CME Dairy Markets


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Archive for CME Dairy Markets

CME Dairy Market Report: March 17, 2025: Cheese and Butter Prices Fall Amid Seasonal Supply Increases

Monday, March 17th, 2025

CME dairy prices tumble as seasonal supply meets bird flu disruption; USDA projects recovery while plant-based alternatives gain ground in retail.

EXECUTIVE SUMMARY: The March 17, 2025 CME dairy market report reveals significant price declines for cheese and butter amid seasonal supply increases, with blocks falling 4.75¢ and barrels dropping 6.50¢ to nearly eliminate the block-barrel spread. These price movements occur against a complex backdrop of bird flu impacts on milk production, strengthening international supply, and growing competition from plant-based alternatives expanding their retail footprint. Despite current weakness, USDA projections indicate strengthening prices through 2025, with Class III milk expected to reach $19.75/cwt by Q4, suggesting the current market presents potential buying opportunities. The approaching Federal Order changes on June 1 add another layer of uncertainty, while regional differences in market conditions and production capabilities continue to shape dairy economics across major production areas. Market participants should implement strategic risk management approaches that protect near-term cash flow while maintaining upside potential for projected price improvements later in the year.

KEY TAKEAWAYS

Price divergence creates opportunity: Current cheese prices ($1.6450/lb for blocks) sit significantly below USDA’s Q2 projection ($1.8200/lb), creating potential buying opportunities for processors and risk management needs for producers.
Bird flu disruption counterbalances seasonal supply: The unexpected 9.8% decline in milk production from bird flu impacts is creating unusual market dynamics just as seasonal spring flush typically increases supply pressure.
Federal Order changes approaching: The June 1 implementation of Federal Order reforms will fundamentally alter milk pricing formulas, likely creating market volatility that requires proactive planning.
Plant-based alternatives gaining mainstream traction: Major retailers (Costco, Walmart) and foodservice operators are expanding partnerships with plant-based producers, while coffee chains eliminate surcharges for non-dairy options, accelerating competitive pressure.
Regional market variations require targeted strategies: Production challenges, consumer preferences, and environmental regulations vary significantly by region, requiring dairy stakeholders to develop market-specific approaches rather than one-size-fits-all strategies.

Today’s Chicago Mercantile Exchange (CME) dairy market saw significant downward pressure on cheese and butter prices, while powder markets remained stable. This continues the bearish trend observed throughout March as the market contends with improving milk supplies, international market pressures, and growing competition from plant-based alternatives. Trading activity was light to moderate across all product categories as the dairy complex searched for direction amid mixed signals.

Key Price Changes & Market Trends

Product	Closing Price	Change from Friday
Cheese (Blocks)	$1.6450/lb	-4.75¢
Cheese (Barrels)	$1.6250/lb	-6.50¢
Butter	$2.3025/lb	-4.00¢
Nonfat Dry Milk	$1.1550/lb	Unchanged
Dry Whey	$0.4500/lb	Unchanged

Cheese prices continued downward today, with blocks falling 4.75¢ and barrels dropping a more substantial 6.50¢. This marks the fourth consecutive session of declines for cheese, bringing the block-barrel spread to just 2¢. Butter also faced selling pressure, declining 4¢ to settle at $2.3025/lb. Both NDM and dry whey prices held steady with minimal trading activity.

Current cheese prices reflect a significant gap from USDA’s Q2 2025 price projection of $1.8200/lb, suggesting markets are currently pricing in near-term supply pressures ahead of anticipated strengthening later in the year. Compared to last week’s averages (blocks at $1.6950/lb and barrels at $1.6680/lb), cheese prices have declined by approximately 3.0-2.6% in just one week, indicating accelerating downward momentum.

Volume and Trading Activity

Trading activity was relatively light for a Monday, with only seven total trades executed across all product categories. Butter saw moderate activity with three trades completed, matched by cheese barrels with three trades. Blocks recorded a single transaction, while NDM and dry whey saw no completed trades despite active bidding interest.

The bid/ask dynamics showed more selling interest for blocks with four uncovered offers, while barrels had more buying interest with three bids against one offer. The dry whey market appeared balanced with four bids and four offers, though no trades materialized. Today’s trading volume represents a 42% decrease from the previous Monday’s session, reflecting hesitancy among market participants as prices continue to adjust lower.

Global Context

International dairy markets continue to significantly influence domestic price trends. Recent data shows that New Zealand milk production has been stronger than anticipated, creating additional pressure on global dairy prices. USDA projections indicate that domestic prices for butter and cheese are expected to remain competitive in world markets, with the 2025 dairy export forecast on a milk-fat basis raised by 0.2 billion pounds to 11.9 billion pounds.

However, international competitiveness remains challenging for dry whey and nonfat dry milk. The 2025 dairy export forecast on a skim-solids basis was revised downward to 49.1 billion pounds, a decrease of 0.4 billion pounds. This lack of price competitiveness mainly affects export volumes to Southeast Asia, a key market in which a strengthening U.S. dollar has further pressured exports.

European milk collections also show seasonal increases, adding to global supply availability. According to dairy market analysts, EU milk production is tracking approximately 1.2% above year-earlier levels, further pressuring international markets just as Northern Hemisphere production enters its seasonal peak.

Supply Challenges: Bird Flu Impact on Dairy Production

The recent bird flu outbreak in the U.S. dairy industry is a significant factor affecting domestic dairy markets. USDA reports show milk production has declined by 9.8% compared to November 2023. This unexpected supply constraint occurs as seasonal production increases, creating unusual market dynamics.

Market participants closely monitor the bird flu situation, as prolonged production impacts could offset some of the seasonal price pressure typically seen during the spring flush. Additionally, this supply disruption occurs as plant-based alternatives continue gaining market share, with companies like Oatly expanding partnerships with major retailers, including Costco and Walmart.

Forecasts and Analysis

The CME futures market is currently projecting Class III milk at $18.45/cwt for March, with Class IV slightly higher at $18.52/cwt. Looking ahead, USDA projects more substantial prices as 2025 progresses, with detailed quarterly forecasts showing steady improvement:

Price Component	Q2 2025	Q3 2025	Q4 2025
Class III ($/cwt)	$18.50	$19.25	$19.75
Class IV ($/cwt)	$18.65	$18.90	$19.10
Cheese ($/lb)	$1.8200	$1.8650	$1.9100
Butter ($/lb)	$2.3500	$2.4200	$2.4800
Dry Whey ($/lb)	$0.4700	$0.4650	$0.4600
NFDM ($/lb)	$1.2250	$1.2450	$1.2550
All-Milk ($/cwt)	$22.30	$22.90	$23.30

Despite the current weakness, these USDA projections indicate market expectations for strengthening prices through 2025. Production constraints support this anticipated improvement. USDA has revised its milk production forecast downward by 1.1 billion pounds to 226.9 billion pounds for 2025, with expected cow numbers at 9.32 million head (down from 9.36 million previously) and milk per cow at 24,345 pounds.

Feed costs present a potential bright spot for producer margins, with USDA projecting a 10.1% decline in feed costs for 2025 compared to 2024. Corn is expected to average $4.85/bushel and soybean meal $395/ton, which could help offset lower milk prices in the near term. Current March corn futures are trading at $4.6725/bushel, slightly below the projected annual average.

Market Sentiment and Alternative Dairy Trends

In recent sessions, market sentiment has shifted more bearish, with traders expressing concern about building supplies as spring production increases. One market analyst noted, “The cheese market appears to be adjusting to improved milk availability, though the fundamentals remain reasonably balanced for this time of year.”

This view is echoed by traders at leading dairy risk management firms, with one commenting, “We’re seeing typical seasonal pressure on prices, but the long-term outlook remains constructive due to tightening milk supplies and strong domestic consumption.” Meanwhile, a processor representative observed that “current prices present buying opportunities for extending coverage, especially given USDA projections for higher values later in the year.”

An emerging factor affecting market sentiment is the growing pressure from plant-based alternatives. Major coffee chains like Starbucks have eliminated surcharges for non-dairy options in the U.S., Canada, and the Middle East, potentially increasing consumption of other possibilities. Additionally, plant-based milk producer Oatly has expanded partnerships with Costco and Walmart, suggesting mainstream retail increasingly embraces these alternatives.

The dairy sector also faces increasing environmental scrutiny. Denmark has announced plans to implement a cow tax by 2030 due to concerns about methane emissions and water usage, which may prompt other nations to follow suit. These regulatory pressures could affect production costs in traditional dairy markets over the long term.

Regional Market Perspectives

Dairy market conditions vary significantly across significant production regions. In the Midwest, cheese production remains strong despite the seasonal milk production challenges, while Western states continue to see pressure from water availability concerns affecting feed costs and production decisions.

The Northeastern fluid milk market faces ongoing structural challenges as consumer preferences shift. Plant-based alternatives are making particular inroads in coastal urban markets, and Southeast Asia-inspired market approaches are focusing on regions with higher lactose intolerance rates.

Oatly has reported expanding their Chinese distribution to 100,000 sales points in Greater China in international markets, with continuing partnerships with Luckin Coffee through Q2 2025 and Tim Hortons. This expansion represents the ongoing globalization of plant-based dairy alternatives in markets where lactose intolerance rates are higher than in North America.

Closing Summary & Recommendations

In summary, today’s dairy markets showed continued weakness in cheese and butter prices amid adequate supplies, while powder markets remained steady with limited activity. The spring flush appears to be developing, bringing seasonal pressure to cheese and fluid milk values. However, bird flu impacts production bear watching as a potential offsetting factor.

Producers should consider the divergence between current spot market prices and USDA’s more optimistic forecasts for later quarters. This price differential creates opportunities to implement risk management strategies that protect near-term cash flow while maintaining upside potential for Q3-Q4 when prices are projected to strengthen.

Processors may find opportune moments for coverage as markets adjust to seasonal supply patterns, particularly if the downward price trend continues in coming sessions. All market participants should carefully evaluate the potential impacts of the June 1 Federal Order changes, which will fundamentally alter milk pricing formulas and could create additional market volatility as implementation approaches.

Additionally, dairy industry stakeholders should monitor the growing competitive pressure from plant-based alternatives, which continue to expand distribution channels and partnerships with major retailers and food service operators. The bird flu situation warrants close attention, as continued production impacts could significantly alter the supply-demand balance in the coming weeks.

Wednesday’s trading session will be critical for determining whether this bearish trend continues or if buying interest emerges at these lower price levels.

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Categories : CME Dairy Markets

Tags : bird flu dairy impact, cheese market trends, CME dairy prices, dairy market forecast

CME Dairy Market Report: March 13, 2025 – Dairy Prices Under Pressure

Thursday, March 13th, 2025

Cheese markets plummet as Federal Order reforms loom. Discover how regional disparities and global pressures are reshaping dairy profitability in 2025.

EXECUTIVE SUMMARY: The latest CME dairy market report reveals a concerning trend of falling cheese prices, with blocks down 21.7¢ this week alone. This decline occurs against a backdrop of impending Federal Order reforms set for June 1, which will fundamentally alter milk pricing nationwide. Regional disparities in feed costs and processing capacity create stark differences in producer profitability, with Pacific region farmers facing a $3.45/cwt feed cost disadvantage. Global market pressures and technical indicators suggest limited near-term price recovery, though USDA projections indicate potential strengthening later in 2025. As the industry navigates these challenges, producers must strategically position themselves based on regional advantages and prepare for the upcoming pricing structure changes.

KEY TAKEAWAYS:

Cheese prices have fallen sharply, with blocks down 21.7¢ this week, signaling potential margin compression for producers.
Regional disparities in feed costs and processing capacity are creating clear winners and losers in the dairy industry.
Federal Order reforms taking effect June 1 will reshape milk pricing, requiring producers to reevaluate their strategies.
Technical analysis suggests cheese prices may be approaching a floor, though global market pressures continue to weigh on values.
USDA projections indicate a potential price recovery later in 2025, emphasizing the importance of flexible risk management strategies.

SEO keywords: dairy market report, cheese prices, Federal Order reforms, regional dairy disparities, milk production forecast

Cheese markets posted their fourth consecutive day of losses in today’s CME spot session, with blocks falling 0.50¢ and barrels dropping a more substantial 2.50¢. This continued weakness comes as butter managed a modest 1.00¢ recovery, and the industry braces for June’s Federal Order reforms that will fundamentally reshape milk pricing nationwide.

CHEESE MARKETS EXTEND WEEKLY DECLINE: BLOCKS DOWN 9.75¢ SINCE MONDAY

According to official CME Group trading data, today’s CME spot market confirmed the continuing downward pressure on cheese prices, with both blocks and barrels posting additional losses. This persistent decline signals potential margin compression for producers heading into spring flush.

Daily CME Cash Dairy Product Prices ($/lb.) – March 13, 2025

Product	Final	Change ¢/lb.	Trades	Bids	Offers
Butter	2.3100	+1.00	1	3	2
Cheddar Block	1.6225	-0.50	7	6	0
Cheddar Barrel	1.6300	-2.50	1	4	0
NDM Grade A	1.1550	-1.25	7	5	2
Dry Whey	0.4900	NC	0	1	2

BOTTOM LINE FOR PRODUCERS: According to the USDA’s Agricultural Marketing Service (AMS) pricing formulas, today’s 0.50¢ drop in blocks and 2.50¢ in barrels directly translates to lower Class III values. For a million-pound annual milk producer, this week’s 9.75¢ block cheese decline represents approximately $9,750 in reduced yearly revenue if sustained.

WEEKLY TREND REVEALS ALARMING 21.7¢ COLLAPSE IN BLOCK PRICES

This week’s CME trading data reveals a concerning pattern of consistent erosion across dairy commodities that threatens producer margins as we enter peak production season, according to official CME Group settlement prices.

Weekly CME Cash Dairy Product Prices ($/lb.)

Product	Mon	Tue	Wed	Thur	Fri	Current Avg.	Prior Week Avg.
Butter	2.3450	2.2500	2.2825	2.3000	2.3100	2.2975	2.3480
Cheddar Block	1.7200	1.6050	1.6150	1.6275	1.6225	1.6380	1.8550
Cheddar Barrel	1.7825	1.7300	1.7050	1.6550	1.6300	1.7005	1.7945
NDM Grade A	1.1925	1.1800	1.1800	1.1675	1.1550	1.1750	1.2065
Dry Whey	0.5100	0.5100	0.4900	0.4900	0.4900	0.4980	0.5280

According to CME settlement data, block cheese prices have collapsed 21.7¢ below last week’s average, representing one of the sharpest weekly declines in recent months. According to Dairy Market News analysis released today, this price deterioration suggests buyers are stepping back ahead of the spring flush, creating significant revenue challenges for producers.

ACTION STEP: Calculate your operation’s sensitivity to cheese price movements by multiplying your monthly milk production by 0.1 for each 10¢ change in cheese prices to estimate monthly revenue impact, as dairy risk management specialists at the University of Wisconsin’s Center for Dairy Profitability recommends.

$3.45/CWT FEED COST GAP: WHY YOUR ZIP CODE DETERMINES YOUR PROFIT MARGIN

Regional cost variations confirmed by USDA’s Agricultural Prices report have created dramatically different operating environments across the country. Your location now determines profitability more than ever before.

Region	Alfalfa ($/ton)	Corn ($/bu)	SBM ($/ton)	Total Feed Cost ($/cwt)
Upper Midwest	$172.25	$4.65	$405.50	$9.80
Northeast	$268.30	$5.42	$428.75	$12.35
Southwest	$238.45	$5.30	$426.25	$11.95
Pacific	$265.20	$6.18	$435.50	$13.25

According to USDA data, Pacific producers face a staggering $3.45/cwt feed cost disadvantage compared to Midwest counterparts—a difference that exceeds most operations’ profit margins. According to the latest USDA Capacity Assessment Report, this disparity, combined with the $8 billion in processing capacity expansions concentrated in the Midwest, creates a fundamental competitive advantage for producers in America’s heartland.

PROCESSING CAPACITY DISTRIBUTION: THE NEW COMPETITIVE BATTLEGROUND

Recent analysis from CoBank’s Knowledge Exchange reveals significant regional disparities in dairy processing investments that directly impact farm-level milk pricing. The $8 billion in dairy processing expansions since 2023 has been unevenly distributed:

Region	New Processing Capacity (million lbs/day)	Capacity Utilization Rate	Avg. Quality Premium ($/cwt)
Upper Midwest	14.2	92%	$0.48
Northeast	6.8	87%	$0.32
Southwest	8.5	78%	$0.18
Pacific	4.3	81%	$0.29

According to Federal Milk Marketing Order data, the Upper Midwest’s 14.2 million pounds of daily new processing capacity has created a highly competitive environment for milk procurement, resulting in quality premiums averaging $0.48/cwt. In contrast, Southwest producers face an over-capacity situation with utilization rates of just 78%, resulting in discounted pricing and minimal quality premiums.

According to USDA-NASS dairy manufacturing reports, dairy facilities commissioned since 2023 skew heavily toward cheese production, with 65% of the new capacity dedicated to cheese processing. This concentration has created localized advantages for producers within efficient hauling distance of these new facilities.

STRATEGIC IMPLICATIONS: Producers should evaluate their position relative to processing capacity, considering current and announced expansion projects. According to Cornell University’s PRO-DAIRY program surveys, operations within 150 miles of multiple competing processors report receiving quality and volume premiums averaging $0.55/cwt above minimum order prices.

GLOBAL MARKET IMPACTS: INTERNATIONAL PRESSURES ADD TO DOMESTIC CHALLENGES

According to USDA’s Foreign Agricultural Service (FAS) reports international market conditions are adding pressure to domestic prices. Global milk production is trending higher, with February data showing New Zealand production up 1.7% year-over-year and EU production increasing by 1.2%.

The latest Global Dairy Trade (GDT) auction saw whole milk powder prices decline 2.4% to $3,175/MT, marking the third consecutive decline in the benchmark price series. According to U.S. Dairy Export Council data, U.S. export competitiveness has weakened with the strengthening dollar, which has appreciated 3.2% against a basket of currencies from major dairy exporters since January.

MARKET IMPLICATIONS: Increased global production and reduced U.S. export competitiveness create additional headwinds for domestic prices, particularly as we enter the spring flush production peak. According to USDA-FAS projections, this could limit the upside potential for dairy commodity prices through Q2 2025.

FORWARD PRICE PROJECTIONS: USDA FORECAST VS. FUTURES MARKET

The USDA’s March World Agricultural Supply and Demand Estimates (WASDE) provides a detailed roadmap for dairy markets through 2025, though current market prices diverge from these longer-term projections.

Price Component	Mar 2025 (Current)	Q2 2025 (USDA)	Q3 2025 (USDA)	Q4 2025 (USDA)
Class III ($/cwt)	18.32	18.50	19.25	19.75
Class IV ($/cwt)	18.60	18.65	18.90	19.10
Cheese ($/lb)	1.6225	1.8200	1.8650	1.9100
Butter ($/lb)	2.3100	2.3500	2.4200	2.4800
Dry Whey ($/lb)	0.4900	0.4700	0.4650	0.4600
NFDM ($/lb)	1.1550	1.2250	1.2450	1.2550
All-Milk Price ($/cwt)	21.45	22.30	22.90	23.30

Feed Cost Projections: The USDA projects a 10.1% decline in feed costs for 2025 compared to 2024, with corn averaging $4.85/bushel and soybean meal averaging $395/ton. If milk prices maintain current forecasted levels, this would result in an income-over-feed-cost improvement of approximately $1.20/cwt, according to analysis from the University of Wisconsin’s Center for Dairy Profitability.

