2025’s kicking off with a wild ride of heifer shortages, production swings, and market surprises. From California’s bird flu bounce-back to China’s renewed appetite for our products, we’re breaking down the latest dairy market trends that’ll impact your bottom line this year.
As the dairy industry approaches 2025, significant growth is on the horizon. Despite the heifer shortage, we have strategic plans to facilitate our expansion. This week’s report details the impact of milk production, global markets, and prices on our dairy business. From California’s bird flu recovery to China’s increasing dairy purchases, we’re optimistic about the industry’s future.
Heifer Shortage and Milk Production
| Year | Projected U.S. Milk Production (billion pounds) | Average Milk Cows (million) | Milk per Cow (pounds) |
|---|---|---|---|
| 2024 | 227.3 | 9.345 | 24,330 |
| 2025 | 227.2 | 9.390 | 24,200 |
This table summarizes key production metrics and shows the slight decrease expected in 2025.
The heifer shortage is significantly affecting our operations. In 2024, we only sent 2.76 million cows to slaughter—the lowest number since 2008. While this helped stabilize our herds, achieving growth has been challenging. Most major dairy states are increasing milk production compared to last year, although the outcomes vary.
- Wisconsin: up a hair at 0.1%
- Texas: jumped 7.5%
- Idaho: up 3.5%
- New York: inched up 0.7%
- Michigan: climbed 1.4%
However, California’s dairy sector is facing significant challenges due to the impact of the bird flu outbreak, which has affected milk production in the state. Production dropped 6.8% due to the bird flu outbreak, significantly impacting the state’s dairy industry. The good news is that January is looking better. New infections are down, so milk output should start picking up.
Butterfat and Protein Production
However, there are some positive developments to highlight:
- Butterfat production jumped 1.9% in 2024
- Protein output grew 0.5%
- Nonfat solids fell 0.1%, and other milk solids dipped 0.4%
Butter stocks grew to 222.4 million pounds in December 2024, up 11.4% from the previous year. Consumers have shown a preference for butter as well. Domestic consumption leaped 6% in 2023 and another 7% in 2024.
Cheese and Whey Markets
The cheese market is currently undergoing a transitional phase. Stocks were tight in 2024, but now we’re looking at more output in 2025. There’s also some worry about potential tariffs. Stocks grew from November to December but were still 7% smaller than the previous year.
In the whey market, high prices are starting to subside. Buyers live hand to mouth, hoping for more dry whey output and lower prices.
Global Dairy Trade and China’s Imports
Positive news globally: Milk powder prices have risen at the Global Dairy Trade auction, indicating a positive trend for the dairy market. Whole milk powder jumped 5%. China is also starting to buy more dairy products. Their imports of whole milk powder, skim milk powder, whey powder, and cheese are all up compared to last December.
Milk Powder Prices and Market Trends
| Product | 2025 Price Forecast (USD/Pound) | Change from Previous Forecast |
|---|---|---|
| Cheddar Cheese | 1.865 | +$0.065 |
| Dry Whey | 0.640 | +$0.045 |
| Butter | 2.695 | +$0.010 |
| Nonfat Dry Milk | 1.340 | +$0.040 |
U.S. milk powder prices declined slightly, dropping 2.5 cents to $1.3475. People are worried about trade prospects and a rebound in production.
In the futures market:
- Class III closed at $19.37 per cwt., down 81¢ from the previous value.
- Most Class IV contracts lost about a nickel
On the feed side:
- March corn futures held steady at $4.8575 per bushel
- March soybeans added 20¢, hitting $10.55
- Soybean meal futures jumped $6.60 to $304 per ton
Additionally, it’s essential to monitor Argentina’s developments. Their president just announced a temporary cut to corn and soy export tariffs.
Looking Ahead
The USDA now estimates that we’ll produce about 227.2 billion pounds of milk in 2025, down slightly from its earlier estimate. It also forecasts that our national herd will comprise about 9.390 million cows. Rabobank predicts that the milk supply from the big exporting countries will grow by about 0.8% in 2025. Feed is cheaper, and the weather has been better.
Prices are showing favorable indicators:
- The projected all-milk price for 2025 is now $23.05 per cwt, showing an increase of 50 cents from the previous estimate.
- Cheddar cheese is looking at $1.865 per pound
- Butter’s at $2.695 per pound
Consumers are increasingly choosing organic whole milk, cottage cheese, and yogurt. To drive positive changes, consider exploring new options.
The Bottom Line
Together, we can overcome challenges and achieve success. Stay informed, innovate continuously, and ensure the resilience of the dairy industry. How do you plan to address these challenges on your farm? Every contribution plays a part in driving our industry forward. Let’s ensure that dairy excels in 2025!
Key Takeaways:
- U.S. milk production decreased by 0.5% in 2024, facing continued challenges in 2025.
- Skyrocketing heifer prices are prompting farmers to extend the working life of their dairy cows.
- Bird flu continues to affect California, though overall prospects are improving.
- Global milk supply growth is anticipated at 0.8% in 2025.
- China’s increased dairy purchases reflect its recovery from a three-year slump.
Summary:
The U.S. dairy market in 2025 is facing some challenges, like a shortage of heifers and problems with bird flu, affecting milk production. Farmers are keeping their cows longer because replacing them is too expensive. Even with these issues, there’s still some good news. Butter and protein production are both up. There’s a lot of butter around, but cheese prices are unstable. On the bright side, China is buying more dairy, which helps the global market. People in the U.S. are also buying more butter and milk powders. Despite the challenges, 2025 could be an interesting year for the dairy industry, with chances for growth and new opportunities.
Learn more:
- Is 2024 Shaping Up a Disappointing Year for Dairy Exports and Milk Yields?
- US Dairy Farmers’ Guide: Navigating Bird Flu Outbreak – Permits, Quarantines and Beyond
- Navigating the Waves: Dairy Producers Defy Challenges to Keep Barns Full Amid Soaring Milk Prices and Adverse Conditions
Join the Revolution!
Join the Revolution!Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
