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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Concerns about worsening demand are colliding with rising supplies as milk floods the market.
View reportAll eyes were on the CME spot Cheddar markets this week as blocks, and especially barrels, moved decisively lower. Spot barrel prices plunged in recent days and Cheddar spot blocks also moved below $2 for the first time since early September.
View reportCME spot Cheddar barrels climbed to an all-time high last Friday and managed to cling to the precipice on Monday. Then their perch gave way and they plunged over the cliff.
View reportTrading volumes were light, but that led to a sense of foreboding. The rally is real, but how long can it last? The futures curve reflects traders’ fears that the market cannot sustain these prices into next year.
View reportThe combination of more milk and more cows stopped the bulls in their tracks, and made for a lot of red ink on LaSalle Street through mid-week.
View reportThe bulk of the government buying is supposed to end soon, but, judging by the sudden rally on Thursday, the trade may expect another round of aid for dairy purchases.
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