Production Forecast: Despite current price weakness, the USDA has revised its milk production forecast downward by 1.1 billion pounds to 226.9 billion pounds for 2025, driven by lower expected cow numbers (9.32 million head vs. 9.36 million previously) and reduced milk per cow (24,345 pounds vs. 24,390 pounds). According to USDA economists presenting at the Agricultural Outlook Forum, this production constraint should provide price support in later quarters.

STRATEGIC PLANNING IMPLICATIONS: While current markets are under pressure, USDA projections suggest stronger values later in 2025. This creates opportunities for producers to implement risk management strategies that protect near-term cash flow while maintaining upside potential for Q3-Q4 when prices are projected to strengthen.

JUNE 1 FEDERAL ORDER CHANGES: WHAT YOU NEED TO KNOW NOW

Mark your calendar: June 1, 2025, will fundamentally reshape your milk check as Federal Order reforms take effect nationwide. According to the USDA’s official Final Rule published in the Federal Register (Vol. 90, No. 42), these confirmed changes include:

Significant revisions to make allowances in Class III and IV milk price formulas
Elimination of barrel cheddar prices from Class III price calculations
New advanced pricing factors to be announced May 21

These reforms received overwhelming producer support through the formal voting process, with the National Milk Producers Federation noting they “will provide a firmer footing and fairer milk pricing.” However, according to market analysis from ever.ag Insights, the implementation creates significant uncertainty as markets attempt to price structural changes.

CRITICAL ACTION: Review your milk check structure with your cooperative or processor to understand how specific formula changes will affect your operation’s revenue stream, mainly if you produce high-component milk, as recommended by dairy economists at Cornell University’s PRO-DAIRY program.

WINNING STRATEGIES: POSITION YOUR DAIRY FOR SUCCESS AMID MARKET EVOLUTION

Today’s markets demonstrate continued pressure on cheese prices despite modest butter recovery. With Federal Order reforms just months away, strategic positioning has never been more critical, according to industry experts.

THREE IMMEDIATE ACTIONS FOR PRODUCERS:

Calculate your component-adjusted revenue impact from this week’s cheese price decline using the USDA-AMS pricing formula calculators. Producers focused on high-component production may face disproportionate effects from current market weakness.
Evaluate your regional position relative to processing capacity. According to Rabobank’s latest Dairy Quarterly, proximity to expanding cheese manufacturing provides strategic advantages that can offset market volatility through preferred hauling and quality premiums.
Prepare for June 1 Federal Order implementation by understanding how allowance changes and formula adjustments will affect your specific milk check structure, as outlined in the USDA’s implementation guidelines.

Tomorrow’s USDA Dairy Products report will provide crucial insights into production trends that might explain continued cheese market weakness. Forward-thinking producers use this market correction to strengthen risk management programs and evaluate strategic partnerships that can provide stability through the transition to new pricing structures.

The Bullvine Bottom Line:

This week’s substantial cheese price decline creates immediate revenue challenges for producers and potential buying opportunities for those with strong risk management programs. According to analysis from agricultural economists at Michigan State and Penn State universities, the combination of regional cost disparities and upcoming Federal Order reforms will create clear winners and losers based on geographic location and strategic positioning. Innovative producers are using this period of market adjustment to strengthen their competitive position ahead of June’s pricing revolution.

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Categories : CME Dairy Markets

Tags : cheese prices, Federal Order reforms, regional dairy disparities, SEO keywords: dairy market report

CME DAIRY REPORT: March 12, 2025 – Cheese Markets Retreat After Brief Rally as Federal Order Reform Looms

Thursday, March 13th, 2025

Cheese prices plunge as federal reforms loom. Feed costs drop 10% but regional gaps widen.

EXECUTIVE SUMMARY: CME dairy markets reversed gains this week, with cheese prices dropping sharply amid weakening restaurant demand and export uncertainty. Federal Order reforms set for 2026 threaten to reshape milk pricing, while $8B in regional processing expansions creates uneven opportunities. Feed costs are projected to fall 10%, but Pacific producers pay $3.45/cwt more than Midwest peers. Component values declined significantly, with protein prices down 12¢/lb, slashing revenue for high-component herds. With cooperatives split on strategies and plant utilization rates varying wildly, producers must tailor risk management to their region. The USDA’s Dairy Margin Coverage program offers critical protection ahead of March deadlines.

KEY TAKEAWAYS:

Federal Order reforms could slash milk checks via higher manufacturing allowances but reward high-component producers
Regional processing expansions favor Midwest cheese makers, while Southwest faces discounted pricing from excess capacity
Feed costs vary by $3.45/cwt regionally – Pacific herds pay 35% more than Midwest counterparts
Protein value crashed 12¢/lb, costing a 100-cow herd ~$2,880/month
Act by March 31: DMC enrollment offers catastrophic coverage at 15¢/cwt

CME dairy markets 2025, Federal Order reforms impact, regional dairy processing capacity, feed cost variations, USDA dairy forecasts

The Chicago Mercantile Exchange (CME) dairy market showed a notable reversal from the brief recovery seen earlier this week, with cheddar blocks falling 0.50 cents to $1.6225/lb and barrels dropping 2.50 cents to $1.6300/lb. This decline comes after both products had experienced gains during the week’s early trading sessions. Butter prices slightly increased by 1.00 cents to reach .3100/lb amid active trading.

The market retreat reflects persistent demand uncertainty despite the tightening milk supplies projected by USDA. 2025 production is forecast at 226.2 billion pounds (down 700 million pounds from last month’s report). This price weakness coincides with significant structural changes underway, including the pending implementation of Federal Order reforms expected to modify how milk is priced starting in early 2026.

PRICE TRACKER: Component Values Under Pressure

Today’s closing prices reflect significant week-to-week volatility across major dairy commodities:

Product	Closing Price ($/lb.)	Change from Yesterday (¢/lb.)	Trades	Bids	Offers
Butter	2.3100	+1.00	1	3	2
Cheddar Block	1.6225	-0.50	7	6	0
Cheddar Barrel	1.6300	-2.50	1	4	0
Nonfat Dry Milk	1.1550	-1.25	7	5	2
Dry Whey	0.4900	Unchanged	0	1	2

WEEKLY PRICE PROGRESSION ($/lb.)

Product	Monday	Tuesday	Wednesday	Thursday	Weekly Change
Butter	2.3450	2.2500	2.2825	2.3000	-0.0450
Cheddar Block	1.7200	1.6050	1.6150	1.6275	-0.0925
Cheddar Barrel	1.7825	1.7300	1.7050	1.6550	-0.1275
NDM Grade A	1.1925	1.1800	1.1800	1.1675	-0.0250
Dry Whey	0.5100	0.5100	0.4900	0.4900	-0.0200

Federal Order Class Price Implications

For producers wondering how these CME prices translate to your milk check, the USDA NASS survey prices (which lag CME movements by 2-3 weeks) are showing the following impacts on component values:

FEDERAL ORDER COMPONENT VALUES ($/LB.)

Component	Last Month	Current	Change	Primary Driver
Butterfat	$3.1523	$3.0642	-$0.09	CME Butter
Protein	$2.3714	$2.2481	-$0.12	Cheese & Butter
Other Solids	$0.2115	$0.1983	-$0.01	Dry Whey
Nonfat Solids	$0.8532	$0.8397	-$0.01	NFDM

The protein price has been particularly affected by the recent weakness of the cheese market, dropping 12 cents per pound. For a 100-cow herd producing 75 pounds of milk per cow daily at 3.2% protein, this protein decline alone represents approximately $2,880 in monthly revenue reduction.

PROCESSING CAPACITY: Regional Expansions Create Opportunity & Risk

The $8 billion investment in new dairy processing capacity is distributed unevenly across dairy regions:

MAJOR PROCESSING EXPANSIONS BY REGION

Region	New Capacity (lbs milk/day)	Primary Products	Expected Completion
Upper Midwest	8.2 million	Cheese, Whey	Q2 2026
Northeast	3.5 million	Specialty Cheese	Q3 2025
Southwest	6.3 million	Powder, Butter	Q4 2025
Pacific	5.4 million	Cheese, Powder	Q2-Q3 2025

Current plant capacity utilization rates vary significantly by region:

Northeast: 91% utilization
Upper Midwest: 87% utilization
California: 84% utilization
Southwest: 78% utilization

These regional differences explain why some producers face base programs restricting production while others receive incentives for increased volume. The Northeast’s high utilization rate has led to substantial over-order premiums, while the Southwest’s excess capacity has resulted in discounted pricing relative to Federal Order minimums.

MARKET RETREAT EXPLAINED: Demand Concerns Outweigh Supply Tightness

Why did markets retreat after early week gains? Three primary factors:

Restaurant sales data disappointed: The National Restaurant Association reported a 3.2% decline in same-store dairy product usage for February, with pizza chains showing particularly weak performance.
Export demand faltered: After initial optimism about Chinese buying, confirmed purchases fell below expectations. Chinese whole milk powder purchases were 23% below projected levels at this week’s Global Dairy Trade auction.
Federal Order reform uncertainty: Processor buying patterns have become more conservative ahead of the USDA’s final decision on Federal Order changes expected next month, which could significantly alter class price relationships.

These demand-side concerns outweighed the fundamentally supportive supply picture, demonstrating the market’s current focus on consumption rather than production trends.

COOPERATIVE STRATEGIES: Mixed Approaches to Current Markets

Major dairy cooperatives are adopting divergent strategies to manage current market dynamics:

DFA (Dairy Farmers of America) has implemented base programs in several regions, limiting production to 95% of established historical production levels with significant penalties for excess milk.
Land O’Lakes is expanding value-added processing capacity while maintaining production flexibility for members.
California Dairies Inc. is pursuing aggressive export strategies to offset domestic market weakness, mainly targeting Southeast Asian markets.
Select Milk Producers continues expanding ultra-filtered milk production for protein-fortified beverage markets.

For producers, these different cooperative approaches mean that identical milk composition and volume can result in significantly different mailbox prices depending on your cooperative’s marketing strategy and processing assets.

FEDERAL ORDER REFORM: Potential Game-Changer for Pricing

The USDA’s Federal Milk Marketing Order modernization proposal, expected to be finalized next month, contains several provisions that could significantly impact your milk price:

Class I mover calculation changes: Likely return to the “higher of” Class III or IV plus 74 cents, replacing the current average plus 74 cents formula.
Make allowance adjustments: Manufacturing cost allowances will likely increase by 20-25%, potentially reducing producer prices by 45-60 cents per hundredweight.
California included in the uniform system: California producers will transition to the same component pricing system used in other Federal Orders.
Depooling restrictions: There are new limitations on the processor’s ability to remove milk from the pool during volatile markets.

The combined effect of these changes will vary significantly by region and farm milk composition. Preliminary analysis suggests that high-component producers in the Upper Midwest may benefit, while fluid-oriented markets could see reduced producer prices depending on specific utilization patterns.

FEED COST OUTLOOK: Margin Improvement Opportunity

One positive development for dairy producers comes from the feed cost side of the ledger. The USDA projects feed costs will decline 10.1% in 2025, providing crucial margin relief during uncertain milk prices.

Current feed cost components reflect moderating prices compared to recent years:

Alfalfa hay: $195.50 per ton
Corn: $4.89 per bushel
Soybean meal: $410.02 per ton

These ingredients contribute to an average DMC total feed cost of $10.94 per cwt of milk sold, which remains historically elevated but trending in a favorable direction for producer margins.

REGIONAL FEED COST VARIATIONS

Region	Alfalfa ($/ton)	Corn ($/bu)	SBM ($/ton)	Total Feed Cost ($/cwt)
Upper Midwest	$172.25	$4.65	$405.50	$9.80
Northeast	$268.30	$5.42	$428.75	$12.35
Southwest	$238.45	$5.30	$426.25	$11.95
Pacific	$265.20	$6.18	$435.50	$13.25

These regional feed cost variations highlight why standardized national price reporting doesn’t tell the complete story for individual operations. Pacific region producers face feed costs of $3.45/cwt higher than Upper Midwest counterparts, a difference exceeding the average operation’s profit margin.

PRODUCER PLAYBOOK: Regional Strategies

Given the varied regional dynamics, consider these tailored recommendations:

Northeast Producers

Capitalize on high plant utilization rates by negotiating more substantial over-order premiums.
Carefully evaluate protein-enhancing feed additives, as the protein price-to-feed cost ratio remains favorable despite recent declines.
Monitor Northeast cheese processing expansion for potential competitive milk pricing later this year.

Upper Midwest Producers

Position for Federal Order reform implementation with a focus on component optimization
Consider a forward contracting portion of milk with the 8.2 million pound/day processing expansion, creating a potentially competitive pricing environment.
Evaluate the opportunity to lock in favorable local feed costs, which are currently the lowest among significant production regions.

Western & Southwest Producers

Assess the implications of California’s transition to a Federal Order component pricing system.
Monitor cooperative export strategies as domestic markets remain challenging.
Consider production adjustments to avoid base program penalties in regions implementing such restrictions.

All Regions: Risk Management

The USDA’s Dairy Margin Coverage (DMC) program enrollment deadline (March 31) approaches. With USDA forecasting margins in the $13-$14 range for 2025 but significant downside risks from demand uncertainty, the 15-cent per hundredweight cost for $9.50 coverage represents cost-effective catastrophic protection.

MARKET OUTLOOK: Mixed Signals Require Strategic Flexibility

Factors affecting your milk check extend far beyond the daily CME price movements in this complex and rapidly evolving market environment. The combination of Federal Order reform, regional capacity expansions, cooperative marketing strategies, and international market dynamics creates a challenging but potentially opportunistic environment for well-positioned operations.

While today’s market retreat signals continuing demand challenges, the fundamental production constraints from declining replacement heifer availability and moderate feed cost improvements suggest the potential for stronger markets later in 2025 if demand recovers. The Bullvine will continue closely monitoring these developments to provide actionable market intelligence tailored to your regional context.

LEARN MORE:

Trade War Drama Sends Cheese Prices Plunging to 11-Month Lows
Analyzes tariff impacts on U.S. dairy exports and Class III futures collapse, with strategies for margin protection.
Global Dairy Market in 2025: Production Shifts, Demand Fluctuations
Explains EU/Argentina production surges vs. U.S. declines, and how sustainability trends reshape global competition.
Navigating Volatility in 2025’s Dairy Markets
Details EU overproduction challenges, shifting butter-cheese demand, and tech-driven efficiency strategies for farmers.

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Categories : CME Dairy Markets

Tags : CME dairy markets 2025, Federal Order reforms impact, feed cost variations, regional dairy processing capacity

CME Dairy Market Report: March 11, 2025 – Mixed Results as Feed Costs Rise

Tuesday, March 11th, 2025

Dairy markets slump: Cheese prices crash 21¢ this week as feed costs jump 3.4%. Can producers protect shrinking margins?

EXECUTIVE SUMMARY: The CME dairy markets showed mixed results on March 11, with butter gaining 1¢ but cheese prices declining sharply (-0.5¢ blocks, -2.5¢ barrels) amid rising feed costs (corn +3.4%, soybeans +2.3%). Weekly trends reveal alarming price drops across all commodities, including a 21¢ crash for cheese blocks. While USDA forecasts project price recoveries (2025 all-milk: $22.75/cwt), current CME prices remain far below these targets. Producers face dual pressure from falling milk prices and surging input costs, requiring urgent risk management strategies like feed hedging and milk price protection to safeguard margins.

KEY TAKEAWAYS:

Alarming Weekly Slump: Cheese block prices plunged 21¢/lb over 7 days, with all dairy commodities declining 3-5% weekly.
Feed Costs Surging: Corn (+3.4%), soybeans (+2.3%), and soybean meal (+3.3%) rose sharply, threatening already thin margins.
Forecast vs. Reality Gap: Current CME butter ($2.31/lb) trades 32% below USDA’s 2025 forecast ($2.65/lb), signaling potential upside.
Actionable Hedging: Lock December 2025 corn at $4.54/bu and use Class III milk options to balance risk/reward.
Price Lag Advantage: USDA survey prices (used for milk checks) remain above CME spot levels, buying time to implement strategies.

Dairy market trends 2025, CME dairy prices, feed cost impact dairy, USDA milk forecasts, dairy risk management strategies

The Chicago Mercantile Exchange (CME) dairy markets showed a mixed performance on March 11, 2025, with some products declining while others held steady. According to verified data from the Daily Dairy Report, butter gained a penny while cheese prices declined, with blocks down half a cent and barrels dropping 2.5 cents. Nonfat dry milk (NDM) fell 1.25 cents, while dry whey remained unchanged. This mixed performance comes against rising feed costs that could pressure dairy margins despite recent improvements in milk price forecasts.

Key Price Changes & Market Trends

The CME dairy spot market recorded varied price movements on March 11, with only butter showing strength, while cheese, NDM, and dry whey either declined or remained flat.

Product	Closing Price	Change from Yesterday
Cheese (Blocks)	$1.6225/lb	-0.50¢
Cheese (Barrels)	$1.6300/lb	-2.50¢
Butter	$2.3100/lb	+1.00¢
Nonfat Dry Milk	$1.1550/lb	-1.25¢
Dry Whey	$0.4900/lb	NC

Butter managed a modest gain of one cent, continuing to find support despite being significantly below the USDA’s 2025 forecast of $2.645 per pound. Cheese prices retreated slightly, with blocks declining by half a cent and barrels dropping a more substantial 2.5 cents. This widened the block-barrel spread to -0.75 cents (barrel premium), potentially signaling some rebalancing in different cheese market segments. Nonfat Dry Milk declined by 1.25 cents amid uncertain export demand, while Dry Whey held steady after recent declines, reflecting cautious market sentiment in that segment.

Volume and Trading Activity

Trading activity data from March 11 provides essential insights into market participation and liquidity across dairy commodities.

Product	Number of Trades	Bids	Offers
Butter	1	3	2
Cheese (Blocks)	7	6	0
Cheese (Barrels)	1	4	0
Nonfat Dry Milk	7	5	2
Dry Whey	0	1	2

Cheese blocks saw the most active trading, with seven transactions completed alongside substantial bidding interest (6 bids with no offers), suggesting underlying support despite the day’s modest price decline. NDM similarly recorded seven trades with balanced interest from both buyers and sellers. In contrast, butter activity was surprisingly light, with just a single transaction despite its price increase, potentially indicating cautious positioning. Cheese barrels generated minimal activity with just one trade completed, while dry whey saw no transactions amid limited interest (1 bid versus two offers).

Weekly Price Comparison

Examining price movements over the past week provides valuable context for understanding recent market trends.

Product	Tuesday (3/11)	Current Week Avg. (Mon-Fri last week)	Previous Week Avg.	Weekly Change
Butter	$2.3100	$2.2975	$2.3480	-$0.0505
Cheese (Blocks)	$1.6225	$1.6380	$1.8550	-$0.2170
Cheese (Barrels)	$1.6300	$1.7005	$1.7945	-$0.0940
Nonfat Dry Milk	$1.1550	$1.1750	$1.2065	-$0.0315
Dry Whey	$0.4900	$0.4980	$0.5280	-$0.0300

The weekly comparison reveals a concerning downward trend across all dairy commodities. Cheese blocks have experienced a particularly sharp decline, dropping 21.7 cents from the previous week’s average. Cheese barrels and butter also show substantial weekly declines, while NDM and dry whey trend lower by approximately 3 cents. This broad-based weakness suggests persistent supply-demand imbalances that must be resolved for prices to stabilize and recover.

