Base Milk Price Forecast: January

Today, USDA published the final rule related to the recent Federal Order Modernization efforts.  The amended Orders were approved in ALL eleven marketing orders and is already published on the federal register for public display.  It will be officially published tomorrow, and it is identical to the final rule on the AMS website.  The effective date is June 1, 2025, except Milk Composition that will be effective December 1, 2025.   For more information on the changes included, take a few minutes to review the FMMO Final Decision explainer available at this link.

I'm also pleased to share that Alexandria Coombe has joined the UNC team as the Dairy Markets & Policy Analyst and will be helping with the review of dairy market statistics and providing forecasting assistance. She prepared these highlights for your use:

• According to the Ever.Ag indicated that USDA's Cold Storage report released on December 23, 2024, leaned bullish as November Butter stocks were up 0.4% year-over-year (YOY), but down 54.2 million pounds month-over-month.
• November Total Cheese Stocks were down 13 million pounds from October and up 7.2% YOY. 
• U.S cheese prices averaged $1.90/lb for the week ending January 10th. This is a 26% increase over the same week last year.
• The Milk Production report released on December 19, 2024, reported November milk production in California was down 9.2% YOY due to the HPAI breakout. USDA reported that U.S. milk production fell 1% year-over-year; however, removing California from the equation shows that the remaining states reported an increase of 0.8% year-over-year for U.S milk production.
• The Northeast milk production was up 1% year-over-year, with New York producing 1.3 pounds in November, up 1.2% YOY.
• For the week ending January 10th, CME Prices averaged per pound:
   
  • Blocks       $1.89
   
  • Barrels     $1.86
   
  • Butter      $2.59
   
  • NDM       $1.37
   
  • Dry Whey  $0.74
   
  • All of these prices were similar to or higher than weekly average prices for the week ending 12/20/24

If you have any questions, please do not hesitate to reach out.