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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CME 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.
View reportConcerns about demand have been simmering near the surface for several months. This week, rising interest rates and a plummeting stock market brought the anxiety up to a full boil.
View reportThe butter market illustrates the conundrum that besets much of the dairy complex. Stocks are relatively low and production is falling seasonally. Milk and butter output are not rising anywhere that matters. U.S. butter is much cheaper than foreign product, so trade is further eroding supplies.
View reportIn Europe the high costs of physical expansions, additional labor, replacement heifers, and feed costs, when coupled with market uncertainty, creates a risk level that prevents widespread expansion. The same factors are hampering milk output on this side of the Atlantic as well.
View reportIt’s unusual to see premiums at this time of year, and it’s raising concerns about summer supplies. If driers and cheese vats aren’t full to the brim amid mild May temperatures, how much will output slow in the July and August heat?
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