Milk price continues to move higher

The “Mielke” Market Weekly

The U.S. Department of Agriculture announced the April Federal Order Class III milk price Wednesday at $16.82 per hundredweight, up 66 cents from March but 66 cents below April 2025. It is the highest Class III price since November 2025. The 4-month average stands at $15.63, down from $19.16 a year ago, and it compares to $15.77 in 2024.

Late Friday morning’s Class III futures portended a May price at $17.10; June, $17.36; July, $18.02; and August, $18.48; with a peak in October at $18.80.

The April Class IV price is $20.22, up $1.28 from March, $2.30 above a year ago and the highest Class IV price since January 2025. Its 4-month average stands at $17.25, down from $19.19 a year ago, and it compares to $19.86 in 2024.

U.S. butter stocks shot higher in March as they did in February but were still well below those a year ago. The agriculture department’s latest cold storage report pegged the March inventory at 288.8 million pounds, up a whopping 32.6 million pounds or 12.7% from February, but it was still 34.4 million pounds or 10.6% below March 2025. February’s total was revised up 2.5 million pounds from last month.

American-type cheese stocks grew to 801.6 million pounds, up 10.7 million or 1.4% from the February level, which was revised up 6.0 million pounds, but they were down 21 million or 2.5% from a year ago.

The “other” cheese holdings totaled just under 575 million pounds, up 2.7 million or 0.5% from February, but they were down 3.4 million pounds or 0.6% below a year ago. The February total was revised down 5.7 million pounds.

The March cheese inventory totaled 1.4 billion pounds, up 13.5 million or 1.0% from February, the lowest level for the month since 2020, according to HighGround Dairy, and 23.3 million pounds or 1.6% below a year ago.

Checking the rearview mirror, the USDA’s dairy products summary reported cheese production totaled 14.8 billion pounds in 2025, up 4.0% from 2024. Wisconsin remained the No. 1 producer with 24.6% of the total.

Italian cheese totaled 6.3 billion pounds, up 5.1% from 2024, and accounted for 42.8% of the cheese produced in 2025. Mozzarella accounted for 79.1% of the Italian total, followed by Parmesan with 8.3% and provolone at 6.2%. Wisconsin, again, was the leading producer of Italian cheese, with a 28.4% share.

American-type cheese totaled 5.8 billion pounds, 4.6% above the 2024 total, and it accounted for 39.4% of all cheese produced in 2025. Wisconsin led the nation at 18.2% of the production.

Butter churns produced 2.39 billion pounds, up 6.7% from 2024. California was the No. 1 butter producer with 28.4% of the total.

Nonfat dry milk output amounted to 1.66 billion pounds, up slightly from 2024, and skim milk powder totaled 504 million, down 15.9%. Dry whey output totaled 845 million pounds, down 1.0% from 2024.

Chicago Mercantile Exchange block cheddar closed Friday, May 1, at $1.64 per pound, down a half-cent on the week, a quarter-cent above its April 1 print and 12 cents below a year ago. The barrels finished at $1.6150, unchanged on the week, 2.25 cents above where they were on April 1 and 14 cents below a year ago.

Sales for the week totaled 11 loads of block and 90 for April, up from 75 in March. There were no sales of barrel on the week and only one for April, down from three in March.

Milk production is steady in the Central region, reports Dairy Market News, and is above a year ago. Spot trades were light this week. Some cheesemakers received fewer offers, while others said volumes were available, but they were using milk from within their network and not purchasing additional loads. Mid-week spot prices ranged from $3 under to flat. Cheesemakers were running busy schedules. Demand for cheese barrels is strong, and block demand was steady to stronger. Retail purchasers are steadily securing cheese, but contacts said food service demand is lackluster. Export demand is also strong.