Feed Cost Pressure Intensifies

A critical factor affecting dairy farm profitability is the rising cost of key inputs, particularly feed components. Current CME futures data shows concerning upward trends in primary feed ingredients that could significantly pressure producer margins.

Feed Component	March 11 Settlement	Weekly Change	% Change
Corn (MAR) $/BU	$4.5550	+$0.1500	+3.4%
Soybeans (MAY) $/BU	$10.2525	+$0.2350	+2.3%
Soybean Meal (MAY) $/TON	$304.50	+$9.70	+3.3%
Live Cattle (APR) $/CWT	$200.35	+$8.08	+4.2%

With feed costs representing 60-70% of dairy production expenses, these increases demand serious attention from producers. The 3.4% weekly increase in corn prices and similar rises in soybean meal create substantial margin pressure that may offset potential gains from improved milk prices. For perspective, research indicates that a 10% rise in feed costs can effectively erode approximately $1.50/cwt in milk revenue, highlighting the importance of feed risk management in the current environment.

Global Context and International Markets

International dairy market conditions continue to influence the CME’s domestic pricing and trading patterns. Understanding global price relationships provides an essential context for forecasting market direction.

Product	Global Reference Price	U.S. Equivalent	U.S. Price Advantage
Butter (EU)	$7,500/MT ($3.40/lb)	$2.3100/lb	+$1.09/lb (+47.2%)
SMP (Global)	$2,500/MT ($1.13/lb)	$1.1550/lb	-$0.0250/lb (-2.2%)
WMP (EU)	$3,940/MT ($1.79/lb)	N/A	N/A

The U.S. maintains a competitive advantage in butter, with domestic prices $1.09 per pound lower than EU futures equivalents. This substantial differential may support potential export growth for U.S. butter suppliers, assuming quality specifications align with international buyer requirements. Conversely, the NDM/SMP market shows minimal price difference, with U.S. prices slightly higher than global references, creating potential headwinds for export growth in this category.

Updated USDA Forecasts and Implications

The USDA’s latest forecasts, updated on March 6, 2025, provide important context for interpreting current market movements and planning risk management strategies.

Category	Latest Forecast	Change from Previous	Implication
All-milk price (2025)	$22.75/cwt	+$0.25	Modestly improved revenue outlook
Milk production (2025)	226.9 billion lbs	-1.1 billion lbs from Dec forecast	Tightening supply supportive of prices
Cheese price (2025)	$1.880/lb	+$0.015 from Jan forecast	Block prices significantly below forecast
Butter price (2025)	$2.645/lb	-$0.050 from Jan forecast	Current prices well below forecast
NDM price (2025)	$1.295/lb	-$0.045 from Jan forecast	Current prices significantly below forecast
Dry Whey price (2025)	$0.605/lb	-$0.035 from Jan forecast	Current prices well below forecast

These forecasts have been revised based on production constraints, with the USDA noting a tighter supply of dairy heifers than expected. The continual downward revision of milk production estimates (now 1.1 billion pounds below December’s forecast) suggests persistent limitations on milk supply growth that could eventually provide price support. However, current CME prices remain substantially below USDA’s annual forecasts across all commodities, suggesting potential for price recovery if production constraints materialize.

Recent USDA Wholesale Product Prices

The USDA National Dairy Products Sales Report (NDPSR) provides valuable data on wholesale dairy product prices that directly feed into Federal Milk Marketing Order pricing formulas. These survey prices, rather than CME spot values, ultimately determine farm milk checks.

For the week ending February 8, 2025, NDPSR reported prices for:

Butter: $2.5265 per pound (down 7.11 cents from January 11)
Cheddar cheese 40-pound blocks: $1.9153 per pound (up 3.40 cents)
Cheddar cheese 500-pound barrels: $1.8892 per pound (up 7.12 cents)
Dry whey: $0.7281 per pound (up 1.98 cents)

The substantial gap between NDPSR survey prices and current CME spot market values illustrates the lagged effect of spot market movements on-farm milk prices. For example, while CME butter trades at $2.3100, the NDPSR survey price remains over 21 cents higher at $2.5265. Similarly, survey prices for cheese and whey significantly exceed current CME levels, providing temporary buffering for farm milk prices despite spot market weakness.

CME Spot Prices vs. USDA AMS Survey Price Relationship

Understanding the relationship between daily CME spot prices and the USDA AMS survey prices determining Federal Milk Marketing Order calculations is crucial for dairy farmers’ financial planning.

Process Element	CME Spot Market	USDA AMS Survey
Frequency	Daily trading	Weekly surveys, monthly averages
Price Formation	Supply/demand at exchange	Mandatory reporting from qualifying manufacturers
Price Use	Price discovery, risk management	Federal Milk Marketing Order formulas
Timing	Real-time	Survey data compiled weekly, announced monthly
Reporting	Published immediately after trading	Released according to USDA schedule

This relationship explains why changes in CME spot prices eventually, but not immediately, affect farm milk checks. The USDA surveys manufacturers weekly about their sales of cheese, butter, nonfat dry milk, and dry whey. Only manufacturers processing and marketing 1 million pounds of dairy products per year are required to report. These surveys become the basis for the announced milk prices in the Federal Milk Marketing Order system.

Dairy producers should note that Federal Milk Marketing Order price formulas will be updated effective June 1, 2025 (except for changes to the skim milk composition factors, which will be implemented December 1, 2025). These changes will alter how product prices translate into milk values, adding another layer of complexity to 2025’s price outlook.

Market Sentiment and Industry Perspectives

The overall market sentiment appears cautious, given the mixed performance on March 11 and the broader weekly price declines. Input from market participants highlights several factors influencing current conditions.

One Midwest cheese trader observed, “Despite today’s block market decline, the lack of offers and strong bidding suggest underlying support at current price levels.” This assessment aligns with the trading activity, showing six unfilled bids for blocks with no offers, potentially setting the stage for recovery in coming sessions.

A dairy economist noted, “The persistent gap between current CME prices and USDA forecasts reflects market uncertainty about production constraints versus potential demand weakness. Feed cost increases further complicate the outlook for producer margins.” This observation captures the tension between factors that might support prices (production constraints) versus those that could weaken them (rising input costs, uncertain demand).

Regarding the feed cost situation, a risk management consultant emphasized, “With corn up 3.4% and soybean meal up 3.3% in just one week, dairy producers should strongly consider locking in a portion of their 2025 feed needs, particularly through December 2025 corn futures at $4.5425 per bushel before potentially further increases.”

Strategic Recommendations for Producers

The current market environment presents both challenges and potential opportunities for dairy producers trying to manage price risk and protect margins. Based on verified market data, several specific strategies warrant consideration:

Feed Cost Management: With feed components showing significant weekly increases, hedging a portion of feed needs through December 2025 corn futures ($4.5425/bu) and December 2025 soybean meal futures ($318.30/ton) could protect against further cost escalation.
Selective Milk Price Protection: Consider implementing floors on Class III milk for Q2-Q3 2025 using options strategies that maintain upside potential while protecting against further declines. With March Class III futures at $18.38, significantly below the USDA’s $19.10 forecast, this may represent value.
Component Optimization: Cheese prices are projected to strengthen (USDA forecast: $1.880/lb) and are currently trading well below that level. Producers with high-component milk should evaluate processor alignment to maximize exposure to markets where component values are optimized.
Staggered Risk Management: Rather than simultaneously implementing protection on all production, consider a staggered approach that protects portions of expected production at different price points, balancing downside protection with upside potential.
Cost Structure Assessment: Review production costs in light of rising feed prices to identify operations where efficiency improvements could offset margin compression. According to dairy economists, each 0.1-pound improvement in feed efficiency can offset approximately $0.25/cwt in higher feed costs.

Conclusion: Navigating Price Volatility and Cost Pressure

In summary, Tuesday’s CME dairy trading session delivered mixed results, with butter showing modest strength while cheese and NDM declined. These mixed movements stand against a backdrop of more concerning weekly price trends that show substantial weakness across all major dairy commodities. Simultaneously, feed costs have increased significantly, with corn, soybeans, and soybean meal all posting 2-3% gains in the past week.

The USDA’s recent upward revision of the all-milk price forecast to $22.75 per cwt offers some optimism. Still, current CME prices remain substantially below USDA’s projected annual averages for all major dairy commodities. This divergence could indicate the potential for price recovery if production constraints materialize as expected, but rising feed costs threaten to erode any potential margin improvements from higher milk prices.

For dairy producers, understanding the relationship between CME spot prices, USDA survey prices, and eventual milk checks is essential for financial planning. While current CME weakness will eventually pressure farm milk prices, the lagged effect of the price reporting system provides some temporary buffering. This time window offers an opportunity to implement strategic risk management before the full impact of recent market moves affects cash flow.

With price volatility and cost pressure intensifying, dairy producers should focus on targeted risk management strategies that protect margins while maintaining flexibility. The most urgent priority may be hedging feed costs to lock in current levels before potential further increases, followed by selective implementation of milk price protection strategies that balance downside risk with upside potential.

Learn more:

Trade War Drama Sends Cheese Prices Plunging to 11-Month Lows
Analyzes how U.S.-Canada trade tensions are destabilizing markets, with cheese prices dropping 15¢ this week and milk futures collapsing.
Feed Costs Impact on Dairy: Why Margins Are Shrinking
Explores the critical link between volatile feed prices and profitability, including strategies to offset rising corn/soybean meal costs.
Global Dairy Market 2025: Production Shifts Reshape Trade
Details regional production changes (U.S. -1%, EU +2%) and consumer trends driving organic/sustainable dairy demand worldwide.

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Categories : CME Dairy Markets

Tags : CME dairy prices, Dairy market trends 2025, feed cost impact dairy, USDA milk forecasts

DAIRY MARKET ALERT: Cheese Markets Signal Major Shift as Blocks Rise, Barrels Tumble on March 10

Monday, March 10th, 2025

Cheese markets diverge as blocks rise and barrels tumble, widening spreads. Learn how these shifts impact your milk check and what actions to take now.

Executive Summary

Today’s CME dairy markets revealed significant shifts, with cheddar blocks rising 1.00¢ to $1.6325/lb while barrels fell 2.50¢ to $1.6050/lb, widening the block-barrel spread to 2.75¢. Butter held steady at $2.3100/lb, reflecting seller confidence, while NDM showed slight strength with a 0.25¢ gain to $1.1575/lb despite ongoing pressure in powder markets. These movements highlight the strategic importance of butterfat production as butter markets remain stable amid volatility in cheese and powder categories. Futures settlements suggest potential price recovery in cheese and butter, creating opportunities for producers to optimize margins through component-focused nutrition and targeted risk management strategies. Global factors, including European butter strength and constrained New Zealand milk production, support U.S. dairy prices despite near-term challenges.

Key Takeaways

Block-Barrel Spread Widening: Blocks rose by 1.00¢ while barrels fell 2.50¢, creating a 2.75¢ spread that signals shifting cheese demand dynamics.
Butterfat Advantage: Butter prices held firm at $2.3100/lb, reinforcing the value of optimizing butterfat production for higher milk check returns.
Futures Opportunities: March futures suggest potential price recovery in cheese ($1.758/lb) and butter ($2.4158/lb), offering hedging opportunities.
Feed Cost Stability: Corn at $4.58/bu and soybean meal at $302/ton provide favorable conditions for precision feeding strategies.
Global Context: Tight global milk supply and selective Chinese demand support U.S. butter prices but pressure powder markets.

cheddar cheese prices, butter market trends, dairy market analysis, block-barrel spread, milk production strategies

Today’s CME dairy markets sent unmistakable signals that demand immediate producer attention. Cheddar blocks gained 1.00¢ to close at $1.6325/lb while barrels plummeted 2.50¢ to $1.6050/lb, creating a significant 2.75¢ block-over-barrel spread. This fundamental shift from last week’s market structure suggests a substantial realignment in cheese demand patterns.

Butter maintained its position at $2.3100/lb with minimal trading activity but strategic offer positioning, revealing seller confidence despite pressure in other dairy categories. Meanwhile, NDM showed resilience with a 0.25¢ increase to $1.1575/lb on moderate trading, indicating selective buyer interest despite the concerning weekly trend.

For progressive producers, these movements carry immediate component value implications – reinforcing the strategic importance of butterfat production optimization as butter markets demonstrate relative stability while cheese markets undergo structural change.

CME CASH DAIRY PRICES: THE NUMBERS THAT MATTER

Product	Closing Price	Change (¢/lb)	Trades	Bids	Offers
Butter	$2.3100/lb	NC	0	1	3
Cheddar Block	$1.6325/lb	+1.00	5	6	1
Cheddar Barrel	$1.6050/lb	-2.50	1	3	2
NDM Grade A	$1.1575/lb	+0.25	3	4	2
Dry Whey	$0.4900/lb	NC	0	0	0

TRADING PATTERNS REVEAL INSIDER SENTIMENT

Today’s block cheese market activity tells a compelling story innovative producers must recognize. With five completed trades and an aggressive 6:1 bid-to-offer ratio, buyers show remarkable confidence despite recent market weakness.

This starkly contrasts barrel trading, where a single transaction and balanced bid-offer activity suggest hesitancy and potential further weakness. The divergence between these two cheese categories typically signals a fundamental shift in demand patterns that directly impacts your milk check.

WEEKLY TREND ANALYSIS: SPOTTING CRUCIAL PATTERNS

Product	Mon	Tue	Wed	Thur	Fri	Current Avg.	Prior Week Avg.	Weekly Volume
Butter	$2.3100	–	–	–	–	$2.3100	$2.2975	0
Cheddar Block	$1.6325	–	–	–	–	$1.6325	$1.6380	5
Cheddar Barrel	$1.6050	–	–	–	–	$1.6050	$1.7005	1
NDM Grade A	$1.1575	–	–	–	–	$1.1575	$1.1750	3
Dry Whey	$0.4900/lb	–	–	–	–	$0.4900	$0.4980	0

The emerging block premium over barrels completely reverses the inverted spread pattern that dominated late February trading. This structural shift typically signals a strengthened retail cheese demand relative to food service and processed cheese applications – a critical indicator progressive producers must recognize immediately.

This spread reversal has significant implications for your operation’s Class III milk pricing and for how you should approach component optimization in your herd management strategy.

MAXIMIZE YOUR MARGINS: STRATEGIC POSITIONING NOW

COMPONENT OPTIMIZATION: THE HIDDEN OPPORTUNITY

Compared to significant barrel cheese declines, the stability in butter prices creates a clear advantage for operations focused on butterfat maximization. Cheese plants typically adjust manufacturing practices that directly affect your component premiums when barrels decline faster than blocks.

With March butter futures settling at $2.4158/lb (significantly above today’s cash price of $2.3100/lb), market expectations point to strengthening butter values. To capitalize on this market dynamic, leading producers are already implementing nutrition programs that enhance butterfat production.

FEED COST ADVANTAGE: LEVERAGE THIS WINDOW

Current feed futures provide a strategic planning opportunity that won’t last. March corn at $4.58/bushel and soybean meal at $302.20/ton create margin enhancement potential for operations implementing precision nutrition programs.

With each 0.1% increase in butterfat potentially worth $0.25-0.35/cwt under current market conditions, feed efficiency focused on component optimization rather than milk volume yields substantially better returns.

FUTURES INSIGHTS: WHAT THE SMART MONEY SEES

Futures Contract	Monday Settlement
Class III (MAR) $/CWT	$18.41
Class IV (MAR) $/CWT.	$18.30
Cheese (MAR) $/LB.	$1.758
Blocks (MAR) $/LB.	$1.813
Dry Whey (MAR) $/LB.	$0.485
NDM (MAR) $/LB.	$1.19
Butter (MAR) $/LB.	$2.4158
Corn (MAR) $/BU.	$4.58

The March cheese futures at $1.758/lb reflect trader expectations of block-barrel convergence above current barrel values but below current block prices. With feed inputs showing stability, progressive operations protect milk-feed margins using options strategies that provide downside protection while maintaining upside potential.

GLOBAL PERSPECTIVE: INTERNATIONAL FORCES SHAPING YOUR MILK CHECK

European dairy markets report firming butter prices against relatively stable cheese values – a pattern now emerging in U.S. markets. This global alignment suggests structural rather than transitory forces reshape dairy product relationships.

New Zealand production reports indicate a slight recovery from earlier season shortfalls but remain below previous year levels. Despite near-term market hesitancy, this constrained global milk supply creates underlying support for dairy product values.

Chinese import activity shows highly selective re-engagement, with a more substantial interest in butter and cream products than powders or cheese. This targeted import demand aligns perfectly with today’s price movements and reinforces the strategic advantage of butterfat-focused production systems.

YOUR 3-STEP ACTION PLAN: WHAT PROGRESSIVE PRODUCERS ARE DOING NOW

1. IMPLEMENT COMPONENT-FOCUSED NUTRITION IMMEDIATELY

With butter futures ($2.4158/lb) significantly above cash prices ($2.3100/lb) and the block-barrel structure normalizing, leading operations are implementing feeding strategies that optimize both butterfat and protein components. Consider strategically using rumen-protected fats and precision carbohydrate management to enhance component yields without sacrificing production efficiency.

2. EXECUTE TARGETED RISK MANAGEMENT THIS WEEK

The current future settlements create specific opportunities that won’t last. The March cheese futures at $1.758/lb suggest a potential upside from current cash values once the block-barrel relationship normalizes. With feed inputs showing stability (corn at $4.58/bu), now is the time to protect milk-feed margins using strategies that provide downside protection while maintaining upside potential.

3. MONITOR THE BLOCK-BARREL RELATIONSHIP DAILY

Today’s emerging block premium (blocks at $1.6325/lb versus barrels at $1.6050/lb) represents a critical market structure change from last week. Forward-thinking producers track this spread daily as a leading indicator of the cheese market direction and Class III value potential.

Block premiums typically signal strengthening retail demand, while inverted spreads often indicate manufacturing capacity constraints or weak retail demand – intelligence you can use to optimize your marketing strategy.

BOTTOM LINE: WHAT THIS MEANS FOR YOUR OPERATION

Today’s dairy markets show a structural realignment, with blocks establishing a premium over barrels, butter holding firms finding selective support, and NDM finding selective support. Progressive producers are capitalizing on the relative strength in butter markets by implementing component-focused nutrition programs that enhance butterfat yields.

The consistent bidding activity for blocks despite recent market weakness suggests underlying confidence in cheese demand fundamentals once the current supply-demand imbalance resolves. With futures values indicating potential strengthening in cheese ($1.758/lb) and butter ($2.4158/lb), innovative risk management strategies should focus on protecting downside risk while participating in potential market recovery.

The emerging block premium over barrels signals an improving market structure that typically precedes broader price strengthening in cheese markets. Leading producers recognize today’s market signals demand immediate action: optimize components rather than volume, implement targeted risk management, and closely monitor the evolving block-barrel relationship as an early indicator of market direction.

Learn more:

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Categories : CME Dairy Markets

Tags : block-barrel spread, butter market trends, cheddar cheese prices, dairy market analysis, milk production strategies

CME Dairy Market Analysis: Trade War Drama Sends Cheese Prices Plunging to 11-Month Lows

Friday, March 7th, 2025

Trade drama shakes dairy markets! Cheese prices hit 11-month lows, butter slides, and milk futures plummet. How can producers adapt to survive?

