Base Milk Price Forecast: February 10, 2025
As a reminder, USDA issued the final rule on Federal Orders. This included an implementation timeline for changes to Federal Orders, with most amendments effective June 1, 2025, and the milk composition amendment effective December 1, 2025. These amendments can be viewed at the link below.
A few highlights for this time out:
- The Cold Storage report revealed that U.S. butter stocks reached 222.4 million pounds, up 11.4% year-over-year(YOY) in December, and increased 9 million lbs. month-over-month(MOM). This may indicate a rebound toward the five-year average.
- U.S cheese stocks totaled 1.35 billion pounds in December, up 1.7% MOM.
- The U.S. cheese market remains volatile, with domestic cheese prices surpassing international levels, making U.S. products less competitive globally. Despite this, U.S. cheese exports saw slight growth in 2024.
- Butter prices have declined since December with weekly averages of (Jan 24) $2.52/lb., (Jan 31) $2.47/lb., and (Feb 7) $2.41lb.
- The average weekly cheese prices for the week ending January 31, 2024, showed blocks at $1.90/lb. and barrels at $1.85/lb. The weekly averages for the following week are (Feb 7) $1.87/lb., and $1.80/lb.
- According to the milk production report, the U.S. saw a slight YOY decline in December, down 0.46% to 18.75 billion pounds. This can be attributed to the HPAI issues in California and an 8.2% decline in milk production in Oregon.
- The Northeast milk production was up 0.3% YOY in December.
An important note on the forecasted producer pay price beyond June 20205: PPDs included in the forecast are calculated utilizing assumptions based off of current producer and handler adjustments in FO1. Due to changes in Class I Differentials, this will change and may meaningfully impact the PPD forecast going forward. Once USDA provides updated data, we will begin reflecting the PPD more accurately.
If you have any questions, please reach out to me or Alexandria.
