | What it Means for You |
| Cheese Blocks | $1.6725/lb | +0.50¢ | +1.67% | Your Class III check rises |
| Cheese Barrels | $1.6800/lb | +4.50¢ | +2.77% | Processors chase barrels aggressively |
| Butter | $2.4725/lb | -3.00¢ | -0.69% | Class IV holds its ground, insulating you from butter’s dip |
| NDM | $1.2900/lb | +0.50¢ | -0.85% | Export demand cautious but steady |
| Dry Whey | $0.5325/lb | -0.75¢ | -1.85% | Protein markets remain weak |
What really stood out was the volume—fifteen trades in blocks giving real weight to this rally. Processors were stepping up big, leaving six bids for barrels at close with no offers. That’s a clean break above the $1.67 level that had capped prices all month.
Meanwhile, butter took a small dip, but its impact on Class IV remains minimal—exactly what you want when you’re focused on protecting milk check stability.
Behind the Move: Deep Dive into Market Mechanics
Here’s where the order book gets interesting… The barrel bid stack was loaded deep—I’m talking bids at $1.6775, $1.6750, and $1.6725 before the market even opened, and those offers got snapped up fast. By close, six bids remained with zero offers, signaling serious conviction from commercial buyers.
Volume-weighted average price patterns tell the real story. Blocks traded around a $1.6710 VWAP versus the $1.6725 close, showing late-session strength rather than early-morning hype that fades. The bid-ask spreads narrowed from about 0.75¢ early morning to just 0.25¢ by close—that’s processors showing real confidence.
However, butter is testing support around $2.47, and if that breaks, we could see a move toward $2.40-2.42.
Market participants suggest cheese prices may have additional upside potential if current demand patterns continue, with some eyeing the $1.75-$1.80 range.
Production Reality Check: The Numbers Don’t Lie
While the market signals a tight supply, let’s discuss what’s actually happening on farms. Recent USDA data shows May milk production up 1.6% year-over-year to 19.93 billion pounds—the third straight month of gains. Cow numbers climbed by 114,000 head since May 2024.
That tight supply narrative? It’s regional, not national. Wisconsin farms are holding production steady thanks to improved cooling systems (those tunnel ventilation investments from the past few years are really paying off now). Some Midwest areas show typical summer production dips due to heat stress, but nothing catastrophic.
Industry observations suggest measured caution in the heifer market—quality bred animals are moving steadily around $2,800-3,200, but there’s no panic buying for expansion.
How Global Markets Are Actually Boosting Your Price
Key insight: The euro has remained around 1.08-1.11 against the dollar, keeping our cheese competitively priced for export. That’s actually working in our favor right now.
The challenge: Freight costs keep climbing—adding roughly 3-4¢ per pound to delivered powder prices in Asian markets.
The ace in the hole: Mexico continues steady cheese imports, covering about 25% of their consumption, and they’re not backing away from current price levels.
Fonterra forecasts 1,490 million kg of milk solids for 2025/26—that’s our biggest powder competitor. EU output is expected to slip slightly to 149.4 million metric tons.
China’s the wildcard. Dairy imports are projected to grow 2% in 2025, after three years of decline, but hefty tariffs still make U.S. products a tough sell, despite a growing appetite.
Feed Markets Finally Working in Your Favor
Feed prices have finally cooled off—September corn hovers at $3.9275, soybean meal at $264.40, putting producers about 30-50¢/cwt better off compared to seasonal averages.
Here’s how it breaks down regionally:
- Upper Midwest: Corn basis runs 10-15¢ under futures—practically free money
- California: Higher transport costs but hay prices finally steadied around $280-300/ton
- Southeast: Managing soybean meal tightness from port delays, but it’s workable
The mild backwardation in corn futures (current prices higher than future prices) suggests stable or easing feed costs ahead.
Bottom line: Feed costs for efficient operations are around $8.50-$ 9.00/cwt. With Class III at $17.36, that gives you roughly $8.36-8.86/cwt margin over feed costs.
Your Action Plan: What to Do in the Next 72 Hours
Pricing Strategy: Lock in 25-30% of your September-November milk at current Class III futures ($16.80-$17.20) to protect margins while maintaining upside potential if this rally extends.
Feed Purchasing: Consider prebuying feed at current prices to avoid winter supply volatility and lock in these favorable levels.
Cash Flow Moves: Use anticipated $0.75-$1.00 higher August milk checks to pay down operating debt or build cash reserves for future opportunities.
Breeding & Herd Management: Industry sentiment remains cautious. Quality heifers are moving steadily, but there’s no rush toward expansion—hold steady unless you’ve got compelling reasons to adjust.
The Road Ahead: August and Beyond
August is expected to be constructive, with momentum likely to push Class III prices into the $17.00-$17.50 range. Butter should hold around $2.47 as seasonal demand picks up, and Class IV futures remain steady at $19.28.
Fall becomes interesting with typical post-heat production increases in September and October. If cheese demand holds at current levels through that seasonal bump, Q4 Class III could hover around $16.50-$17.00.
Risk factors? Weather events, trade policy shifts, and export demand volatility remain wildcards—especially in an election year.
What’s encouraging? Real commercial buying—not just speculative chatter. When processors bid aggressively for spot cheese and pay a premium for it, that suggests supply-demand fundamentals still support price strength.
Feed costs finally easing after months of pressure adds further optimism for margin recovery. After the squeeze we’ve seen this year, that’s something worth getting excited about.
Questions about locking in fall margins or how basis levels affect your operation? That’s exactly what TheBullVine.com is here for. Use our margin calculators or connect with our analysts to build a pricing strategy that protects your bottom line while positioning you for whatever comes next.
Complete references and supporting documentation are available upon request by contacting the editorial team at editor@thebullvine.com.
Learn More:
- 7 Sires That Will Add Pounds of Fat to Your Herd – This tactical guide reveals specific sires that can boost milk components. It offers a practical way to increase your milk check’s value through genetic selection, directly complementing the market report’s focus on maximizing revenue from current prices.
- Dairy Farmers of Canada’s 2024 Outlook: A Blend of Optimism and Caution – This strategic overview provides a big-picture look at the economic forces shaping the Canadian dairy industry. It adds a crucial layer of long-term context to the daily market fluctuations, helping you better position your operation for future trends.
- The Future of Dairy Farming: How Technology is Revolutionizing the Industry – Explore how innovations like automation and data analytics are creating more resilient and profitable farms. This forward-looking piece shows how to leverage technology to control costs and buffer against the market volatility discussed in the main report.
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