EXECUTIVE SUMMARY: This week’s dairy market turmoil highlights the impact of global trade tensions and overproduction. U.S. tariffs on non-USMCA-compliant imports from Canada and Mexico have raised costs, while China’s retaliatory tariffs on U.S. dairy products add further uncertainty. Cheese prices plunged to an 11-month low despite strong exports and reduced cheddar production. Butter values also fell due to a surplus of cream, while nonfat dry milk prices dropped amid weak exports to Southeast Asia. Milk futures reflect bearish sentiment, with Class III contracts falling sharply. Producers must navigate these challenges by reassessing cost structures, exploring alternative markets, and managing risk effectively.

KEY TAKEAWAYS

Trade Policy Impact: U.S. tariffs on non-USMCA-compliant imports and China’s retaliatory tariffs disrupt global dairy markets.
Cheese Market Decline: CME cheddar blocks fell 15.25¢ this week despite strong exports and reduced production.
Butter Surplus: Excess cream dragged butter prices to $2.25/lb before recovering slightly to $2.31/lb.
Powder Export Weakness: Nonfat dry milk prices hit a nine-month low as exports to Southeast Asia slowed.
Milk Futures Drop: April Class III futures fell over $1 to $17.21/cwt, reflecting bearish market sentiment.

How are your profit margins holding up amid this week’s market chaos? With cheese prices plummeting, butter values sliding, and milk futures in freefall, dairy producers face a perfect storm of challenges that demand immediate attention.

The on-again, off-again tariff drama with Canada and Mexico has created market whiplash, costing real dairy farmers real money. Like watching a teenager’s tumultuous relationship unfold, market participants have witnessed U.S. trade policy switch status to “it’s complicated” – with potentially serious consequences for your bottom line in the months ahead.

USMCA Trade Drama: What Dairy Farmers Need to Know Now

The administration’s decision to exempt USMCA-compliant goods from the newly imposed 25% tariffs offered some relief. Still, this seemingly straightforward carve-out creates far more complex market realities than many producers realize.

What’s the real impact on your operation?

First, approximately 40% of previously duty-free imports from Canada and Mexico lack proper USMCA certification and now face a substantial 25% border tax. This creates immediate cost pressures that will inevitably flow through the supply chain.

Second, contradictory messaging about whether this exemption represents permanent policy or merely a temporary pause until April 2 leaves dairy businesses unable to plan effectively even for the near term.

Canada’s supply management system starkly contrasts the U.S. market’s volatility. Under their system, certain products like dairy and poultry are subject to tariff-rate quotas, ensuring domestic production meets most of the nation’s needs. While initial tariffs are modest (milk has a 7.5% tariff with exemptions for USMCA countries), once quota limits are reached, much steeper tariffs kick in – up to 241% for milk.

Despite these constraints, U.S. dairy exports to Canada have grown significantly, reaching $1.14 billion in 2024 – nearly doubling over the past decade.

The IDFA has urged both countries to negotiate a resolution: “A prolonged tariff war with our top trading partners will continue to create uncertainty and additional costs for American dairy farmers, processors, and our rural communities.”

Inside Canada’s Milk Quota System: Stability vs. Market Access

To understand how Canada’s supply management system functions in practice, examine this actual quota trading data from British Columbia throughout 2024:

Month	Quantity (kg of butterfat/day)	Average Price ($/kg)	Total Value ($000)
January	91.00	35,500	3,230.50
February	22.37	35,500	794.14
March	79.27	35,500	2,814.09
April	100.00	35,500	3,550.00
May	180.43	35,500	6,405.27
June	64.94	35,500	2,305.37
July	147.73	35,500	5,244.42
August	70.00	35,500	2,485.00
September	145.90	35,500	5,179.45
October	88.93	35,500	3,157.02
November	70.70	35,500	2,509.85
December	56.40	35,500	2,002.20

Source: Agriculture and Agri-Food Canada, Animal Industry Division

Notice the fixed quota value at exactly $35,500 per kilogram of butterfat daily throughout the year. This demonstrates the controlled nature of the Canadian dairy market, where production rights maintain consistent value regardless of market fluctuations – a stark contrast to the price volatility experienced by U.S. producers.

China’s Strategic Dairy Tariffs: Smart Trade Policy in Action

While North American trade tensions grabbed headlines, China quietly announced its targeted approach to dairy tariffs, revealing sophisticated market awareness.

Their 10% retaliatory tariff on U.S. dairy imports specifically exempts dry whey and lactose – ingredients critical to their massive hog industry. This strategic carve-out protects their essential interests while delivering politically meaningful responses to U.S. trade actions.

The Long-Term Risk: Every trade disruption allows competitors to establish new supply relationships that may persist long after tariffs are resolved. European suppliers stand ready to fill any gaps created by unstable U.S. trade policy.

Question for Producers: How are you diversifying your market exposure to protect against trade policy volatility? Share your strategies in the comments below.

Cheese Market Collapse: When Good News Gets Ignored

This week’s cheese market performance demonstrates how market psychology can completely overwhelm positive fundamentals. CME spot Cheddar blocks plunged to an 11-month low at $1.6050 on Tuesday before recovering slightly to close at $1.6225, still down a significant 15.25¢ for the week. Barrels mirrored this weakness, falling 15¢ to $1.63.

The Disconnect Between Data and Market Reality

The market’s reaction seems utterly detached from underlying supply-demand fundamentals:

January’s cheese production showed only a modest 0.8% year-over-year increase
Cheddar output fell 1.4% to its lowest January level since 2020
Cheese exports surged 22% above January 2024 volumes

This combination of controlled production and exceptional export growth would typically support prices in a rational market – yet values plummeted anyway.

What This Means For Your Operation

This disconnect reveals how thoroughly sentiment now dominates fundamentals in the dairy markets. The market’s laser focus on upcoming cheese plant expansions, potential consumer demand weakness, and trade anxiety have created a bear market psychology that’s difficult to overcome.

For producers, traditional approaches to reading market signals may need serious recalibration. Are you adjusting your risk management strategies for this new market reality?

Butter’s Surprising Challenge: Too Much of a Good Thing

The current butterfat market offers a perfect example of how success in one area can create challenges elsewhere. Higher component levels have created a cream surplus that’s dragged multiples to their lowest points since the pandemic disruption of 2020.

This abundance forces us to confront a counterintuitive reality: sometimes, producing more high-value components reduces overall returns.

Manufacturing Response to Cream Surplus

Class II manufacturers have seized this opportunity, dramatically increasing production across multiple categories:

Hard ice cream is up 20% year-over-year
Full-fat cottage cheese up 18%
Yogurt up 5.3%
Sour cream up 4.3%

Yet even this substantial manufacturing response couldn’t absorb all available cream, allowing butter production to inch up 0.5% despite already ample supplies.

Production Trends Behind the Butterfat Surplus

To understand the current supply situation, consider these key production metrics from the most recent USDA data:

Metric	Value	Year-over-Year Change
Total Milk Production	17.875 billion lb	-1.0%
Daily Milk Production	596 million lb	-6 million lb
Number of Dairy Cows	9.365 million	+20,000 head
Milk Per Cow	1,909 lb	-23 lb

Source: USDA Milk Production report, December 19, 2024

These statistics reveal an interesting paradox: despite having more cows in the national herd, per-cow productivity and total milk production declined compared to the previous year. However, component percentages continue to rise, with milk fat tests reaching 4.15% in September 2024, up from 4.08% in the last year.

The current market dynamics forced CME spot butter to retreat to $2.25 on Tuesday, its lowest price since 2021, before recovering slightly to close at $2.31, down 3.5¢ for the week.

Strategic Question: With component values under pressure, should your breeding and feeding programs still prioritize fat production or is a rebalancing needed? What other product streams might offer better returns for your high-component milk?

Powder Markets Signal Export Warning Signs

The nonfat dry milk market continues its downward slide, with CME spot prices falling 4.5¢ to $1.155, the lowest level in nine months. This decline persists despite manufacturers making strategic production adjustments – combined NDM and SMP output totaled just 189 million pounds in January, down 3.2% year-over-year and the lowest January volume since 2016.

Geographic Shift in Export Patterns

The market is experiencing a significant redistribution of export flows:

Manufacturers strongly favoring NDM (primarily sold domestically and to Mexico) over SMP
SMP production plummeted 37.6% year-over-year
Total powder exports fell below 100 million pounds in January for the first time in over five years
Exports to Southeast Asia reached eight-year lows in December and January
Shipments to Mexico exceeded January 2024 levels

Products that previously served markets like the Philippines and Vietnam have instead moved into storage, pushing U.S. milk powder inventories to nearly 300 million pounds – the highest level since May 2023.

This inventory buildup creates a classic market dilemma: should manufacturers continue producing at current levels, hoping for eventual market improvement, or should they reduce output to avoid further inventory accumulation?

Bullvine’s analysis suggests that processors shifting between product forms will have distinct advantages in this environment. What’s your perspective on the powder market outlook?

Milk Futures Flash Warning Signs for Farm Profitability

This week, the bearish sentiment in physical product markets translated directly into substantial losses for milk futures. April Class III futures plummeted more than a dollar to settle at $17.21 per hundredweight, with most contracts suffering double-digit losses and values predominantly settling in the $17-$18 range.

Class IV futures showed similar weakness, though less pronounced, with contracts generally losing around 30¢. While most Class IV contracts maintained positions above $18, the June contract settled at $17.93, slipping below this psychological support level.

What This Means for Your Bottom Line

These deteriorating values present a challenging economic outlook for dairy producers, notably when coinciding with the spring flush. These futures prices seriously threaten dairy farm viability, especially for operations with high debt loads or significant fixed costs.

The Bullvine has consistently advocated for proactive margin management. Those who locked in protection earlier this year now see that strategy’s value. A serious evaluation of production costs and marketing strategies is essential for those exposed to these declining values.

Action Step: Take time this week to calculate your actual cost of production and compare it to current future values. What changes would be necessary if these price levels persist through summer?

Feed Markets: Rare Stability in a Volatile Week

In a week dominated by volatility, feed markets displayed remarkable stability in closing values:

May corn futures finished unchanged at $4.69 per bushel
May soybeans concluded at $10.25 per bushel, exactly where they started
Soybean meal managed modest gains, advancing $4.50 to $304.50 per ton

This price stability provides breathing room for dairy operations facing declining milk values. However, the temporary surge in soybean meal demand resulting from the brief tariff on canola imports demonstrates how quickly feed markets can respond to trade policy shifts.

Risk Management Reminder: While current feed values offer favorable opportunities to lock in forward coverage, the ongoing evolution of trade policy could rapidly alter ingredient availability and pricing. Innovative producers will secure protection for at least a portion of their feed needs while maintaining flexibility to adjust as conditions evolve.

Market Outlook: Navigating Trade Complexities in 2025

The current dairy market presents extraordinary challenges, combining abundant domestic supplies with increasingly unpredictable international market access. Rather than simply bemoaning trade barriers, forward-thinking producers are learning to navigate them strategically.

Weekly CME Dairy Price Dashboard – March 7, 2025

Product	Closing Price	Weekly Change
Cheddar Blocks	$1.6225/lb	-15.25¢
Cheddar Barrels	$1.63/lb	-15.00¢
Butter	$2.31/lb	-3.5¢
Nonfat Dry Milk	$1.155/lb	-4.5¢
Dry Whey	$0.49/lb	-2.0¢
Class III April	$17.21/cwt	-$1.00+
Class IV June	$17.93/cwt	n/a

Source: CME Group, March 7, 2025

Understanding the reality behind the headlines is crucial. While social media may circulate claims of uniformly high Canadian tariffs on all U.S. products, the fact is that most U.S.-Canada trade occurs duty-free under USMCA. For dairy precisely, the challenges lie in over-quota tariffs and how the quotas are administered.

The Bullvine’s Perspective

As we’ve consistently demonstrated through our commitment to transparency and market education, periods of market disruption often create opportunities for meaningful change in the dairy industry. The operations that approach current challenges with creativity and resilience, rather than simply maintaining past practices, will position themselves for long-term success.

Rather than hoping for market improvement, forward-thinking operations are:

Evaluating their cost structures and identifying efficiency opportunities
Exploring alternative marketing channels beyond traditional commodity sales
Considering how to differentiate their production in an increasingly competitive landscape
Building stronger relationships with processors to enhance market intelligence
Implementing genetic strategies that balance component production with overall efficiency

The question isn’t whether the market will change—it’s whether your operation is positioned to adapt when it does. Are you prepared to understand the headlines and the regulatory details that will determine which dairy businesses will thrive in this new environment?

LEARN MORE

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Categories : CME Dairy Markets

Tags : butter surplus, cheese prices drop, dairy market analysis, USMCA tariffs

CME Dairy Market Report: March 6, 2025 – Butter Prices Surge While Barrels Crash

Thursday, March 6th, 2025

Butter soars, cheese markets split: Today’s CME dairy report reveals a seismic shift. Are you ready to adapt, or will your operation be left behind?

EXECUTIVE SUMMARY: The March 6, 2025, CME dairy market report unveils a dramatic divergence in dairy product performance. Butter prices surged 1.75¢ to $2.3000/lb, driven by strong demand and limited supply. Meanwhile, the cheese market experienced a significant split, with cheddar blocks rising slightly but barrels plummeting 5.00¢, signaling potential weakness in food service demand. Global factors, including a strengthening U.S. dollar and increased New Zealand production, are adding pressure to export markets. Rising feed costs threaten producer margins, pushing the milk-feed ratio below profitability thresholds. The report emphasizes the critical need for producers to adapt quickly to these changing market dynamics, offering strategic recommendations to navigate the evolving landscape.

KEY TAKEAWAYS:

Butter outperforms cheese, suggesting a need to prioritize butterfat production
Widening block-barrel spread indicates shifting demand patterns in cheese markets
Rising feed costs and global market pressures necessitate immediate action on risk management
Producers must adapt quickly to survive, focusing on component optimization and contract renegotiation
Currency fluctuations and international production trends are significantly impacting U.S. dairy export competitiveness

CME dairy market report, butter prices, cheese market trends, dairy producer strategies, milk-feed ratio

Butter climbed 1.75¢ today as buyers scrambled to secure supply, while cheddar markets told a tale of two cities—blocks inched up 1.25¢, but barrels plummeted a shocking 5.00¢. Are you positioned to capitalize on these dramatic market shifts?

Today’s Market Movers: Follow the Money

Product	Closing Price	Change	Trades	Bids	Offers
Butter	$2.3000/lb	↑ +1.75¢	27	23	5
Cheddar Block	$1.6275/lb	↑ +1.25¢	8	3	0
Cheddar Barrel	$1.6550/lb	↓ -5.00¢	3	0	1
Nonfat Dry Milk	$1.1675/lb	↓ -1.25¢	2	3	3
Dry Whey	$0.4900/lb	↔ NC	1	1	1

Why Butter Is Outperforming Cheese

Butter’s 1.75¢ climb isn’t just a number—it’s a wake-up call for producers still fixated on cheese. With 27 trades executed (more than all other products combined!), butter shows unprecedented demand strength heading into spring. Are you still allocating components based on outdated price relationships?

Block-Barrel Spread Tightens: What It Means

Today’s pricing created a barrel-over-block inversion of 2.75¢—completely contradicting the historical block premium of 3-5¢. This isn’t just market noise; it’s a structural warning sign. Foodservice demand (primarily barrels) is weakening while retail cheese (blocks) holds steady. What does this mean for your milk marketing strategy?

Trading Activity: Reading Between the Lines

Where Smart Money Is Moving

Butter dominated with 27 trades—nearly triple the volume of any other product. Even more telling: 23 unfilled bids remained at close, signaling buyers are still hungry for more. Meanwhile, barrel cheese saw just three trades with zero bids left standing—a ghost town that speaks volumes about waning processor confidence.

Did You Know?

Every 0.1% increase in butterfat production can boost your milk check by approximately $0.44/cwt at current price levels—more than offsetting potential volume losses.

Global Trends You Can’t Ignore

International Markets Are Shifting the Game

Despite today’s domestic gains, EU butter prices hovering around $2,400/MT continue to undercut U.S. export opportunities. Meanwhile, New Zealand’s 2% year-over-year production increase is flooding global markets—pressuring NDM and whey prices.

The Dollar Problem Nobody’s Talking About

The U.S. dollar strengthened 0.8% this week alone—devastating news for export-dependent producers. With 15% of U.S. dairy production relying on foreign buyers, this currency shift could erase domestic price gains faster than a California drought. Have you hedged your currency exposure?

Future Forecast: Storm Clouds Gathering

Contract	Price	Weekly Trend
Class III (MAR)	$18.32/cwt	↑ +$0.96
Class IV (MAR)	$18.40/cwt	↓ -$0.08
Butter (MAR)	$2.4000/lb	↓ -$0.015

Feed Costs Are About to Explode

While producers celebrate butter’s climb, corn surged to $4.4925/bu (+4¢) while soybean meal rocketed to $304.80/ton. This has pushed the milk-feed ratio to a dangerous 2.15—below the 2.25 profitability threshold that separates survivors from casualties. When was the last time you locked in feed costs?

Inside the Trading Pit: What Traders Are Saying

The Whispers You Need to Hear

“We’re seeing cream shortages earlier than usual—butter at $2.30 could look cheap by April,” warned a veteran Midwest trader with 20+ years on the CME floor.

Another broker bluntly said, “Blocks are for pizza, barrels are for restaurants and processed cheese. That 5-cent barrel crash? It’s telling us exactly which sector is struggling right now.”

Three Actions Smart Producers Are Taking Today

Survival Strategy #1: Shift to Class IV

With butter outperforming and the block-barrel spread inverted, component optimization is critical. Prioritize butterfat production immediately—every 0.1% increase adds roughly $0.44/cwt to your milk check at current prices.

Survival Strategy #2: Lock Feed Costs NOW

Corn futures suggest an 8% price hike by June. Forward-thinking producers are securing 60-90 days of inventory today before costs erode already-thin margins.

Survival Strategy #3: Renegotiate Your Contracts

The 5¢ barrel crash signals food service weakness that could persist through Q2. If you’re locked into barrel-heavy contracts, now is the time to approach buyers about shifting volume toward block production.

The Bottom Line: Adapt or Perish

Today’s dairy markets reward agility and punish complacency. Butter’s rally offers a lifeline, but the barrel cheese collapse demands immediate action. The producers who survive this year won’t be the largest or most established—they’ll be the ones who adapt fastest to these shifting market dynamics.

Are you still running your dairy like it’s 2024? If so, you’re already behind.

LEARN MORE

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Categories : CME Dairy Markets

Tags : butter prices, cheese market trends, CME Dairy Market Report, dairy producer strategies, milk-feed ratio

CME Dairy Report March 5, 2025: Butter Surges, Cheese Markets in Turmoil

Wednesday, March 5th, 2025

Butter soars, cheese plummets: CME dairy markets in turmoil. Discover how savvy producers are turning market chaos into a strategic opportunity.

EXECUTIVE SUMMARY: The March 5, 2025 CME dairy report reveals a market in flux, with butter prices surging while cheese markets face a dramatic downturn. The unprecedented 9-cent premium of barrels over blocks signals a fundamental shift in cheese demand patterns, challenging traditional production strategies. Class III milk futures plummeted to .36/cwt, squeezing producer margins as feed costs continue to rise. Global factors, including increased New Zealand production and competitive EU butter prices, add further complexity to the U.S. dairy landscape. This market volatility demands immediate action from producers, with opportunities emerging for those willing to adapt their component strategies and explore Class IV markets.

