Spring flush floods markets! Cheese prices defy logic, China tariffs slam exports. Your survival guide inside.
EXECUTIVE SUMMARY: The North American dairy market faces unprecedented contradictions during the 2025 spring flush: Cheese prices surged 10-11¢/lb despite record milk discounts, while China’s 84% whey tariffs triggered a 2.5¢ price collapse. Butter defied growing inventories with a 5.25¢ rally, and USDA slashed 2025 milk price forecasts to $21.10/cwt (-$1.95 since January). With feed costs squeezing margins and processing plants overwhelmed, producers must navigate surplus milk, shifting trade flows, and volatile futures. Strategic pivots to specialty butter, export diversification, and feed hedging emerge as critical survival tactics.
KEY TAKEAWAYS:
- Milk tsunami: Central U.S. spot milk trades $5 under Class III; 9.41M-head herd strains processing capacity
- Cheese paradox: Barrels hit $1.805/lb (+11¢) as new plants absorb surplus, but USDA warns of $17.60/cwt Class III prices
- Whey wipeout: China’s tariffs erase 38% of U.S. exports—prices plunge to 46.5¢/lb (-35% vs 2019 tariff impact)
- Butter’s hidden play: Inventories up 17%, but unsalted shortages create $0.15/lb premiums for agile producers
- Margin meltdown: Soybean meal dips to $300/ton, but 2025 all-milk forecast down $1.95/cwt since January
Spring flush is in full swing across North America, bringing abundant milk supplies and regional variations in production timing. Southern regions like California and Arizona appear to be past their peak, while northern areas such as Wisconsin and Minnesota are still ramping up output. USDA data shows February 2025 milk production at 17.7 billion pounds, up 0.9% year-over-year when adjusted for leap year effects, with the national herd reaching 9.41 million head — the largest since August 2021.
Spot milk prices in the Central region traded at steep discounts of $1.00 to $5.00 below Class III prices during the week ending April 11, reflecting oversupply as processors struggle to keep pace with production volumes.
Cheese Prices Defy Milk Glut
Cheddar prices surged despite the abundance of discounted milk supplies. CME cheddar barrels gained 11¢ during the week, closing at $1.8050/lb on April 11 — breaking above the $1.80 threshold for the first time since February. Blocks rose by 10.5¢, finishing at $1.7450/lb.
Table: Weekly CME Dairy Spot Price Summary (April 7–11, 2025)
| Commodity | Closing Price (4/11) | Weekly Change (¢/lb) | Total Weekly Trades |
| Butter (Grade AA) | $2.3475 | +5.25 | 30 |
| Cheese (Blocks) | $1.7450 | +10.50 | 27 |
| Cheese (Barrels) | $1.8050 | +11 | 11 |
| Nonfat Dry Milk | $1.1675 | +1 | 10 |
| Dry Whey | $0.4650 | -2 | 11 |
Source: CME Group Data
Analysts attribute this strength to increased demand from new cheese processing plants in Texas and Kansas, expected to add over 360 million pounds of annual cheese production capacity by year-end.
Whey Exports Hit by China Tariffs
China’s retaliatory tariffs on U.S. whey products — now as high as 84% — have sent shockwaves through the market. Dry whey prices at CME fell by 2¢ during the week, closing at $0.4650/lb on April 11.
Table: U.S. Dairy Exports to China (2024)
| Product | Export Volume (Metric Tons) | Share of U.S. Exports to China | Value ($ Million) |
| Whey | 152,000 | 38% | 190 |
| Skim Milk Powder | 128,000 | 32% | 320 |
| Lactose | 72,000 | 18% | 90 |
| Cheese | 32,000 | 8% | 160 |
Source: USDA Trade Data
With China accounting for approximately 40% of U.S. whey exports, manufacturers are scrambling to find alternative markets in Southeast Asia and Latin America.
Butter Market Shows Resilience
Butter prices gained traction despite growing inventories, with CME butter closing at $2.3475/lb on April 11 — up 5.25¢ for the week.
Manufacturers are taking advantage of inexpensive cream supplies to build stocks ahead of summer demand peaks. Interestingly, some producers report tight availability for unsalted butter spot loads as production commitments extend through May.
Nonfat Dry Milk Holds Steady
Nonfat dry milk (NDM) prices edged up slightly during the week, gaining a penny to close at .1675/lb at CME on April 11.
Domestic demand has picked up alongside steady international interest, particularly from Mexico and Southeast Asia.
Feed Costs Add Pressure to Margins
The USDA’s April WASDE report lowered its soybean meal price forecast by $10/ton to $300/ton but kept corn prices steady at $4.35/bushel.
Table: WASDE Feed Price Summary (April 10, 2025)
| Feedstuff | Season-Average Farm Price Forecast ($) | Change from March Forecast ($) |
| Corn | $4.35 / bushel | No change |
| Soybean Meal | $300 / short ton | -$10 |
Source: USDA WASDE Report
Rising feed costs continue to squeeze producer margins as milk price forecasts decline sharply — with the all-milk price projected at .10/cwt for 2025.
Farmer Takeaways: Strategies for Navigating the Spring Flush
- Lock in feed contracts now: Take advantage of lower soybean meal prices while managing corn price risks.
- Diversify export markets: Shift focus from China to Southeast Asia and Latin America for whey and powder sales.
- Capitalize on specialty butter demand: Unsalted butter stocks are tight; explore premium pricing opportunities.
- Monitor processing capacity: New cheese plants are demanding more milk; leverage spot milk sales strategically.
- Evaluate risk management tools: Hedging Class III futures could protect against potential market reversals.
Outlook: Adapting to Market Contradictions
The North American dairy market is presenting a series of contradictions this spring: cheese prices rally while spot milk trades at steep discounts; butter inventories grow yet unsalted formats remain tight; whey markets collapse under tariff pressure despite steady domestic demand.
Producers must stay agile as they navigate abundant milk supplies and volatile commodity markets influenced by geopolitical tensions and shifting consumer preferences.
Final Thought: Will you ride this wave or get caught in its undertow? The producers who thrive will be those who adapt quickly — finding opportunities amidst market chaos while protecting their bottom line through strategic decisions.
Learn more:
- U.S. Milk Production Report – February 2025: Strong Growth Amid Seasonal Flush
Discover how February’s milk production surged 1.0% year-over-year, with component-adjusted output up 3.5%. Learn about regional disparities and strategies to manage the spring flush effectively. - USDA’s 2025 Dairy Outlook: Market Shifts and Strategic Opportunities for Producers
Explore the USDA’s latest projections for milk prices, production trends, and export opportunities. Gain actionable insights on aligning with market shifts to optimize profitability in 2025. - Global Dairy Market Trends 2025: European Decline, US Expansion Reshaping Industry Landscape
Analyze how declining EU production and U.S. expansion are reshaping global dairy markets. Learn how producers can adapt to regional shifts and capitalize on emerging opportunities.
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