Milk Price falls $1.14
The April federal order benchmark Class III milk price was announced by the Agriculture Department at $17.48 per hundredweight, down $1.14 from March, but still $1.98 above April 2024. It’s the lowest Class III price since April 2024. The four month average is at $19.16, up from $15.77 a year ago, and $18.46 in 2023.
Late Friday, May 2, morning Class III futures portended a May price at $18.50; June, $17.82; and July at $18.19; with a peak of $18.63 in September.
The Class IV price was $17.92, down 29 cents from March, $2.19 below a year ago, and the lowest since Oct. 2021. Its average stands at $19.19, down from $19.86 a year ago, and compares to $18.80 in 2023.
Another drop in the All Milk Price and a rise in alfalfa hay pulled the milk feed price lower again. The USDA’s latest Ag Prices report shows the March ratio at 2.46, down from 2.68 in February, and compares to 2.15 in March 2024.
The index is based on the current milk price in relationship to feed prices for a ration consisting of 51% corn, 8% soybeans and 41% alfalfa hay. One pound of milk would purchase 2.46 pounds of dairy feed of that blend.
The All Milk Price averaged $22.00 per hundredweight (cwt.) with a 4.36% butterfat test, down $1.60 from February which had a 4.43 test, and compares to $20.60 in March 2024, with a 4.27% test.
The national corn price averaged $4.57 per bushel, down a penny from February, but 21 cents above a year ago. Soybeans averaged $10.20 per bushel, unchanged from February, but $1.60 below a year ago. Alfalfa hay averaged $167 per ton, up $8 from February, and $29 below a year ago.
Looking at the cow side of the ledger; the March average cull price for beef and dairy combined was at $140 per cwt., up $5 from February, $16 above March 2023, and $68.40 above the 2011 base average.
Quarterly milk cow replacements averaged $2,870 per head in April, up $210 from January, and $750 above April 2024. Cows averaged $2,700 per head in California, up $100 from January, and $800 above a year ago. Wisconsin’s average, at $3,130 per head, was up $270 from January, and $750 above 2024.
This week’s Crop Progress report shows U.S. corn planting at 24%, as of the week ending April 27, up from 12% the week before, 1% behind a year ago, and 2% ahead of the five year average. 5% was emerged, 1% behind a year ago.
Soybeans were at 15% planted, up from 11% the previous week, 1% ahead of a year ago, and 1% ahead of the five year average.
Preliminary data in the Agriculture Department’s latest Milk Production report shows March output at 19.8 billion pounds, up 0.9% from March 2024. The top 24 State production, at 19 billion pounds, was up 1.0%. February’s 24-State total was revised up 26 million pounds.
First quarter milk output was off 0.3% from a year ago, with cow numbers up 36,000 from fourth quarter 2024 and 58,000 more than first quarter 2024.
March cow numbers totaled 9.404 million, up 8,000 head from February and 57,000 more than a year ago. The February count was revised down 9,000 head. The 24-State count, at 8.964 million, was up 9,000 from February and 72,000 above a year ago. The February count was revised down by 8,000 head.
March output per cow in the 50 states averaged 2,111 pounds, up 6 pounds or 0.3% from a year ago, and up 4 pounds or 0.2% in the 24 States.
Milk fat and protein were both well above last year which put component adjusted production up 2.7% from last year, according to the StoneX Dairy Group.
California output in March was down 75 million pounds or 2.1% from a year ago, but smallest decline in six months. Cow numbers were up 1,000 and output per cow was up 45 pounds, as the Golden State continues to recover from bird flu.
The Daily Dairy Report says “The latest figures from the California Department of Food and Agriculture showed that nearly 80% of the state’s infected herds have been free of the virus for at least 30 days, and only eight herds faced new infections in the past month. But, the virus continued to take a toll in March.”
StoneX adds that new strains of bird flu have developed in Arizona and Nevada in first quarter but the USDA has not reported any spreading since.
Wisconsin eked out a 2 million pound increase in March, or 0.1% from a year ago, despite a loss of 5,000 cows. Output per cow was up 10 pounds.
Idaho showed a 62 million pound gain, or 4.3%, thanks to 29,000 more cows. Output per cow was unchanged.
Michigan was up 1.3% on 4,000 more cows and a 10 pound gain per cow.
Minnesota was off 0.1%, on a loss of 6,000 cows, though output per cow was up 25 pounds. New Mexico was up 1.5% on 2,000 additional cows and a 15 pound gain per cow. New York was up 1.3% on a 30 pound increase per cow. Cow numbers were unchanged.