KEY TAKEAWAYS:

Butter prices climbed 3.25¢ to $2.2825/lb, defying overall market weakness
Cheddar blocks fell 11.23% week-over-week, reflecting significant inventory pressures
The block-barrel price inversion (-9¢) signals a shift towards processed cheese demand
Class III milk futures dropped sharply to $17.36/cwt, while Class IV held relatively steady at $18.48/cwt
Rising feed costs (corn +4¢, soybean meal +$6) further challenge producer margins, necessitating proactive risk management strategies

CME dairy prices, cheese market volatility, butter price surge, Class III milk futures, dairy producer strategies

Today’s CME dairy markets delivered mixed signals, with butter prices climbing sharply while cheese markets continued their downward spiral. The block-barrel price inversion deepened, signaling a fundamental shift in cheese demand dynamics. Meanwhile, Class III milk futures plummeted to multi-month lows, and rising feed costs are squeezing margins. Dairy producers must adapt quickly to navigate these challenging conditions.

Key Price Changes and Market Trends

Product	Closing Price ($/lb.)	Change (¢/lb.)	Trades	Bids	Offers
Butter	2.2825	+3.25	1	7	2
Cheddar Blocks	1.6150	+1.00	5	4	1
Cheddar Barrels	1.7050	-2.50	2	1	1
NDM Grade A	1.1800	NC	0	1	1
Dry Whey	0.4900	-2.00	5	1	3

Commentary:

Butter prices surged by 3.25¢ to $2.2825/lb on strong buyer interest and limited offers, reflecting tight supply dynamics.
Cheddar blocks rebounded slightly (+1¢) after Tuesday’s sharp decline but remain under significant pressure due to weak demand.
Cheddar barrels fell another 2.50¢ to $1.7050/lb, deepening the unusual block-barrel price inversion.
Dry whey dropped by 2¢ to $0.4900/lb, continuing its downward trend and further pressuring Class III milk values.

Weekly Price Comparison

Product	Current Week Avg. ($/lb.)	Prior Week Avg. ($/lb.)	Change (%)	Weekly Volume
Butter	2.2925	2.3480	-2.36%	9
Cheddar Blocks	1.6467	1.8550	-11.23%	26
Cheddar Barrels	1.7392	1.7945	-3.08%	7
NDM Grade A	1.1842	1.2065	-1.85%	6
Dry Whey	0.5033	0.5280	-4.68%	5

Why This Matters:

Cheddar blocks have seen a staggering weekly decline of over 11%, reflecting broader market weakness and growing inventory pressures across the cheese complex.

The Block-Barrel Inversion Explained

The current block-barrel spread is an unusual -9¢, with barrels trading at a premium over blocks—an anomaly that has occurred less than 5% of the time in the past decade.

Metric	Current Value (¢/lb.)	Historical Avg (2016–2021) (¢/lb.)	Deviation (¢/lb.)
Block-Barrel Spread	-9	+12	-21

What This Means for Producers:

This inversion signals a fundamental shift in cheese demand patterns. There is a stronger demand for barrel-intensive processed cheese than natural block cheddar varieties.

Futures Settlement Prices

Product	Wednesday ($)	Tuesday ($)	Change ($)
Class III Milk	17.36/cwt	18.15/cwt	-0.79
Class IV Milk	18.48/cwt	18.64/cwt	-0.16
Cheese	1.7700/lb	1.7550/lb	+0.015
Butter	2.4150/lb	2.3800/lb	+0.035
Dry Whey	0.4900/lb	0.4975/lb	-0.0075

Implications:

Class III milk futures dropped sharply to .36/cwt, reflecting ongoing cheese market weakness and declining dry whey prices. Class IV milk held relatively steady due to more pungent butter and powder markets.

Global Context

International factors are adding pressure to U.S dairy markets:

New Zealand’s milk production increased by over 2% year-over-year in February, boosting global supply and putting downward pressure on export prices.
European Union butter prices remain competitive at $2,200/metric ton, limiting U.S. export opportunities despite domestic butter strength.

Strategic Recommendations for Producers

Rethink Component Strategies

Producers should consider adjusting their component profiles to align with this shift with processed cheese demand outpacing natural cheddar.

Explore Class IV Opportunities

The unusual premium of Class IV over Class III creates opportunities for producers with flexibility in milk marketing or component advantages aligned with butterfat production.

Plan for Rising Feed Costs

Corn futures rose to $4.4125/bu today (+4¢), while soybean meal surged to $300/ton (+$6). Locking in feed costs now could protect margins as input prices climb further.

The Bottom Line

Today’s dairy markets are anything but business as usual:

Butter prices surged on tight supplies while cheese markets continued their collapse.
The block-barrel inversion highlights shifting demand dynamics that could reshape producer strategies.
Falling Class III prices and rising feed costs are squeezing margins, demanding proactive risk management.

Producers who adapt quickly—aligning components with market needs and securing feed costs—will be best positioned to weather this storm and emerge stronger.

Stay ahead of the curve with daily insights from The Bullvine.

LEARN MORE:

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Categories : CME Dairy Markets

Tags : butter price surge, cheese market volatility, Class III milk futures, CME dairy prices, dairy producer strategies

CME Daily Dairy Report: Cheese Blocks Plunge 9.50¢ As Markets Face Pressure | March 4, 2025

Tuesday, March 4th, 2025

Cheese blocks plummet 9.50¢ as dairy markets face pressure. What’s driving the decline, and how will it impact producers? Get the full analysis here.

EXECUTIVE SUMMARY: The CME dairy markets experienced significant pressure on March 4, 2025, with cheese blocks leading the decline, falling 9.50 cents to $1.7750/lb. This sharp drop occurred despite stable inventories, suggesting potential shifts in demand or increased selling pressure. While cheese markets weakened, butter held steady at $2.3450/lb, and nonfat dry milk remained unchanged. The weekly averages show a downward trend across all commodities, with butter declining 3.1% from the previous week. Despite spot market weakness, futures markets signal optimism for near-term milk values. However, the current milk-feed ratio of 2.18 remains below the profitability threshold of 2.25, indicating ongoing challenges for producers. Global market conditions, including increased European milk production and premium Oceania butter prices, continue to influence U.S. export competitiveness.

KEY TAKEAWAYS:

Cheese blocks plunged 9.50 cents to $1.7750/lb, narrowing the block-barrel spread to just 0.50 cents.
Weekly averages show a downward trend across all dairy commodities, with butter declining 3.1% from the previous week.
Despite spot market weakness, futures markets remain optimistic about near-term milk values.
The milk-feed ratio of 2.18 is below the 2.25 profitability threshold, signaling ongoing margin pressure for producers.
Global market conditions, including European production increases and Oceania butter premiums, continue to impact U.S. export competitiveness.

CME dairy prices, cheese market analysis, block-barrel spread, dairy futures, milk-feed ratio

Today’s dairy markets registered significant downward pressure, with cheddar blocks leading the decline with a substantial 9.50 cent drop, while barrels fell 2.50 cents. This market weakness comes amid challenging global trade conditions and evolving domestic supply dynamics affecting multiple dairy commodities.

The cheddar block market fell sharply to $1.7750/lb, representing a significant 9.50 cent decline amid moderate trading activity. Despite relatively stable cheese inventories in the latest Cold Storage report, this dramatic movement comes. Cheddar barrels also weakened, though less dramatically, by falling 2.50 cents to $1.7800/lb, narrowing the block-barrel spread to just 0.50 cents, representing an unusually tight price relationship between these two cheese varieties.

Daily Price Summary: Mixed Performance Across Dairy Product Categories

Product	Closing Price	Change from Yesterday
Cheese (Blocks)	$1.7750/lb	-9.50¢
Cheese (Barrels)	$1.7800/lb	-2.50¢
Butter	$2.3450/lb	Unchanged
Nonfat Dry Milk	$1.2000/lb	Unchanged
Dry Whey	$0.5100/lb	-1.50¢

Butter markets held steady at $2.3450/lb with minimal trading activity but continued offering interest, suggesting potential for downward price pressure in coming sessions. NDM remained unchanged at $1.2000/lb while dry whey decreased 1.50 cents to $0.5100/lb amid substantial offering pressure with four uncovered offers versus just one bid.

Weekly Trend Analysis Shows Continued Market Softness

Product	Mon	Tue	Wed	Thur	Fri	Current Avg.	Prior Week Avg.	Weekly Change
Butter	$2.3700	$2.3450	$2.3350	$2.3450	$2.3450	$2.3480	$2.4219	-$0.0739
Cheddar Block	$1.8800	$1.8800	$1.8700	$1.8700	$1.7750	$1.8550	$1.9044	-$0.0494
Cheddar Barrel	$1.8000	$1.7925	$1.7950	$1.8050	$1.7800	$1.7945	$1.8019	-$0.0074
NDM Grade A	$1.2250	$1.2000	$1.2075	$1.2000	$1.2000	$1.2065	$1.2600	-$0.0535
Dry Whey	$0.5350	$0.5350	$0.5350	$0.5250	$0.5100	$0.5280	$0.5475	-$0.0195

The weekly averages show a general downward trend across all commodities compared to the previous week, with butter showing the most significant percentage decline at nearly 3.1% lower than the prior week’s average.

Trading Activity Reveals Continued Selling Pressure

Today’s trading session featured moderate activity for cheddar blocks. Four trades were executed alongside offering interest (0 bids versus three offers), indicating continued selling pressure at current price levels. This trading pattern suggests the potential for further price adjustments in coming sessions unless fresh buying interest emerges.

Cheddar barrels recorded modest activity with two trades and limited interest on either side of the market (0 bids, one offer). Butter saw no trades executed despite both bids (1) and offers (2), indicating a relatively balanced but inactive market. Similarly, NDM recorded no trades but showed equal bidding and offering interest (2 bids, two offers). At the same time, dry whey saw substantial selling pressure with four uncovered offers compared to just one bid.

Global Market Conditions Create Mixed Outlook for U.S. Exports

The U.S. dairy export environment continues to evolve amid changing global supply and demand dynamics. International dairy product prices have shown varied performance, with Global Dairy Trade auctions indicating some strength in whole milk powder but continued pressure on skim milk powder markets.

European milk production continues to increase seasonally, while New Zealand production remains slightly below historical norms. According to recent Bullvine reporting, the European Union faces projected milk production declines of 0.2% in 2025, creating potential opportunities for U.S. producers to capture market share in key export destinations.

The international competitive landscape is particularly evident in the forward price projections for key dairy commodities. In Oceania markets, butter is trading at a significant premium to U.S. values, with March 2025 prices at $7,370/metric ton compared to U.S. equivalent values of approximately $5,170/metric ton.

Futures Markets Signal Optimism Despite Today’s Spot Market Weakness

Despite today’s market pressure, particularly in the cheese sector, futures markets remain relatively optimistic about milk values for the near term. The Class III milk futures for coming months show a gradual strengthening pattern that suggests market participants anticipate improved demand or tightening milk supplies as we move through the spring flush period.

Class	March	April	May	June	July	August
Class III ($/cwt)	$18.71	$18.86	$19.03	$19.15	$19.20	$19.25
Class IV ($/cwt)	$18.64	$18.71	$18.79	$18.89	$18.99	$19.10
Change from Yesterday (Class III)	-$0.23	-$0.18	-$0.14	-$0.10	-$0.08	-$0.05
Change from Yesterday (Class IV)	$0.00	-$0.07	-$0.09	-$0.08	-$0.06	-$0.05

Current future values reflect growing concern about milk prices in the immediate term but suggest relatively favorable conditions. Feed markets continue to provide some relief for producers, though corn futures remained relatively strong at $4.53/bushel for March delivery on Friday.

Producer Profitability Analysis: Margins Below Threshold Despite Recent Improvements

Component	Current Price	Last Month	Year Ago
All-Milk Price ($/cwt)	$18.75	$19.10	$18.25
Corn Price ($/bushel)	$4.53	$4.70	$5.15
Soybean Meal ($/ton)	$300.20	$310.50	$355.60
Alfalfa Hay ($/ton)	$195.00	$198.00	$210.00
Calculated Milk-Feed Ratio	2.18	2.15	1.89
Profitability Threshold	2.25	2.25	2.25

The milk-feed ratio is calculated using the formula: (All-milk price per cwt) ÷ (16% of corn price + 8% of soybean meal price + 26% of alfalfa hay price)

While today’s calculated ratio of 2.18 shows improvement from last month’s and year-ago levels, it remains below the 2.25 threshold typically associated with sustainable profitability for most dairy operations. This metric helps explain why expansion remains limited despite generally favorable milk prices.

Market Sentiment: Analysts Divided on Future Direction

Market sentiment has shifted somewhat with today’s significant decline in cheese prices, particularly for blocks. Market participants note that the substantial 9.50 cent decline in blocks suggests selling pressure from inventory holders or reduced buying interest from major commercial users. The fact that the butter market held unchanged despite recent weakness indicates a potential stabilization point for that commodity.

The International Dairy Foods Association’s most recent weekly market commentary noted: “While the first quarter has shown surprising price resilience given inventory levels, today’s block cheese weakness suggests we may be entering a more challenging phase for dairy commodity markets, particularly if spring flush production significantly exceeds current projections.”

Strategic Recommendations for Dairy Stakeholders

Today’s dairy markets registered significant price declines for cheese, with blocks falling 9.50 cents to $1.7750/lb and barrels declining 2.50 cents to $1.7800/lb. Butter held steady at $2.3450/lb, while NDM remained unchanged at $1.2000/lb. Dry whey decreased 1.50 cents to $0.5100/lb amid substantial offering pressure.

Producers should closely monitor cheese markets for stabilization following today’s substantial block price decline. The narrowed block-barrel spread bears watching as it often signals changing market dynamics that can affect Class III milk values. Feed markets continue to provide some margin opportunity, with corn and soybean meal values moderating slightly, though the calculated milk-feed ratio remains below the traditional profitability threshold of 2.25.

In coming reports, market participants should pay particular attention to weekly cold storage movements and milk production data, as these will provide important context for whether today’s price declines represent a temporary adjustment or the beginning of a more sustained price correction. Additionally, watching daily trading volumes and bid/ask spreads will provide early indications of changing market sentiment, particularly for cheese markets, which experienced the most significant movement today.

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Categories : CME Dairy Markets

Tags : block-barrel spread, cheese market analysis, CME dairy prices, dairy futures, milk-feed ratio

CME Dairy Market Report: February 27, 2025 – Mixed Signals as Cheese Climbs While Export Challenges Persist

Thursday, February 27th, 2025

Class III milk futures rebounded midweek, closing at $18.94/cwt on Thursday after dipping to $18.73/cwt on Tuesday. USDA’s Q2 projection of $18.50/cwt suggests potential downside risks as global supply pressures persist. Butter gained 1¢, while NDM and whey-faced export-driven declined.

Summary

Class III milk futures showed a midweek recovery, closing at .94/cwt on Thursday after bottoming at .73/cwt on Tuesday, as illustrated in the chart. This rebound reflects cautious optimism in the market, though USDA’s Q2 projection of $18.50/cwt underscores potential downside risks amid global supply pressures.

Key Takeaways

Class III Milk Futures Recovery: Prices rebounded from $18.73/cwt on Tuesday to $18.94/cwt on Thursday, showing a midweek recovery after a sharp decline from Monday’s $19.02/cwt.
USDA Q2 Projection: The USDA projects Class III milk prices to average $18.50/cwt in Q2 2025, which remains below current futures levels, signaling potential downside risk.
Market Sentiment: The recovery in futures prices suggests cautious optimism, but global supply pressures and export challenges may weigh on future performance.
Price Volatility: The sharp drop early in the week, followed by a steady climb, highlights ongoing price volatility in the dairy market.

Today’s CME dairy markets closed with mixed results. Cheddar barrels gained a cent, supported by tight spot availability, while butter prices rose slightly on steady retail demand. However, nonfat dry milk (NDM) and dry whey faced downward pressure due to weak export demand and global oversupply. Feed costs remain a critical concern for producers as corn and soybean meal prices continue to trend lower.

Key Price Changes & Market Trends

The following table summarizes the closing prices and price changes for key dairy products traded on the CME today:

Product	Closing Price ($/lb)	Change from Yesterday (¢)
Butter	2.3450	+1.00
Cheddar Block	1.8700	NC
Cheddar Barrel	1.8050	+1.00
Nonfat Dry Milk	1.2000	-0.75
Dry Whey	0.5250	-1.00

Commentary:
Butter prices rose by a cent today, reflecting sustained retail demand despite ample inventories. Cheddar barrels also gained a cent amid limited trades and strong bidding interest, while cheddar blocks remained unchanged due to balanced supply and demand dynamics. On the downside, NDM fell by 0.75 cents as U.S. exporters faced increased competition from Oceania’s growing supply. Dry whey declined by a cent, pressured by weak Chinese feed demand.

Volume and Trading Activity

Trading activity across CME dairy products was moderate today:

Butter: Five trades were executed at $2.3450/lb, with one bid and three offers slightly above this level.
Cheddar Blocks: Five trades occurred at $1.8700/lb, with no bids but one offer indicating minimal upward movement.
Cheddar Barrels: One trade was completed at $1.8050/lb, supported by two bids and three offers.
Nonfat Dry Milk: One trade was recorded at $1.2000/lb, with six bids signaling some buyer interest but insufficient to prevent a price decline.
Dry Whey: Two trades were executed at $0.5250/lb amid six offers that weighed on prices.

Notable Patterns:
The butter market is resilient despite bearish global sentiment, supported by steady domestic demand. Cheddar barrels experienced strong bidding interest but limited trading activity overall. Meanwhile, NDM and dry whey markets remain under pressure due to weak international demand and oversupply concerns.

Global Context

International factors continue to shape U.S. dairy markets significantly:

Export Demand

China’s reduced imports of whey-based feed products have negatively impacted U.S. dry whey prices, contributing to today’s decline. This trend reflects broader economic challenges in China, including slower growth and reduced consumer spending.

Global Supply Trends

New Zealand’s milk production increased by 2.6% year-over-year in January, with milk solids up by 5%. This growth has bolstered global supply, intensifying competition for U.S. exporters in key markets like Southeast Asia. Similarly, EU27+UK milk equivalent exports rose by 1% in December, driven by strong demand for cheese and butter from China.

Feed Costs

Corn and soybean meal prices have continued their downward trend this week:

Corn futures (March) settled at $4.725/bushel today, down from $4.8275 on Monday.
Soybean meal futures (May) closed at $300.20/ton, down from $302 earlier this week.

These declining feed costs could provide some relief for producers managing input expenses.

Forecasts and Analysis

Class III Milk Futures vs USDA Projections

The USDA projects Class III milk prices to average $18.50/cwt in Q2 2025, reflecting steady cheese demand tempered by higher milk production and global competition.

The following graph compares Class III milk futures settlement prices for February 2025 with the USDA’s Q2 projection:

Class III Milk Futures vs USDA Projections

Analysis:
Class III milk futures settled at .94/cwt today after rebounding from Tuesday’s .73/cwt low. The USDA’s Q2 projection of $18.50/cwt suggests potential downside risk for futures if global supply growth continues to outpace demand.

Implications for Stakeholders

Producers should remain cautious about potential price volatility in the coming months as global supply pressures persist. Exporters may need to focus on diversifying their markets beyond China to mitigate risks associated with its uncertain economic outlook.

