DAIRY MARKET REPORT
4/18/2025
OVERVIEW
Rising milk production, together with the current climate of general economic uncertainty, is pressuring milk prices, although margins remain relatively high.
February fluid milk sales were 1.3% higher than a year earlier when adjusted for leap year, while revised January numbers from USDA show the national milk cow herd was 66,000 head larger than in January 2024. Preliminary February numbers showed an annual gain of 62,000 head and a leap year-adjusted 1% increase U.S. milk production.
The four monthly NDPSR dairy product survey prices, and consequently the Class III and Class IV prices, were all lower in March from a month earlier. The Consumer Price Index (CPI) for all items set a new record in March, as it usually does, but it was just 2.4% higher than a year earlier, indicating a relative cooling of overall retail price inflation by that common yardstick. The March CPIs for most of the key dairy products reported stayed measurably below the high levels they attained in recent years. The U.S. average all-milk price dropped by $0.50/cwt from January to $23.60/cwt in February, and the Dairy Margin Coverage margin dropped by $0.73/cwt, to $13.12/cwt.
Note: The tables below for commercial use, trade, and milk and dairy product production show actual quantities; only the percentage changes are adjusted for leap year.
COMMERCIAL USE OF DAIRY PRODUCTS
February’s fluid milk sales gains were complemented by yogurt and butter sales that continued to stand out for annual growth during December-February. There was
a relatively large difference in the annual growth rates of total domestic commercial use, when measured on a milkfat, as opposed to a skim solids basis.
COMMERCIAL USE
DOMESTIC COMMERCIAL USE
U.S. DAIRY TRADE
Total U.S. dairy exports were 0.9% higher in February than the month before, but the shorter month and consequent lower milk solids production boosted the percentage of milk solids production exported from 14.6% in January to 15.9% in February.
U.S. butter imports in February were essentially unchanged from February 2024, adjusted for leap year, following ten months of at least double-digit year-over-year growth, averaging 56%. On the other hand, February MPC imports were up over a year ago by 224% following 10 months with an average 36% annual increase.
DAIRY EXPORTS
U.S. DAIRY IMPORTS
MILK PRODUCTION
USDA’s reports for February revised its January national dairy cow and milk production numbers upwards. The revised January numbers show the national milk cow herd was 66,000 head larger than in January a year earlier, with the preliminary February numbers showing an annual gain of 62,000 head. Similarly, the department now shows
January U.S. milk production was up 0.5% from a year earlier, with Febuary production up by 1%, adjusted for leap year. Revised January milkfat production was up yearover-year by 3%, and February preliminary was up by 4%. February skim milk solids production was 1.8% higher, and total milk solids production was up by 2.5%.
DAIRY PRODUCTS
When adjusted for leap year, total U.S. cheese production increased by almost 1% over a year ago during DecemberFebruary, as growth in Italian types more than offset declines in all other types. Butter production also continued
to grow, and nonfat dry milk production stayed relatively constant, while skim milk powder and the major types of whey products were lower.
DAIRY PRODUCT INVENTORIES
Month-ending stocks of cheese, both American and other types, showed relatively modest upturns in February from a month or two earlier. However, butter stocks, which have particularly strong seasonal patterns, increased by 91 million pounds, or 43%, from last December to February. This twomonth increase was higher, although not egregiously so,
than the corresponding ones during the prior four years, likely reflecting rapid U.S. milkfat production growth (and therefore cream availability), relatively small export volumes and increased imports. Dry skim milk stocks are up for the month in February, but whey product stocks are basically steady from January.
DAIRY PRODUCT AND FEDERAL ORDER CLASS PRICES
All four monthly NDPSR dairy product survey prices were lower in March from a month earlier, for the second month in a row, and consequently took the corresponding Federal Order Class III and IV prices down with them.
The Consumer Price Index (CPI) for all items was 2.4% higher in March than a year earlier, indicating a relative
cooling of overall retail price inflation by that common yardstick. But, as it usually does, the index itself again set a new high level, as did the aggregate CPI for all food and beverages. By contrast, March CPIs for most of the key dairy products reported stayed measurably below the high levels they attained in recent years.
MILK AND FEED PRICES
The U.S. average all-milk price dropped $0.50/cwt from January to $23.60/cwt in February, while the Dairy Margin Coverage program feed cost formula rose by about half this much. The combination lowered the DMC margin by
$0.73/cwt, to $13.12/cwt. On a per cwt of milk basis, a rising corn price boosted the DMC feed cost by $0.31/cwt for the month, the soybean meal price was down by $0.09/cwt, and the premium alfalfa hay price was almost unchanged.
Prices (per cwt of milk)
*DMC calculations are not revised
LOOKING AHEAD
USDA’s World Agricultural Supply and Demand Estimates (WASDE) monthly reports have mostly lowered the department’s forecast of 2025 annual milk production in each successive report since it began those forecasts last May. But its April report reversed that trend with a 700 million pound boost from a month earlier, to 226.9 billion pounds, citing larger cow inventories and slightly higher milk per cow. The April WASDE forecast of total commercial use was basically unchanged from a month earlier, indicating the department was expecting the supply-demand balance to loosen more this year.
Consistent with this change, the April WASDE reduced its forecasts for the basic dairy product and federal order Class prices from a month before and lowered its 2025 average forecast for the U.S. all-milk price by $0.50/cwt to $21.10/cwt. As it does each year, WASDE will begin providing forecasts for the following year in next month’s report. As of mid-April, the DMC Decision Tool on the USDA Farm Service Agency website projected the 2025 average all-milk price at $22.02/cwt and that the monthly DMC margin would average $12.20/cwt during 2025, with a low of $10.91/cwt in April. This average margin forecast was down from $12.51/cwt two weeks earlier.
Dairy Management Inc.™ and state, regional, and international organizations work together to drive demand for dairy products on behalf of America’s dairy farmers, through the programs of the American Dairy Association®, the National Dairy Council ® , and the U.S. Dairy Export Council ®
Peter Vitaliano, National Milk Producers Federation pvitaliano@nmpf.org www.nmpf.org
The National Milk Producers Federation (NMPF) develops and carries out policies that advance dairy producers and the cooperatives they own. NMPF’s member cooperatives produce more than two-thirds of U.S. milk, making NMPF dairy’s voice on Capitol Hill and with government agencies.