Oregon was off 0.5% on a 10 pound drop per cow. Cow numbers were unchanged. Pennsylvania was unchanged, on a 5 pound gain per cow offsetting a loss of 1,000 cows.
Texas put an additional 134 million pounds or 9.4% in the tank in March, thanks to a whopping 45,000 more cows and a 50 pound gain per cow.
Washington State was down 4.3%, on a 15 pound drop per cow and 9,000 fewer cows. Evergreen State producers are battling costly retains in their milk checks which are likely resulting in some exiting the dairy business or moving elsewhere.
HighGround Dairy stated; “Income over Feed Costs using the Dairy Margin Coverage calculation set a record in Sept. 2024, followed by the second and third all-time in October and November, giving farmers a clear signal to make more milk. There is also new manufacturing capacity in the Plains states, also pushing producers in that region to increase milk output. The results of these events have pushed milk production to increase year-over-year for the full first quarter of 2025, after falling year over year for most of the 18 months ending Dec. 2024.”
Butter and cheese inventories grew seasonally in March. The latest Cold Storage report pegged March 31 butter stocks at 323.7 million pounds, up 18.1 million pounds or 5.9% from February, and up 12.6 million or 4.0% from March 2024. It was the second largest in 35 years, according to HighGround Dairy. February stocks were revised up 119,000 pounds from last month’s report.
American type cheese stocks jumped to 793.5 million pounds, up 13.2 million or 1.7% from February’s level, but were down 35.1 million pounds or 4.2% from a year ago. The February total was revised 2.6 million pounds lower.
The “other” cheese category holdings climbed to just under 575 million pounds, up 3.2 million or 0.6% from the February level, but down 28.7 million pounds or 4.7% from a year ago. February’s level was revised down 2.5 million pounds.
The total March cheese inventory hit 1.39 billion pounds, up 15.9 million pounds or 1.2% from January, but down 62.3 million or 4.3% from a year ago. The February total was revised down 5 million pounds. The report is pretty much viewed as neutral to the market.
Checking prices in Chicago, after the cheese plunged 13.50 cents the previous week, the Cheddar blocks closed May 2 at $1.76 per pound, up 6 cents on the week, but 3 cents below a year ago. The barrels saw their Friday, May 2, finish at $1.7550, 5 cents higher, and 12.50 cents below a year ago. Sales totaled 28 loads of block on the week and 132 for the month of April, down from 138 in March. Barrel sales totaled 12 for the week and 66 for April, up from 56 in March.
Central region cheese demand has been strong in recent weeks but contacts tell Dairy Market News that spot activity was somewhat muted this week. Spot loads were mixed, as cheesemakers said inventories are tight while others said they’re are becoming more available. Milk output is trending higher in the region and milk at mid-week was reported as low as $7-under Class. Milk is plentiful, says DMN.
Milk output has passed spring peak in the West but cheese manufacturers have enough available. Production varies from somewhat lighter to somewhat stronger. A few manufacturers note tight spot load availability regardless of what type of cheese is requested. Domestic demand varies from lighter to steady. Food service remains comparatively less robust than retail, while export demand is steady to strong. Sellers say U.S. prices remain competitive, according to DMN.
Spot butter fell to $2.24 per pound Tuesday, April 29, lowest CME price since Dec. 22, 2021, but it rallied and closed Friday, May 2, at $2.33, up 5 cents on the week, but still 74.50 cents below a year ago when it was trading at $3.0750. There were 20 CME sales on the week and 116 on the month, down from 164 in March.
Central butter makers are actively churning as cream remains plentiful, says DMN, but increasing seasonal demand from ice cream makers has drawn inventories down somewhat from early-spring. Cream multiples have increased slightly at the bottom of the range, but most are at or near flat market. Domestic butter sales are steady, meeting expectations. Spot loads are available and some are freezing product for use later in the year.
Seasonally strong milk production is beginning to tick down from the peak of spring for some parts of the West. However, butterfat component levels continue to be more than sufficient, helping to keep cream widely available. Butter manufacturers were keeping their churns busy. Inventories are generally growing despite strong export demand. Domestic demand is steady, but retail demand remains comparatively more robust than food service. Domestic prices remain competitive internationally despite trade policy changes that have taken place this year, according to DMN.
Grade A nonfat dry milk saw its close at $1.1950 per pound Friday, up 0.75 cents on the week, and 6.50 cents above a year ago. There were 22 sales on the week and 50 for the month, down three from March. The weak dollar has made U.S. exports more attractive.
Dry whey closed Friday at 52 cents per pound, up 1.50 cents and 12.50 cents above a year ago. There were five sales on the week and 33 for the month, up from 19 in March.