Weekly Averages & Trends

The table below highlights weekly averages compared to the prior week:

Product	Current Weekly Avg ($/lb)	Prior Week Avg ($/lb)	Weekly Volume
Butter	2.3488	2.4219	33
Cheddar Block	1.8750	1.9044	9
Cheddar Barrel	1.7981	1.8019	6
Nonfat Dry Milk	1.2081	1.2600	19
Dry Whey	0.5325	0.5475	4

Analysis:
Butter’s weekly average price declined compared to last week despite today’s gain, signaling potential weakening momentum heading into March. Similarly, cheddar blocks and barrels saw slight declines in their weekly averages, reflecting balanced market conditions overall.

Market Sentiment

Market participants expressed mixed sentiments about current conditions:

A cheese trader observed: “Barrels are tight right now due to limited spot availability, but blocks seem stable heading into March.”
A butter analyst commented: “Retail demand is keeping butter well-supported domestically despite bearish global trends.”

Overall sentiment remains cautiously optimistic for cheese markets but bearish for NDM and whey due to ongoing export challenges.

Closing Summary & Recommendations

In summary:

Cheese markets showed resilience today, with barrels gaining a cent amid limited trades.
Butter prices edged higher on steady domestic demand but face headwinds globally.
NDM and dry whey declined due to weak export demand and oversupply concerns.
Declining feed costs provide some relief for producers managing input expenses.

Recommendations:
Producers should monitor global supply trends closely—mainly New Zealand’s production growth—as it could further pressure U.S. exports in the coming months. Hedging strategies may be prudent for those exposed to price volatility in NDM or whey markets while taking advantage of declining feed costs to improve margins where possible.

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Categories : CME Dairy Markets

Tags : cheese market trends, Class III milk futures, CME Dairy Market Report, export challenges

CME Dairy Market Report, February 26, 2025: Cheese Barrels Buck the Trend in Volatile Trading

Wednesday, February 26th, 2025

Dairy markets on edge as tariffs loom! Butter slides 1¢ on Canadian retaliation fears, while cheese barrels inch up 0.25¢. Class III futures stabilize at $18.91/cwt, but USDA cuts 2025 milk price forecast. Get the scoop on global impacts, feed costs, and actionable strategies for farmers in today’s CME report.

Summary

In today’s CME dairy market report, butter prices dipped 1.00¢ to $2.3350/lb as Canada’s impending 25% retaliatory tariff sparked preemptive selling, particularly impacting Midwest processors. Cheese markets showed mixed results, with blocks falling 1.00¢ to $1.8700/lb on thin trading, while barrels edged up 0.25¢ to $1.7950/lb, supported by steady foodservice demand. Class III futures stabilized at $18.91/cwt, up 0.18¢, despite ongoing trade policy uncertainties. The USDA revised its 2025 all-milk price forecast down to $22.60/cwt, reflecting tighter margins due to persistent feed cost pressures and export challenges. Global factors, including New Zealand’s 3.1% seasonal milk output growth and the EU’s push for sustainable dairy practices, continue to shape market dynamics. Farmers are advised to consider hedging feed costs, plan for potential tariff impacts, and explore niche markets like direct-to-consumer sales to navigate the evolving landscape.

Key Takeaways

Butter prices fell 1.00¢ to $2.3350/lb due to Canada’s upcoming 25% tariff.
Cheese blocks dropped 1.00¢ to $1.8700/lb, while barrels rose 0.25¢ to $1.7950/lb.
Class III futures stabilized at $18.91/cwt (+0.18¢).
USDA lowered 2025 all-milk price forecast to $22.60/cwt.
New Zealand’s milk production up 3.1%, increasing global competition.
Feed costs remain high, pressuring the milk-feed ratio (2.10 vs. breakeven 2.25).
EU sustainability trends are influencing U.S. export competitiveness.
Farmers advised to hedge feed costs and consider diversifying into niche markets.
Mexico’s pending tariff decision (due March 5) could significantly impact cheese prices.
Direct-to-consumer raw milk sales offering premiums of +$4.50/cwt in the Midwest.

Butter prices fell 1.00¢/lb as Canada’s retaliatory tariffs loom, while cheese barrels gained 0.25¢ on limited bids. Class III futures stabilized at $18.91/cwt despite heightened trade policy risks. USDA revised its 2025 all-milk price forecast down to $22.60/cwt, reflecting tighter margins.

Key Price Changes & Market Trends

Product	Closing Price	Change from Yesterday
Cheese (Blocks)	$1.8700/lb	-1.00¢
Cheese (Barrels)	$1.7950/lb	+0.25¢
Butter	$2.3350/lb	-1.00¢
Nonfat Dry Milk	$1.2075/lb	+0.75¢
Dry Whey	$0.5350/lb	Unchanged

Commentary:

Butter slid 1.00¢ as Canada’s 25% tariff announcement (effective March 1) triggered preemptive inventory liquidation, particularly impacting Midwest processors.
Cheese blocks saw minimal trading (1 sale) amid uncertainty over Mexico’s tariff review, while barrels edged up 0.25¢ on steady foodservice demand.
NDM rose 0.75¢ on renewed Southeast Asian buying interest, though USDA’s 2025 skim-solids export forecast remains cautious (-3% YOY).

Volume and Trading Activity

Butter: 26 trades executed (range: $2.3275–$2.34/lb), dominated by pre-tariff sell orders.
Cheese: Blocks saw 1 trade, while barrels attracted 2 bids at $1.7950/lb amid thin liquidity.
NDM: 6 trades ($1.1975–$1.2075/lb) with aggressive bidding (22 bids vs. 2 offers).
Dry Whey: No trades, with 4 offers lingering at $0.5350/lb.

Global Context

Canada’s Tariffs: 25% duty threatens $450M in annual Wisconsin butter exports, forcing processors to redirect supplies domestically.
New Zealand Production: RaboResearch reports 3.1% seasonal milk output growth, increasing competition in Asian markets and pressuring U.S. butter prices.
EU Sustainability Push: Rising consumer demand for carbon-neutral dairy is pressuring U.S. exporters to adopt greener practices or risk losing EU market share.

Forecasts and Analysis

USDA 2025 Milk Price: Revised to $22.60/cwt (-0.45¢ from January), reflecting tighter margins from feed costs and export headwinds.
Feed Costs: Corn settled at $4.7900/bu (-0.3% weekly), while soybean meal dipped to $302.00/ton (-0.3%), maintaining pressure on the milk-feed ratio (2.10 vs. breakeven 2.25).
Class III Futures: March contract edged up to $18.91/cwt (+0.18¢), aligning with USDA’s Q2 projection of $18.50/cwt.

Visual Trend:
Class III milk futures remain 3.6% below February’s peak of $19.50/cwt, with USDA forecasting sideways movement through Q2 amid tariff uncertainty.

Market Sentiment

Trader Quote: “Butter’s tariff-driven drop overshadows cheese’s resilience – the real test comes when Mexico’s tariff decision drops March 5.” – CME Floor Trader.
General Outlook: 62% of traders remain bearish on near-term butter markets, while cautiously optimistic about NDM export demand recovering in Q2.

Closing Summary & Recommendations

Today’s market highlighted tariff-driven volatility (butter) versus cautious stability (cheese, NDM). Feed costs and trade policies now outweigh production trends as margin drivers.

Actionable Steps:

Hedge Feed: Lock in 50% of Q2 corn needs at $4.70/bu (December futures) to offset soybean meal’s 8% YoY surge.
Tariff Contingency Planning: Diversify 15-20% of milk to NDM production if Mexico imposes cheese tariffs.
Explore Niche Markets: Direct-to-consumer raw milk sales now offer premiums of +$4.50/cwt in Midwest markets.

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Categories : CME Dairy Markets

Tags : butter prices, cheese prices, dairy market report, trade tariffs, USDA milk forecast

Daily Dairy Market Report – February 25, 2025: Class III Futures Align with USDA Forecast Amid Global Pressures

Tuesday, February 25th, 2025

Class III milk futures are sliding, aligning with USDA’s Q2 forecast of $18.50/cwt. A stronger U.S. dollar and rising feed costs are squeezing margins, while global competition adds pressure. Check out the latest trends, analysis, and actionable insights to stay ahead in today’s dairy market!

Summary

Dairy markets on February 25, 2025, reflected mixed trends, with butter and nonfat dry milk (NDM) prices falling sharply due to ample inventories and weaker export demand, while cheese prices remained steady. Class III milk futures continued their decline, closing at $18.73/cwt, aligning with the USDA’s Q2 forecast of $18.50/cwt. The attached chart highlights the steady downward trend in Class III futures throughout February, driven by elevated feed costs and global competition. A stronger U.S. dollar further pressured U.S. exports, particularly in key markets like Southeast Asia. Producers are advised to monitor feed costs closely and consider hedging strategies as market conditions evolve heading into spring.

Key Takeaways

Steady Decline in Historical Prices: Class III milk futures have shown a consistent downward trend throughout February 2025, dropping from approximately $19.45/cwt at the start of the month to $18.73/cwt by February 25.
Alignment with USDA Forecast: The USDA’s Q2 2025 forecast of $18.50/cwt (represented by the red dashed line) is closely aligned with the current trajectory of Class III milk futures, suggesting market participants are pricing in expected softness.
Market Sentiment Reflects Pressure: The decline in futures prices indicates bearish sentiment, likely driven by elevated feed costs, weaker export demand, and increased global competition.
Price Stabilization Expected: The flat red line for the USDA forecast suggests that prices may stabilize near $18.50/cwt in Q2 unless unexpected market disruptions occur.
Actionable Insight for Farmers: Producers should prepare for tighter margins in the coming months and consider hedging strategies to mitigate risks associated with lower milk prices.

Class III milk futures, dairy market trends, USDA forecast, feed costs, global competition

Dairy markets experienced mixed movements today. Butter and nonfat dry milk (NDM) prices declined sharply, while cheese prices remained relatively stable. Class III milk futures continued their downward trend, aligning with the USDA’s Q2 forecast of $18.50/cwt. Feed costs and global production trends are emerging as critical factors influencing market dynamics.

Key Price Changes & Market Trends

The following table summarizes the closing prices and changes from yesterday for key dairy products traded on the Chicago Mercantile Exchange (CME):

Product	Closing Price ($/lb)	Change from Yesterday (¢/lb)
Cheese (Blocks)	1.8800	NC
Cheese (Barrels)	1.7925	-0.75
Butter	2.3450	-2.50
Nonfat Dry Milk	1.2000	-2.50
Dry Whey	0.5350	NC

Commentary:

Cheddar blocks held steady at $1.8800/lb, reflecting balanced supply and demand in the Midwest region. Barrels saw a slight decline of 0.75¢ to close at $1.7925/lb, likely due to weaker spot market interest. Butter prices dropped significantly by 2.50¢ to $2.3450/lb as ample inventories weighed on the market despite stable retail demand. Nonfat dry milk (NDM) also fell by 2.50¢ to $1.2000/lb, driven by reduced export interest from Southeast Asia amid competitive global supplies. Dry whey remained unchanged at $0.5350/lb, supported by steady domestic demand.

Volume and Trading Activity

Today’s trading activity across key dairy products was as follows:

Product	Trades Executed	Bids	Offers
Butter	0	1	6
Cheddar Block	0	0	1
Cheddar Barrel	0	0	2
Nonfat Dry Milk	10	9	6
Dry Whey	0	0	1

Commentary:

Butter saw no trades today but maintained a wide bid/ask spread with six offers at higher price levels, indicating potential resistance to further declines in the near term. Cheddar blocks and barrels also witnessed limited trading activity, with only minimal offers in the market, signaling cautious sentiment among traders. Nonfat dry milk stood out with ten trades executed and nine active bids, though prices still fell due to weaker export demand.

Global Context

International factors continued to shape U.S. dairy markets today:

Export Demand: U.S. dairy exports faced headwinds as Southeast Asian buyers turned to lower-priced supplies from New Zealand and the European Union (EU). This trend contributed to the decline in NDM prices.
Global Production Trends: New Zealand reported a year-over-year increase of approximately 2% in milk production in January, which added pressure on global butter and powder markets.
Currency Influence: A stronger U.S. dollar further dampened export competitiveness for American dairy products, particularly in key markets like China and Mexico.

Comparatively, European butter prices remained slightly lower than U.S. levels, encouraging importers to source from EU suppliers rather than U.S.-based producers.

Feed Costs Analysis

Feed costs remain a significant concern for dairy farmers as they directly impact production margins:

Corn futures for March settled at $4.805/bushel today, reflecting a slight decrease from earlier this month.
Soybean meal futures for May closed at $302.90/ton, maintaining elevated levels that continue to pressure feed budgets.

Higher feed costs are expected to weigh on profitability unless milk prices recover or input costs ease in the coming months.

Forecasts and Analysis

The USDA projects Class III milk prices to average $18.50/cwt in Q2 2025, reflecting a continued softening trend due to higher feed costs and global competition in dairy exports.

The following chart illustrates historical Class III milk futures over the past month alongside USDA’s Q2 forecast:

Class III Milk Futures: Historical Prices vs USDA Forecast Q2 2025

Analysis:

Class III milk futures have declined steadily over the past month, dropping from $19.50/cwt in late January to $18.73/cwt today (February 25). This downward trajectory aligns closely with USDA’s forecast of $18.50/cwt for Q2, suggesting that market participants are pricing in expectations of continued pressure on milk prices due to elevated feed costs and subdued international demand.

Market Sentiment

Market participants expressed mixed sentiment today:

A Midwest-based trader commented: “The cheese market feels well-balanced right now, but we’re keeping an eye on spring milk production trends that could tip the scales.”
Another analyst noted, “Butter inventories are weighing heavily on prices despite decent retail movement. Export demand will be key moving forward.”

Overall, sentiment remains cautiously optimistic for cheese markets but bearish for butter and NDM due to inventory pressures and weak exports.

Regional Insights

Regional weather conditions are expected to play a critical role in shaping milk production trends this spring:

The Midwest has experienced colder-than-average temperatures this month, which could delay early-season pasture growth.
California’s ongoing drought continues to challenge water availability for feed crops, potentially limiting milk output in the nation’s largest dairy-producing state.

Farmers in these regions should monitor weather forecasts closely as they plan for spring production cycles.

Closing Summary & Recommendations

In summary, today’s dairy markets reflected a mix of stability and weakness across key products:

Cheese prices held relatively firm despite limited trading activity.
Butter and NDM faced downward pressure due to ample supplies and weaker export demand.
Feed costs remain elevated, adding pressure on margins for producers.

Recommendations:

Producers should consider hedging strategies for Class III milk futures as prices approach USDA’s Q2 forecast of $18.50/cwt.
Exporters may need to explore alternative markets or pricing adjustments to remain competitive amid strong global production.
Farmers should monitor feed costs closely and explore cost-saving measures where possible.
Regional producers should prepare for potential weather-related disruptions affecting spring forage availability.

This concludes today’s CME Dairy Market Report for February 25, 2025—stay tuned for further updates as we track evolving market conditions!

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Categories : CME Dairy Markets

Tags : Class III milk futures, dairy market trends, Feed Costs, USDA forecast

CME Dairy Market Report 02/24/2025: Butter Prices Plunge Amid Tariff Turmoil

Monday, February 24th, 2025

Dairy markets reel as Canada’s impending retaliatory tariffs send butter prices plummeting 4.50¢. Wisconsin farmers face a double threat with Mexico’s proposed cheese duties looming. Meanwhile, feed costs surge, squeezing margins to crisis levels. Get the full scoop on today’s market moves and actionable strategies for your farm.

Summary

In today’s volatile dairy market, butter prices plunged 4.50¢ to $2.3700/lb, driven by Canada’s impending retaliatory 25% tariff on U.S. exports. This sharp decline translates to a $0.48/cwt loss in butterfat payouts for farmers. Cheese markets showed mixed results, with blocks dipping 2.00¢ to $1.8800/lb while barrels held steady at $1.8000/lb as the industry braces for potential Mexican tariffs. Feed costs continue to pressure margins, with corn up 3% and soybean meal surging 8% year-over-year. The milk-feed ratio sits at a concerning 2.10, well below the five-year average of 2.45 and the 2.25 needed for a 5% profit margin. Experts recommend locking in 50% of Q2 corn needs at $4.70/bu and considering a shift to niche markets like direct-to-consumer raw milk sales, which offer premiums of up to $4.50/cwt. With 62% of traders bearish, farmers are urged to closely monitor USDA’s upcoming export report and the potential ratification of Mexican tariffs.

Key Takeaways

Butter prices crashed 4.50¢ to $2.3700/lb due to Canada’s impending 25% retaliatory tariff on U.S. dairy exports.
Cheese blocks fell 2.00¢ to $1.8800/lb; barrels steady at $1.8000/lb amid Mexican tariff uncertainty.
Feed costs are rising: corn is up 3%, soybean meal is up 8% yearly, and profit margins are squeezing.
Milk-feed ratio at 2.10, below the 5-year average (2.45) and breakeven (2.25 for 5% profit).
Experts advise hedging 50% of Q2 corn needs at $4.70/bu (December futures).
Consider pivoting to niche markets: raw milk sales offer +$4.50/cwt premiums.
62% of traders are bearish; watch for the USDA export report and Mexico tariff decision.
Wisconsin dairy exports are particularly vulnerable to Canadian and Mexican trade disputes.

CME Dairy Market Report, Butter Prices, Tariff Turmoil, Dairy Market Trends, Feed Costs

Butter Prices Collapse 4.50¢ as Canada Retaliates; Cheese Holds Steady Amid Feed Cost Uncertainty

Class III Milk vs. Feed Costs (Feb 2025):

Class III: $19.15/cwt ➔ ━━━━━━━━ (Flat since Feb 10)
Corn: $4.82/bu ➔ ↑3% vs. Jan 📈
Soybean Meal: $301.10/ton ➔ ↑8% YoY 📉

Butterfat vs. Protein Payouts:

Butterfat: $2.37/lb ➔ 🔻12% below 2024 peak
Protein: $1.88/lb ➔ ▬▬▬ (3% above Jan avg)

Key Price Changes & Market Trends

Product	Closing Price	Change from Yesterday	Impact on Milk Components (per cwt)*
Butter	$2.3700/lb	-4.50¢	Butterfat payout: -$0.48/cwt
Cheese (Blocks)	$1.8800/lb	-2.00¢	Protein payout: -$0.15/cwt
Cheese (Barrels)	$1.8000/lb	Unchanged	—
Nonfat Dry Milk	$1.2250/lb	-1.50¢	Other solids: -$0.10/cwt
Dry Whey	$0.5350/lb	-1.00¢	—

Component Impact Calculation: Based on USDA Class III/IV formulas (3.5% butterfat, 3.1% protein). Sources: [USDA WASDE].

Commentary:

Butter’s 4.50¢ plunge reflects Canada’s impending 25% tariff on U.S. butter exports, effective March. Wisconsin, which ships 25% of its dairy to Canada, faces immediate oversupply pressures.
Cheese blocks dipped 2.00¢ as Mexico’s proposed 25% cheese tariff looms. Barrels stabilized due to steady domestic demand.
NDM’s decline (-1.50¢) aligns with USDA’s lowered 2025 skim-solids export forecast (-3%).

Volume and Trading Activity

Product	Trades	Open Bids/Offers	Liquidity Risk
Butter	2	1 bid, 4 offers	High risk: Thin trading amplifies volatility
Cheese Blocks	3	0 bids, 0 offers	Moderate risk: Export uncertainty
Cheese Barrels	5	0 bids, 3 offers	Low risk: Steady domestic bids

Key Takeaway: Butter’s two trades (-4.50¢) signal panic selling; Wisconsin exporters report canceled Canadian orders.

