The Latest: June - 2025
Milk Flows Again as Herds Grow
The heifer shortage and avian influenza reined in U.S. milk output in 2024, fostering lofty milk and dairy product prices in the second half of last year. But after nearly two years of low cull rates and sheer grit, the parlors are full, and so are the milk tanks. In the first 24 weeks of 2025, dairy cow slaughter was 7.7% behind the 2024 pace and 15.6% slower than historic average cull rates. Dairy producers added 122,000 cows over the past 11 months. From coast to coast, but especially in the center of the country, producers are looking to expand their facilities and add significantly more cows over the next 18 months.
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The bulls and bears squared off in Chicago this week, and the dairy markets lurched this way and that as the two sides fought for control. By Wednesday and Thursday, the bears won the upper hand, fueled by news that the U.S. economy contracted in the first half of the year, and that the Federal Reserve hoped to tamp down inflation by raising interest rates yet again.
View reportAfter seven months in the red, U.S. milk production exceeded year-ago volumes in June, topping June 2021 by 0.2%.
View reportU.S. inflation accelerated to 9.1% last month, reducing Americans’ purchasing power at the fastest rate since 1981. The dairy markets suffered too.
View reportPrices for dairy commodities moved lower both at home and abroad as the markets sort through supply and demand dynamics. Concerns about economic cooling, inflation, and the resulting impact on dairy demand seems to have been sufficient to push back on pricing.
View reportCME spot butter leapt 9.5ȼ to $3.01 per pound. That’s the highest spot butter price since 2015. The other spot products also climbed, however milk futures struggled.
View reportRed ink flowed on LaSalle Street this week as the trade reckoned with the fact that, although milk production continues to shrink, cheese abounds. Ongoing concerns about demand also pressured the markets.
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