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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After the enthusiasm ignited by last week’s USDA announcement, most commodities struggled to keep the momentum going. The butter and cheese markets both finished the week on a softer note while dry products, especially whey, fared somewhat better.
View reportMonday’s announcement that the USDA is extending its Farmers to Families Food Box Program spurred dairy commodity prices upward, with all products seeing gains during Tuesday’s spot session.
View reportThere is no word yet on when USDA will begin spending its allocations, which makes it difficult to assess the repercussions for the dairy markets. The dairy funding could make a big splash if it is spent in a short time, or slowly ripple through the markets if spent steadily throughout the next year.
View reportA setback is possible, but it’s impossible to predict the timing or magnitude of a retreat from the highs. Seasoned traders warn “Don’t fight the trend.”
View reportFebruary through December contracts posted life-of-contract highs, a sign of health and good cheer.
View reportThere is plenty of fodder for both the bulls and the bears, creating a rather schizophrenic trading market. We’re in a full-blown weather market, and the futures will be as fickle as the forecast.
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