Milk and cream output in the West is accommodating cheesemakers; however, spot milk availability varies throughout the region. Demand from cheesemakers is moderate. Cheese production was steady and continued to be active seven days a week. Cream cheese production also remains very active. Retail cheese demand is stable. Manufacturers note demand from food producers incorporating cheese as part of their product is a bright spot so far this year. Industry sources describe export demand as strong, according to DMN.

Cash butter fell to $1.5950 per pound Friday, the lowest CME price since Feb. 3, and 11 cents lower on the week, 15.75 cents below its April 1 level, and 73.50 cents below a year ago. Sales totaled 92 loads for the week and 341 in April, down from 377 in March.

Cream output is strong in the Central region, and Class II and Class III processors are buying significant volumes, says DMN, keeping spot cream volumes balanced to somewhat snug. Spot cream demand is light from butter makers.

Butter makers were running busy schedules. Domestic demand for butter is steady week to week, but some stakeholders report lighter food service demand than expected this time of year. Export butter demand is unchanged, said DMN.

Looking westward, Class II dairy product manufacturing is strong as milk and cream production are providing sufficient volumes for butter makers in the region. Demand for spot loads is moderate from butter makers, with seasonally higher second-quarter prices for cream. Butter production varies from steady to strong. Domestic demand is steady. U.S. butter prices continue to be an attraction for international buyers, despite some logistical challenges, said DMN.

Grade A nonfat dry milk soared to a record high $2.2650 per pound Tuesday but saw its first retreat Wednesday in 16 sessions, inching back 0.75 cents, and fell to $2.25 Thursday but closed Friday at $2.2625, up a quarter-cent on the week and $1.0675 above a year ago. There were 19 CME sales on the week and 48 for April, down from 147 in March.

Dry whey saw its Friday finish at 69.75 cents per pound, unchanged on the week, a penny higher than April 1, and 17.75 cents above a year ago. There were three sales on the week and 10 for the month, up from seven in March.

An increase in the all-milk price was tempered by increased feed prices however the March feed price ratio moved higher for a second month. The USDA’s latest ag prices report had March at 2.25, up from 2.17 in February, but it compares to 2.45 in March 2025.

The all-milk price was $19.70 per cwt., with a 4.39% butterfat test, up $1.40 from February’s $18.30 on a 4.46% test. That compares to $22.00 per cwt. a year ago, which had a 4.36% test.

The national corn price averaged $4.27 per bushel, up 16 cents from February but still 30 cents below March 2025. Soybeans averaged $11.10 per bushel, up 50 cents from February and 90 cents per bushel above a year ago. Alfalfa hay averaged $166 per ton, up $7 from February but $2 below a year ago.

The March cull price for beef and dairy combined averaged $164 per cwt., up $2 from February, $24 above March 2025 and $92.40 above the 2011 base.

Quarterly milk cow replacements averaged $3,130 per head in April, up $150.00 from January and $270 above April 2025. Cows averaged $3,000 per head in California, up $200 from January and $300 above a year ago. Wisconsin’s average, at $3,320 per head, was up $150 from January, and $190 above April 2025.

Milk production margins increased for the second straight month by gaining $1.05 per cwt. and were above $10.00 per cwt. for the first time in 2026 at $10.93. That’s according to dairy economist Bill Brooks of Stoneheart Consulting in Dearborn, Missouri.

“Income over feed costs in March were above the $8 per cwt. level needed for steady to higher milk production for the 29th month in a row,” says Brooks. “Input prices were higher in March, with one of the three input commodities inside the top 10 for March all-time. Feed costs were the sixth highest ever for the month of March and increased 35 cents per cwt. from February. The March all-milk price was inside the top 10 for the month, at the seventh highest ever recorded for the month.”

Brooks said, “Dairy producer profitability for 2024 in the form of milk income over feed costs was $13.40 per cwt. Profitability was $5.40 above 2023 and $3.74 higher than the 2019-23 average. The 2024 increase in milk income over feed costs was a result of the milk price increasing while feed prices dropped. Income over feed cost was above the level needed to maintain or grow milk production.