Global Context

Canada’s Retaliation: Impending counter-tariffs of $155B target U.S. dairy products, including Wisconsin cheese. For every $1M in lost exports, 12 Wisconsin farms risk closure.
New Zealand Competition: NZ’s 2% milk output rise floods Asia with 25M lbs/month of butter, undercutting U.S. prices by $0.10/lb.
Mexico Tariff Threat: 25% duty on U.S. cheese could slash Wisconsin’s $6.3B annual dairy exports by 30%.

Forecasts & Milk-Feed Ratio Analysis

Metric	Current Value	5-Year Average	Outlook
Milk-Feed Ratio	2.10	2.45	Below breakeven (requires 2.25 for 5% profit)
Class III (MAR)	$19.15/cwt	—	Flat since Feb 10 📉 vs. USDA’s $19.20/cwt
Corn Futures (DEC)	$4.70/bu	$4.55/bu	Hedge 50% of Q2 needs at $4.70/bu

Actionable Insight:

Hedging Strategy: Lock 50% of Q2 corn via DEC futures ($4.70/bu) to offset soybean meal’s 8% YoY surge ($301.10/ton).
Milk Check Impact: Current butterfat/protein prices equate to $20.15/cwt Class III—$0.95 below breakeven for 500 cow herds.

Market Sentiment

Wisconsin Dairy Co-op Manager: “Canada’s tariffs could idle 15% of our processing lines. We’re scrambling for domestic buyers.”
Feed Analyst: “With corn at $4.82/bu and soybean meal up 8%, revisit feed efficiency or cull low-yield cows.”
Overall Mood: 62% bearish (CME Trader Survey), driven by tariff risks and HPAI outbreaks in Midwest herds.

Closing Summary & Operational Recommendations

Summary: Butter’s freefall (-4.50¢) and cheese’s fragility underscore tariff-driven chaos. Feed costs (+3% corn, +8% meal) compress margins below sustainability.

Farm-Level Actions:

Feed: Secure 50% of Q2 corn at $4.70/bu (DEC futures). Use options for soybean meal exposure.
Export Pivot: If Mexico tariffs pass, shift 20% of April milk to NDM (despite weak prices) or direct-to-consumer raw milk (+$4.50/cwt premiums).
Policy Watch: Lobby for USDA’s Dairy Margin Coverage enhancements before the March 1 deadline.

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Here are three related articles from www.thebullvine.com, in bullet form with titles and hyperlinks:

Categories : CME Dairy Markets

Tags : butter prices, CME Dairy Market Report, dairy market trends, Feed Costs, Tariff Turmoil

CME Dairy Market Report: February 20, 2025: Butter Slump, Cheese Stability, and Feed Cost Impacts

Thursday, February 20th, 2025

Today’s market churned out some surprises. Butter’s on a slippery slope, cheese is holding steady (for now), and global trade winds are blowing in some stormy forecasts. From Mexican tariff threats to New Zealand’s milk tsunami, we’ve got the scoop on what’s moving markets. Ready to dive in?

Summary:

Alright, let’s break down today’s dairy market action! Butter took a hit, sliding 1.75¢ to $2.4225/lb as global competition, especially from the EU, put the squeeze on. Cheese markets were a mixed bag – blocks inched up 0.25¢, hanging tough on steady pizza demand, but barrels stumbled 2.25¢ as traders got jittery over Mexico’s potential 25% tariff. NDM dropped 2¢, feeling the heat from weak Asian demand. The big story? USDA trimmed its milk production forecast, citing smaller herds, while feed costs are doing the cha-cha – corn’s up, soybean meal’s down. Class III futures settled at $19.14/cwt, reflecting a cautious outlook. Oh, and keep an eye on New Zealand – they’re flooding the market with milk (+3% year-over-year) and cozying up to Vietnam with a new trade deal. Bottom line: It’s a wild ride out there, folks. Hedge wisely, and maybe consider Central American exports to offset that Mexican curveball!

Key Takeaways:

Butter prices declined 1.75¢ to $2.4225/lb, pressured by global competition and EU exports.
Cheese markets split: blocks up 0.25¢, barrels down 2.25¢ on Mexico tariff concerns.
NDM fell 2¢ due to weak Asian demand.
USDA lowered its 2025 milk production forecast by 0.3B lbs, citing smaller herd sizes.
Feed costs mixed: Corn futures rose 2.1% week-over-week, while soybean meal dipped 0.8%.
Class III milk futures for March settled at $19.14/cwt, reflecting cautious market sentiment.
Mexico’s proposed 25% tariffs on U.S. cheese significantly threaten exports.
New Zealand’s milk production surged 3% year-over-year, intensifying global competition.
Traders recommend hedging 50% of Q2 cheese production amid tariff uncertainty.
Analysts suggest exploring Central American markets to diversify export risks.
Overall market sentiment is neutral to bearish as traders await tariff resolutions and Q1 export data.

CME Dairy Market Report, Butter Prices Decline, Cheese Market Stability, Feed Cost Volatility, Mexico Tariff Threats

Butter Prices Slide on Export Uncertainty; Cheese Markets Hold Steady Amid Mixed Trading Activity

Key Price Changes & Market Trends

Product	Closing Price	Change from Yesterday
Cheese (Blocks)	$1.9000/lb	+0.25¢
Cheese (Barrels)	$1.7850/lb	-2.25¢
Butter	$2.4225/lb	-1.75¢
Nonfat Dry Milk (NDM)	$1.2500/lb	-2.00¢
Dry Whey	$0.5450/lb	NC

Commentary:

Cheese blocks edged up 0.25¢ on light bidding interest, supported by steady domestic demand for pizza and processed cheese.
Cheese barrels fell 2.25¢ as traders priced in potential disruptions from Mexico’s proposed 25% retaliatory tariffs on U.S. dairy[6][9].
Butter declined 1.75¢ amid softening global demand and concerns over EU export competition[6].
NDM dropped 2.00¢ due to weaker international buying interest, particularly in Southeast Asia.

Volume and Trading Activity

Butter saw moderate activity with six trades executed, though offers outnumbered bids 4-to-1.
Cheese blocks had three trades with a narrow bid/ask spread, signaling cautious optimism.
Dry whey remained untraded, reflecting stagnant global demand for protein additives.

Global Context

Mexico Tariff Threat: Proposed 20-25% tariffs on U.S. cheese (25% of total exports) pressured barrel prices.
New Zealand Competition: Record milk production (+3% YoY) and a new trade deal with Vietnam intensified competition in Asian markets.
EU-Japan Trade Agreement: European butter and cheese gained tariff advantages in Japan, weakening U.S. export prospects.

Forecasts and Analysis

Metric	Current Value	USDA Forecast (2025)
All-Milk Price	$23.05/cwt	$22.60/cwt[5][8]
Class III Milk Price	$19.15/cwt	$19.10/cwt[8]
Corn (Dec Futures)	$4.7875/bu	$4.70–$4.90/bu

Analysis:

Due to smaller herd sizes, the USDA revised its 2025 milk production forecast downward by 0.3B lbs.
Feed costs showed mixed signals: Corn futures rose 2.1% WoW to $4.9750/bu, while soybean meal dipped 0.8%.
Class III futures for March settled at $19.14/cwt, reflecting bearish sentiment for cheese markets.

Market Sentiment

Trader Insight: “If Mexico finalizes tariffs, cheese markets could face a 10-15% correction by March,”noted a CME floor broker.
Analyst View: “Butter’s rally last week was unsustainable—today’s pullback aligns with global oversupply trends,” stated CoBank’s Corey Geiger.
Overall: Neutral-to-bearish sentiment prevails as traders await tariff resolutions and Q1 export data.

Closing Summary & Recommendations

Summary: Butter and NDM faced headwinds from global oversupply and trade risks, while cheese markets stabilized on domestic demand. Feed cost volatility and Mexico’s tariff threats dominate short-term risks.

Recommendations:

Hedge Cheese Exposure: Lock in prices for 50% of Q2 production amid tariff uncertainty.
Monitor Corn Futures: Pre-book 30% of Q3 feed needs if December corn dips below $4.70/bu.
Diversify Exports: Explore Central American markets under CAFTA-DR to offset Mexican risks.

Learn more:

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Categories : CME Dairy Markets

Tags : butter prices decline, cheese market stability, CME Dairy Market Report, Feed Cost Volatility

CME Dairy Market Report February 19, 2025: Butter Soars, Cheese Stumbles

Wednesday, February 19th, 2025

Butter prices surged 3.00¢/lb today on tightening inventories and strong global demand, while cheddar blocks fell 2.25¢/lb amid Mexico’s proposed 25% retaliatory tariffs. USDA’s revised milk production forecast (-0.3B lbs) and New Zealand’s export competition signal transformative shifts, with Class III futures dropping to $19.15/cwt on cheese market pressures

Summary:

The CME dairy market on February 19, 2025, painted a mixed picture, with butter prices surging 3.00¢ to $2.4400/lb on strong export demand and tight inventories, while cheese markets retreated. Cheddar blocks fell 2.25¢ to $1.8975/lb, and barrels dropped 0.75¢ to $1.8075/lb, reflecting weak trading activity and uncertainty surrounding potential Mexican tariffs. Nonfat Dry Milk and Dry Whey both declined 1.00¢ to $1.2700/lb and $0.5450/lb respectively, due to subdued global demand. The USDA revised its 2025 milk production forecast downward to 227.9 billion pounds, with an all-milk price projection of $23.05/cwt. Class III futures for March settled at $19.15/cwt, down 2.4% week-over-week, mirroring cheese market weakness. Feed costs showed some relief with corn futures dropping to $4.8675/bu, though soybean meal edged up to $294.80/ton. Market sentiment remains cautiously optimistic for butter but bearish for cheese, with traders closely monitoring export developments and feed cost volatility.

Key Takeaways:

Butter prices jumped 3.00¢ to $2.4400/lb, driven by strong export demand and tight inventories.
Cheese markets declined: blocks fell 2.25¢ to $1.8975/lb, barrels dropped 0.75¢ to $1.8075/lb.
Potential 20-25% Mexican tariffs on U.S. cheese exports are creating market uncertainty.
USDA lowered its 2025 milk production forecast to 227.9 billion pounds.
All-milk price projection for 2025 stands at $23.05/cwt, up 2.7% year-over-year.
Class III futures (March) settled at $19.15/cwt, down 2.4% week-over-week.
Feed costs showed mixed signals: corn futures dropped to $4.8675/bu, while soybean meal rose to $294.80/ton.
Global competition intensifies with EU-Japan and New Zealand-Vietnam trade deals threatening U.S. exports.
Traders recommend hedging 50% of Q2 corn needs below $4.90/bu.
Market sentiment: cautiously optimistic for butter, bearish for cheese due to trade risks.

butter prices, cheese market, USDA milk production, Mexican tariffs, global dairy competition

“Butter Prices Jump 3.00¢ on Export Surge; Cheese Markets Stumble Amid Mexican Tariff Uncertainty”

Key Price Changes & Market Trends

Product	Closing Price	Change from Yesterday
Cheese (Blocks)	$1.8975/lb	-2.25¢
Cheese (Barrels)	$1.8075/lb	-0.75¢
Butter	$2.4400/lb	+3.00¢
Nonfat Dry Milk	$1.2700/lb	-1.00¢
Dry Whey	$0.5450/lb	-1.00¢

Commentary:
Butter led gains with a 3.00¢/lb surge fueled by tightening domestic inventories and robust foodservice demand, despite a 7% YoY increase in U.S. butter stocks7. Cheese markets declined sharply, with blocks dropping 2.25¢/lb and barrels 0.75¢/lb, reflecting stalled export momentum as Mexico threatens 20-25% tariffs on $950M in annual U.S. cheese exports. Nonfat Dry Milk (NDM) and Dry Whey fell 1.00¢/lb each amid weak global demand, particularly in Southeast Asia where New Zealand’s whey prices undercut U.S. offers.

Volume and Trading Activity

Butter: 18 trades executed with active bids/offers at $2.4400/lb, signaling commercial hedging ahead of Q1 inventory reports.
Cheese: Zero trades for blocks/barrels—the first inactive session since November 2024—as buyers await clarity on Mexico’s retaliatory measures.
NDM: 2 trades at $1.2700/lb, aligning with USDA’s revised 2025 skim-solids export forecast of 49.1B lbs(-0.4B lbs).

Global Context

CAFTA-DR Impact: U.S. dairy exports to Central America hit $441M in 2025 (up 1,117% since 2006), but Nicaragua’s $42k/shipment port fees and El Salvador’s 72-day approval delays hinder growth.
EU Competition: EU-Japan trade deals threaten $1.3B in U.S. cheese exports by 2030, while New Zealand secured 45% tariff cuts in Vietnam.
Canada’s Grade A Standards: U.S. exporters face hurdles meeting Canada’s “substantially equivalent” certification for fluid milk, risking $450M in annual sales.

Forecasts and Analysis

USDA Revisions: The 2025 milk production forecast has been lowered to 227.9B lbs (-0.3 B lbs), and all milk prices are projected at $23.05/cwt (+2.7% YoY).
Class III/IV Futures:
- Class III (MAR) fell to $19.15/cwt (-2.4 % WoW) on cheese weakness.
- Class IV (MAR) held at $19.15/cwt, supported by Butter’s rally7.
Feed Costs: Corn (MAR) dropped to $4.8675/bu (-3.0% WoW), but soybean meal edged to $294.80/ton, pressuring margins.

Market Sentiment

Trader Insight: “Butter’s rally is sustainable through Q2, but cheese needs tariff relief to rebound,” noted a CME floor broker.
Analyst View: Corey Geiger (CoBank) emphasized, “Mexico buys 25% of U.S. dairy exports—losing this market would crater farmgate prices”.
Overall: Cautious optimism for butter, bearish cheese sentiment on trade risks.

Closing Summary & Recommendations

Summary: Butter’s rally (+3.00¢) contrasted with cheese’s tariff-driven slump, while feed cost volatility persists.

Action Items:

Export Diversification: Leverage CAFTA-DR’s $527M export potential by targeting Guatemala’s bakery sector (NDM) and Honduras’ artisanal cheese demand.
Risk Management: Hedge 50% of Q2 corn needs below $4.90/bu using DEC futures at $4.7575/bu.
Compliance Prep: Audit facilities for Canada’s Grade A equivalence to avoid $1.2B in retaliatory tariffs.

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Categories : CME Dairy Markets

Tags : butter prices, cheese market, Mexican tariffs, USDA milk production

CME Dairy Market Report 02/18/25: Structural Shifts Reshape Pricing Dynamics as FMMO Reforms Loom

Tuesday, February 18th, 2025

Dairy markets face a pivotal moment as butter prices surge amid global supply shifts and looming Federal Milk Marketing Order reforms. With EU cream shortages driving U.S. exports and new pricing formulas set for June, producers navigate a complex landscape of opportunity and risk. Dive into our comprehensive analysis for actionable insights.

Summary:

In today’s dairy market report, butter prices surged 3.25¢ to $2.4100/lb, driven by tightening EU supplies and strong import demand. Cheese markets remained stable, with blocks holding at $1.9200/lb, as traders await the impact of upcoming Federal Milk Marketing Order reforms set for June 2025. These reforms, including changes to Class I pricing and removing barrel cheese from pricing formulas, are poised to reshape market dynamics. Global factors continue to influence U.S. markets, with New Zealand’s focus on protein concentrates reducing butter competition and China’s projected 3% decline in cheese imports affecting export outlooks. USDA forecasts suggest potential margin compression for producers, with the all-milk price projected at $22.55/cwt for 2025, down from $23.05/cwt in 2024. Amidst these changes, producers should consider strategic feed cost management and hedging strategies to navigate the evolving landscape.

Key Takeaways:

Butter prices jumped 3.25¢ to $2.4100/lb due to EU supply shortages and increased import demand.
Cheese markets held steady, with blocks at $1.9200/lb, as the industry anticipates FMMO reforms in June 2025.
FMMO changes include reverting to “higher-of” Class I pricing and removing barrel cheese from pricing formulas.
Global dynamics: EU butterfat inventories are down 4% YoY; New Zealand focuses on protein concentrates.
China’s projected 3% decline in 2025 cheese imports may impact U.S. export opportunities.
USDA forecasts lower all-milk prices for 2025 at $22.55/cwt, down from $23.05/cwt in 2024.
Feed costs remain a concern: March corn futures at $5.02/bu, soybean meal at $293.60/ton (+4.3% YoY).
Producers advised to lock in December corn futures at $4.77/bu to manage feed costs.
Labor shortages persist, with dairy workers averaging 42.1 weekly hours.
Recommendation to execute 50% of Q2 butter sales at $2.65+/lb to capitalize on EU demand.

Butter Prices Surge 3.25¢ on EU Import Demand; Cheese Markets Await FMMO Formula Changes Effective June 2025

Key Price Changes & Market Trends

Product	Closing Price	Change from Yesterday	Source
Butter	$2.4100/lb	+3.25¢	CME Cash Data
Cheese (Blocks)	$1.9200/lb	Unchanged	CME Cash Data
Cheese (Barrels)	$1.8150/lb	-0.25¢	CME Cash Data
Nonfat Dry Milk	$1.2800/lb	Unchanged	CME Cash Data
Dry Whey	$0.5550/lb	Unchanged	CME Cash Data

Commentary: Butter rallied 3.25¢ to $2.4100/lb as EU buyers sought U.S. supplies amid 4% YoY butterfat inventory declines.Cheese blocks held at $1.9200/lb despite zero trades, reflecting producer caution ahead of June’s FMMO updates removing barrel cheddar from pricing formulas. Barrels dipped 0.25¢ as exporters awaited USDA’s projected 3% decline in China’s 2025 cheese imports.

Volume and Trading Activity: Butter saw nine trades with one bid and two offers, signaling institutional positioning for spring demand. Cheese markets remained stagnant, aligning with USDA’s forecast for 227.2B lbs 2025 milk production (−0.8B lbs vs prior estimate). Dry whey and NDM markets showed no bids/offers amid stable Chinese whey demand ($0.5550/lb).

Global Context

EU Butter Shortages: EU cream imports will rise 8% in Q1 2025, driving U.S. butter exports to 944M lbs milk-equivalent (+128M lbs YoY).
New Zealand Production: Milk collection is up 1.2% year over year, but focusing on protein concentrates reduces global butter competition.
China’s Skim-Solids Pullback: Dry whey exports fell 518M lbs milk-equivalent YoY, offsetting stable cheese demand.

Forecasts and Analysis

USDA WASDE Revisions (February 2025):

Metric	2024 Forecast	2025 Forecast	Change vs. 2024
All-Milk Price	$23.05/cwt	$22.55/cwt	-0.35¢
Class III Milk	$19.70/cwt	$18.80/cwt	-0.90¢
Class IV Milk	$20.80/cwt	$20.40/cwt	-0.40¢
Butter Price	$2.6950/lb	$2.4525/lb	-7.2%

Feed Cost Dynamics:

March corn futures: $5.02/bu (−2.1% MoM) on South American harvests.
Soybean meal futures: $293.60/ton (+4.3% YoY).

Dairy Margin Coverage: In November 2024, the margin above feed costs reached $14.29/cwt (+$4.71 YoY)6.

