
The Latest: July - 2025
Dairy Markets Have Lost That Summer Sizzle
The dairy markets have lost that summer sizzle. It’s still hot in the Northeast and in states along the West Coast. Milk production is much lower than it was during the spring flush, just as it always is in mid-July. Components have dropped. But in the center of the country, cows are enjoying cool nights and recovering from the sweltering conditions that prevailed a couple weeks ago. Milk yields are bouncing back in the Midwest.
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Last Friday, the spot Cheddar block market closed at $2.10/lb., the highest price in over two months. This week, however, the trajectory shifted dramatically. It appears that fundamentals may have caught up with the Cheddar market and ushered in the decline.
View reportDespite significant challenges, milk production continues to grow in the United States. USDA published its monthly Milk Production report on Monday, indicating that national output rose to 17.675 million pounds in February.
View reportThe official start of spring is right around the corner and milk volumes are responding accordingly. Output is steady to higher in most parts of the country as the spring flush rolls in.
View reportRapid expansion, slower pull from bottlers ahead of spring break, and unplanned plant shutdowns have all contributed to the excess in the Central region. Some plants are not running as hard as they might have in the past. But the less aggressive increase does have one upside; according to USDA, “cheese stores are not getting ahead of processors.”
View reportCull rates are high, and there is a long list of dairies for sale at the major auction houses. But it will take some time – perhaps six months or more – before this pain on the farm translates to less milk. For now, there is milk aplenty.
View reportRested up after a long weekend, the cheese markets came charging out of the gates but they gave it all back later in the week. Milk remains cheap in the cheese states which should result in higher cheese production. Weather issues, labor shortages, and mechanical problems have slowed cheese production all year, creating a chicken-and-egg conundrum.
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