“Milk income over feed costs in 2025 were $12.44 per cwt.,” said Brooks. “Income over feed costs would be above the level needed to maintain or grow milk production and down 96 cents per cwt. from 2024’s level and $2.17 higher than the 2020-24 average.”

Milk income over feed costs for 2026 (using April 30 CME settling futures prices for Class III milk, corn and soybeans plus the Stoneheart forecast for alfalfa hay) are expected to be $11.91 per cwt., a loss of 53 cents per cwt. versus 2025. Income over feed costs would be above the level needed to maintain or grow milk production and up 42 cents versus the previous estimate, Brooks said.

The USDA’s latest crop progress report showed 25% of U.S. corn was in the ground, as of the week ending April 26, up from 11% the previous week, 3% ahead of a year ago and 6% ahead of the 5-year average. Seven percent was emerged, 2% ahead of a year ago. Soybean plantings were at 23%, up from 12% the previous week, 6% ahead of a year ago and 11% ahead of the 5-year average. Eight percent was emerged, 6% ahead of a year ago.

Culling continues to lead the year-ago numbers. USDA data shows 48,500 dairy cows sent to slaughter the week ending April 18, up 3,100 or 6.8% from a year ago. Year to date, 886,300 had been culled, up 50,700 or 6.1% from a year ago.

This week’s Global Dairy Trade Pulse saw 6.1 million pounds of product sold, down from 6.3 million April 14. Prices were lower on anhydrous milkfat and butter but slightly higher on skim milk and whole milk powder.

In politics, the House passed its farm bill, 224 to 200. The National Milk Producers Federation said the bill supports the farm safety net, preserves existing conservation programs that include opportunities for dairy and livestock producers and bolsters trade promotion programs.

”The bill also protects common food names, recognizes the important role of dairy in nutrition and supports animal health programs, all important priorities to dairy farmers and the broader industry,” said NMPF. The Federation said it looked forward to the Senate taking up the bill, adding, “At a time where farmers face unprecedented challenges, Congress needs to provide the stability of a five-year, comprehensive farm bill.”

The Wisconsin-based American Dairy Coalition quoted Ag Committee Chairman Glenn Thompson, who said, “After 163 listening sessions across 43 states and one U.S. territory, this farm bill was not written in Washington. It was written in barnyards and pastures and machine sheds across America.”

Michael Dykes, president and CEO of the International Dairy Foods Association, said, “House passage of the 2026 farm bill is a significant achievement that builds momentum towards enacting a new, much-needed 5-year farm bill.”

Meanwhile, the ADC also called into question a proposal by Dairy Management Inc. and its Innovation Center for U.S. Dairy, said, “As USDA weighs expanding farm-level data collection tied to greenhouse gas modeling, dairy farmers are raising a more fundamental question: Are the underlying metrics and the data system itself getting it right?”

In public comments filed with USDA, the ADC warned that data expansion proposed by the checkoff organizations, tied to sustainability and net zero initiatives, is premature and that existing USDA datasets show growing gaps directly impacting dairy farm economics.

ADC said, “Data collection systems are being built on methane assumptions that remain unsettled, pointing to the central role methane accounting now plays in shaping data requests. Current GHG modeling commonly treats enteric methane from cattle as a new, long-lived, accumulating gas, while a growing body of scientific discussion recognizes methane’s short-lived nature and the recycling role of cattle. The coalition argues that how methane is measured ultimately determines how dairy is valued, regulated and positioned in the marketplace — raising concerns about building expanded data systems on metrics that overstate the warming impact of stable cattle herds as cattle recycle natural, existing carbon over time.”

Last but not least, chocolate has reclaimed its place as America’s favorite ice cream flavor, according to the International Dairy Foods Association’s biannual National Ice Cream & Frozen Novelty Trends Survey. Vanilla took the top spot in 2024, but this year’s results show chocolate is back at No. 1, with butter pecan also rising ahead of vanilla among U.S. consumers, said IDFA.