FMMO Regulatory Updates

Effective June 1, 2025:

Class I Pricing: Return to “higher-of” Class III/IV skim prices vs. “average-of +74¢” formula.
Make Allowances:
- Cheese: $0.2519/lb (+12% vs 2024)
- Butter: $0.2272/lb
- Dry Whey: $0.2668/lb
Barrel Cheese Removal: 500-lb barrels excluded from Dairy Product Mandatory Reporting.

December 1, 2025:

Skim milk composition factors updated to 3.3% protein and 6% other solids.

Market Sentiment

Traders anticipate margin compression:

“The Class III-IV spread narrowing to 39¢ will reduce deploying incentives,” noted a CME analyst.
USDA’s Dairy Confidence Index rose to 58/100 (+4 pts MoM), but labor shortages persist at 42.1 avg weekly hours/hired worker.

Closing Summary & Actionable Insights

Summary:
Butter’s rally reflects structural EU deficits, while cheese markets brace for FMMO formula shifts. USDA’s lowered 2025 milk production forecast (−0.8B lbs) underscores feed-cost pressures.

Recommendations:

Feed Management: Lock December corn futures at $4.77/bu (−4.3% vs spot) using ARMS cost benchmarks.
Butter Hedging: Execute 50% Q2 forward sales at $2.65+/lb to capture EU premiums.
Labor Mitigation: Explore H-2A visas before April’s USDA Farm Labor Survey.

Learn more:

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Categories : CME Dairy Markets

Tags : butter prices, dairy market trends, Federal Milk Marketing Order reforms, global supply shifts

Cheese Holds Steady as Butter and NDM Decline; Trading Activity Subdued

Friday, February 14th, 2025

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.
Butter and nonfat dry milk (NDM) experienced notable price drops, indicating potential selling pressure.
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 market trends, cheese prices stability, butter price decline, global dairy demand, USDA milk price forecast

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.

Class III Milk Price Forecast
[Figure 1: Historical and Projected Class III Milk Prices (Q1 2024 - Q2 2025)]

    $19.50 |                                        *
    $19.00 |                              *        / \
    $18.50 |                    *        / \      /   \
    $18.00 |          *        / \      /   \    /     *
    $17.50 |         / \      /   \    /     *--*
    $17.00 |    *---*   \    /     *--*
    $16.50 |   /         *--*
    $16.00 |--*
           +-----+-----+-----+-----+-----+-----+ 
           Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25
               Historical    Projected

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.

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Categories : CME Dairy Markets

Tags : butter price decline, cheese prices stability, dairy market trends, global dairy demand, USDA milk price forecast

CME Dairy Market Report February 13, 2025: Mixed Signals Amid Global Shifts

Thursday, February 13th, 2025

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.
USDA forecasts indicate higher all-milk prices and reduced feed costs, potentially benefiting dairy farm profitability.
Global dairy trade dynamics affected by regional challenges and economic factors are crucial for stakeholders to monitor.

CME dairy markets, cheese prices, butter decline, USDA milk forecast, global supply growth

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.

Global Factors

The global dairy trade landscape continues to evolve:

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.

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Categories : CME Dairy Markets

Tags : butter decline, cheese prices, CME dairy markets, USDA milk forecast

CME Dairy Markets Churn: Cheese Holds Firm as Butter Melts

Wednesday, February 12th, 2025

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.

dairy market trends, cheese demand, butter prices, avian influenza, milk production forecasts

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.

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Categories : CME Dairy Markets

Tags : avian influenza, butter prices, cheese demand, dairy market trends

Daily CME Dairy Market Insights: February 11, 2025 – From Cash Prices to Global Forecasts

Tuesday, February 11th, 2025

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.
Cheese markets showed modest gains despite limited trading activity, reflecting cautious market sentiment.
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.

dairy market trends, butter prices surge, NDM price decline, global dairy demand, milk-feed ratio challenges

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.

Cheese markets also showed positive movement:

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.

Feed Market Trends

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.

Market Analysis: Understanding Today’s Dairy Market Movements

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.

Global Market Influence

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.

Consumer Trends and Industry Outlook

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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Categories : CME Dairy Markets

Tags : butter prices surge, dairy market trends, global dairy demand, NDM price decline

CME Dairy Market Update for February 10, 2025: Cheese Prices Climb, Market Trends and Farmer Insights

Monday, February 10th, 2025

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.

CME dairy market, cheese prices surge, USDA milk production forecast, dairy exports strong, Federal Milk Marketing Order changes

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.

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Categories : CME Dairy Markets

Tags : cheese prices surge, CME dairy market, dairy exports strong, Federal Milk Marketing Order changes, USDA milk production forecast

CME Dairy Market Update for February 6th, 2025: Butter Drops, Cheese Steady, and Milk Futures Up Despite Cost Challenges

Thursday, February 6th, 2025

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, butter prices, cheese prices, Class III milk futures, feed commodity prices

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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Categories : CME Dairy Markets

Tags : butter prices, cheese prices, Class III milk futures, dairy markets, feed commodity prices

Daily Dairy Market Report – February 5, 2025: Bearish Pressure Intensifies Amid Feed Cost Surge

Wednesday, February 5th, 2025

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.
Cheddar barrel-cheese spread is narrowing, highlighting balanced inventory levels amid declining futures.
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.

dairy market trends, butter prices decline, cheddar block prices, feed cost surge, dairy export strategies

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.
Dry Whey: Declined 1.0¢/lb amid stagnant export interest.

2. Weekly Price Averages

Product	Current Week Avg.	Prior Week Avg.	Weekly Change (%)
Butter	2.4233	2.4745	-2.07
Cheddar Block	1.8742	1.9005	-1.38
Cheddar Barrel	1.8000	1.8490	-2.65
NDM Grade A	1.3400	1.3460	-0.45
Dry Whey	0.6167	0.6770	-8.91

Analysis: Dry whey led weekly declines (-8.9%), while cheese products showed moderate losses.

3. Futures Market Dynamics

Class III Milk (Feb 2025):

Day	Mon	Tue	Wed
Price	$20.06	$20.34	$20.01

Feed Costs:

Corn (Mar 2025): $4.9325/bu (+3.6% WoW).
Soybeans (Mar 2025): $10.5875/bu (+0.2% WoW).

Butter Futures (Feb 2025):

Day	Mon	Tue	Wed
Price	$2.5153	$2.5193	$2.5050

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.

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Categories : CME Dairy Markets

Tags : butter prices decline, cheddar block prices, dairy market trends, feed cost surge

CME Dairy Market Recap February 4th, 2025: Mixed Signals as U.S.-Canada Tariffs are Put on Hold

Tuesday, February 4th, 2025

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.
Cheddar blocks show positive price movement, reflecting steady demand despite tariff effects.
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)

Market Breakdown

Daily Trading Activity (February 4, 2025)

Product	Final Price ($/lb)	Daily 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

Market Analysis

Cheese Market Holds Firm Amid Tariff Implementation

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.

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Categories : CME Dairy Markets

Tags : cheese prices, dairy market turbulence, farmer strategies, global supply growth, U.S.-Canada tariffs

Dairy Market Report February 3rd 2025: US-Canada Tariffs Trigger Price Drop Amid Rising Feed Costs

Monday, February 3rd, 2025

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.

Key Takeaways:

Dairy prices significantly declined, affecting farmers’ revenue amidst rising costs.
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.

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.

Feed Costs Rising

Bad news on feed prices today:

Corn up 7 cents to $4.89/bushel
Soybeans up 16 cents to $10.58/bushel

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.

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Categories : CME Dairy Markets

Tags : cheese prices, dairy markets, farmers margins, Feed Costs

CME Dairy Market January 30th, 2025: Cheese Rises, Butter Falls in Mixed Trading

Thursday, January 30th, 2025

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.

dairy market trends, cheese prices surge, butter prices decline, CME report analysis, dairy farmers strategies

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.

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Categories : CME Dairy Markets

Tags : butter prices decline, cheese prices surge, CME report analysis, dairy market trends

CME Dairy Market Report for January 29th, 2025: Butter Dips, Cheese Rises, Feed Costs Surge

Wednesday, January 29th, 2025

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.

dairy market report, butter prices decline, cheese prices increase, feed costs rise, dairy farmers strategies

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?

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Categories : CME Dairy Markets

Tags : butter prices decline, cheese prices increase, dairy market report, feed costs rise

Cheese Prices Surge Amid Declining Butter: CME Dairy Market Analysis for January 28th, 2025

Wednesday, January 29th, 2025

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.

dairy market trends, cheese prices rise, butter prices decline, Class III futures, CME spot market

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.

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Categories : CME Dairy Markets

Tags : butter prices decline, cheese prices rise, Class III futures, dairy market trends

Cheese Surges, Butter Stays Firm: CME Dairy Market Analysis for January 27th 2025

Monday, January 27th, 2025

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

CME dairy market, cheese prices surge, cheddar blocks increase, milk prices rise, dairy farmers profitability

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.

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Categories : CME Dairy Markets

Tags : cheddar blocks increase, cheese prices surge, CME dairy market, dairy farmers profitability, milk prices rise

CME Dairy Market Report January 23rd 2025 – Cheese Prices Jump, Butter Dips

Thursday, January 23rd, 2025

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!

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Categories : CME Dairy Markets

Tags : butter prices, cheese prices, dairy market report, Feed Costs, milk prices

CME Dairy Market Report: January 22, 2025 – Broad Weakness Amid Disease Concerns & Policy Changes

Wednesday, January 22nd, 2025

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.

CME dairy market, butter prices, Federal Milk Marketing Order, Nonfat Dry Milk, avian influenza

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.

Daily CME Cash Dairy Product Prices ($/lb.) – January 22, 2025

Final	Change ¢/lb.	Trades	Bids	Offers
Butter	2.5225	-1.25	3	1	0
Cheddar Block	1.7750	-0.50	4	6	0
Cheddar Barrel	1.8100	-4.00	4	1	2
NDM Grade A	1.3525	+0.50	0	4	2
Dry Whey	0.7000	-3.75	4	2	1

Weekly CME Cash Dairy Product Prices ($/lb.) – January 22, 2025

	Mon	Tue	Wed	Thur	Fri	Current Avg.	Prior Week Avg.	Weekly Volume
Butter	–	2.5350	2.5225	–	–	2.5288	2.5640	6
Cheddar Block	–	1.7800	1.7750	–	–	1.7775	1.8825	5
Cheddar Barrel	–	1.8500	1.8100	–	–	1.8300	1.8740	5
NDM Grade A	–	1.3475	1.3525	–	–	1.3500	1.3680	3
Dry Whey	–	0.7375	0.7000	–	–	0.7188	0.7380	4

Price Action Details

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.

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Categories : CME Dairy Markets

Tags : avian influenza, butter prices, CME dairy market, Federal Milk Marketing Order, nonfat dry milk

Dairy Market Alert: Class III Milk and Cheese Futures Dive, Farmers Brace for Impact

Wednesday, January 22nd, 2025

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?

CME dairy markets, Class III milk futures, cheese futures decline, USDA policy changes, dairy market volatility

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.

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Categories : CME Dairy Markets

Tags : cheese futures decline, Class III milk futures, CME dairy markets, USDA policy changes

Global Dairy Market Recap: Mixed Signals and Opportunities – January 20, 2025

Monday, January 20th, 2025

Discover the changing trends in the global dairy market. How can farmers handle price changes, production shifts, and new opportunities to boost their profits?

<a href="https://rss.com/podcasts/the-bullvine/1856198">E127 Global Dairy Market Recap: Mixed Signals and Opportunities – January 20, 2025</a>

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.

dairy industry trends, European butter prices, Skim Milk Powder prices, milk production forecasts, dairy market strategies

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.

Maximizing Advantage: Strategic Insights for Dairy Farmers Amid Evolving Market Dynamics

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.

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Categories : CME Dairy Markets, Dairy Markets

Tags : dairy industry trends, dairy market strategies, European butter prices, milk production forecasts, skim milk powder prices

US Dairy Market Faces Volatility: Cheese Prices Rise, Butter Dips, and USDA Reforms Loom

Friday, January 17th, 2025

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.

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Categories : CME Dairy Markets

Tags : butter prices, cheese prices, dairy farmers adaptability, milk pricing reforms, US dairy market

Spot Block Prices Surge to Two-Month High as Butter Weakens: Key Impacts on the Dairy Market

Friday, January 17th, 2025

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.

CME dairy market, Class III futures prices, butter market trends, Foot-and-Mouth Disease impact, dairy farmers strategies

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.

Butter Market Faces Pressures Amid Cream Surplus: Future Projections

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.

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Categories : CME Dairy Markets

Tags : butter market trends, Class III futures prices, CME dairy market, Foot-and-Mouth Disease impact

Navigating Dairy Market Volatility: Price Swings and Emerging Trends for January 16th 2025

Thursday, January 16th, 2025

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.

dairy market volatility, cheese prices drop, Class III milk futures, European cheese impact, inflation concerns

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.

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Categories : CME Dairy Markets

Tags : cheese prices drop, Class III milk futures, dairy market volatility, European cheese impact, inflation concerns

CME Dairy Market Highlights: January 15th, 2025 Volatility in Class III and Cheese Futures

Wednesday, January 15th, 2025

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.

dairy market report, butter prices, nonfat dry milk futures, Class III prices, dairy trade analysis

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.

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Categories : CME Dairy Markets

Tags : butter prices, Class III prices, dairy market report, nonfat dry milk futures

Butter Demand Skyrockets: U.S. Markets Tighten as Churns Race to Keep Up

Monday, January 13th, 2025

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 prices US, dairy industry trends, butter production statistics, milk fat content, US butter exports imports

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: Midwest Dairy 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.

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Categories : CME Dairy Markets

Tags : butter prices US, butter production statistics, dairy industry trends, milk fat content

Class III and Cheese Markets Face Turbulence with Early 2025 Selloff

Monday, January 13th, 2025

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.
USDA’s WASDE report highlighted declining corn yields, affecting grain markets positively.
The stronger than expected US labor market continues to influence broader economic conditions.

dairy market trends, cheese prices, Class III market, NFDM price drop, supply and demand dynamics

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.

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Categories : CME Dairy Markets

Tags : cheese prices, Class III market, dairy market trends, NFDM price drop

Weekly Dairy Market Update: Navigating Post-Holiday Adjustments and Production Shifts

Friday, January 10th, 2025

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.

dairy market trends, milk price spike, butter production changes, cheese industry decline, whey protein demand

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.

Navigating Futures: Stability Amidst Dairy Market Volatility

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!

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Categories : CME Dairy Markets

Tags : butter production changes, cheese industry decline, dairy market trends, milk price spike

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Archive for CME Dairy Markets

Key Price Changes & Market Trends

Volume and Trading Activity

Global Context

Supply Challenges: Bird Flu Impact on Dairy Production

Forecasts and Analysis

Market Sentiment and Alternative Dairy Trends

Regional Market Perspectives

Closing Summary & Recommendations

Cheese markets plummet as Federal Order reforms loom. Discover how regional disparities and global pressures are reshaping dairy profitability in 2025.

CHEESE MARKETS EXTEND WEEKLY DECLINE: BLOCKS DOWN 9.75¢ SINCE MONDAY

WEEKLY TREND REVEALS ALARMING 21.7¢ COLLAPSE IN BLOCK PRICES

$3.45/CWT FEED COST GAP: WHY YOUR ZIP CODE DETERMINES YOUR PROFIT MARGIN

PROCESSING CAPACITY DISTRIBUTION: THE NEW COMPETITIVE BATTLEGROUND

GLOBAL MARKET IMPACTS: INTERNATIONAL PRESSURES ADD TO DOMESTIC CHALLENGES

FORWARD PRICE PROJECTIONS: USDA FORECAST VS. FUTURES MARKET

JUNE 1 FEDERAL ORDER CHANGES: WHAT YOU NEED TO KNOW NOW

WINNING STRATEGIES: POSITION YOUR DAIRY FOR SUCCESS AMID MARKET EVOLUTION

The Bullvine Bottom Line:

Learn more

Cheese prices plunge as federal reforms loom. Feed costs drop 10% but regional gaps widen.

PRICE TRACKER: Component Values Under Pressure

Federal Order Class Price Implications

PROCESSING CAPACITY: Regional Expansions Create Opportunity & Risk

MARKET RETREAT EXPLAINED: Demand Concerns Outweigh Supply Tightness

COOPERATIVE STRATEGIES: Mixed Approaches to Current Markets

FEDERAL ORDER REFORM: Potential Game-Changer for Pricing

FEED COST OUTLOOK: Margin Improvement Opportunity

PRODUCER PLAYBOOK: Regional Strategies

Northeast Producers

Upper Midwest Producers

Western & Southwest Producers

All Regions: Risk Management

MARKET OUTLOOK: Mixed Signals Require Strategic Flexibility

Dairy markets slump: Cheese prices crash 21¢ this week as feed costs jump 3.4%. Can producers protect shrinking margins?

Key Price Changes & Market Trends

Volume and Trading Activity

Weekly Price Comparison

Feed Cost Pressure Intensifies

Global Context and International Markets

Updated USDA Forecasts and Implications

Recent USDA Wholesale Product Prices

CME Spot Prices vs. USDA AMS Survey Price Relationship

Market Sentiment and Industry Perspectives

Strategic Recommendations for Producers

Conclusion: Navigating Price Volatility and Cost Pressure

Cheese markets diverge as blocks rise and barrels tumble, widening spreads. Learn how these shifts impact your milk check and what actions to take now.

Executive Summary

Key Takeaways

CME CASH DAIRY PRICES: THE NUMBERS THAT MATTER

TRADING PATTERNS REVEAL INSIDER SENTIMENT

WEEKLY TREND ANALYSIS: SPOTTING CRUCIAL PATTERNS

MAXIMIZE YOUR MARGINS: STRATEGIC POSITIONING NOW

COMPONENT OPTIMIZATION: THE HIDDEN OPPORTUNITY

FEED COST ADVANTAGE: LEVERAGE THIS WINDOW

FUTURES INSIGHTS: WHAT THE SMART MONEY SEES

GLOBAL PERSPECTIVE: INTERNATIONAL FORCES SHAPING YOUR MILK CHECK

YOUR 3-STEP ACTION PLAN: WHAT PROGRESSIVE PRODUCERS ARE DOING NOW

1. IMPLEMENT COMPONENT-FOCUSED NUTRITION IMMEDIATELY

2. EXECUTE TARGETED RISK MANAGEMENT THIS WEEK

3. MONITOR THE BLOCK-BARREL RELATIONSHIP DAILY

BOTTOM LINE: WHAT THIS MEANS FOR YOUR OPERATION

Learn more:

Trade drama shakes dairy markets! Cheese prices hit 11-month lows, butter slides, and milk futures plummet. How can producers adapt to survive?

USMCA Trade Drama: What Dairy Farmers Need to Know Now

Inside Canada’s Milk Quota System: Stability vs. Market Access

China’s Strategic Dairy Tariffs: Smart Trade Policy in Action

Cheese Market Collapse: When Good News Gets Ignored

The Disconnect Between Data and Market Reality

What This Means For Your Operation

Butter’s Surprising Challenge: Too Much of a Good Thing

Manufacturing Response to Cream Surplus

Production Trends Behind the Butterfat Surplus

Powder Markets Signal Export Warning Signs

Geographic Shift in Export Patterns

Milk Futures Flash Warning Signs for Farm Profitability

What This Means for Your Bottom Line

Feed Markets: Rare Stability in a Volatile Week

Market Outlook: Navigating Trade Complexities in 2025