Producer Pay Forecast: May 22, 2025
June is approaching quickly and the first advanced prices under new FMMO rules have been released for pricing effective on the June 1, 2025 implementation date. As a reminder, under the new FMMO rule we are returning to the higher-of Class I mover, make allowances and butterfat recovery factors have been increased, 500-lb barrels have been dropped from the surveyed commodities, a new Class I Extended Shelf-Life adjuster (ESL) has been added, and a new Class I differential map is being implemented. The changes to skim milk composition factors will take effect December 1, 2025.
I am excited to attach here our first price estimates under the new federal order rules. You will notice that Class III and Class IV prices have ticked up. This is due, in part, to the elimination of barrels, and high export demand. Presently, soft domestic and food-service demand is being offset by high export demand for U.S butter and cheese. Pull-back in exports could result in a steep shift in markets if domestic demand does not pick up.
The USDA milk production report for April was released yesterday. U.S milk production is up 0.2% YTD and increased 1.5% YOY in April. Of the top five milk producing states in the U.S, only three have seen a YTD increase in milk production. Texas leads the charts, up 7.24%, followed by Idaho at 4.98%. New York milk production is up 1.09% YTD and milk per cow is up 1.07% YTD.
If you have any questions or concerns regarding the federal order changes or the forecast, please feel free to reach out to Allee at acoombe@uncdairy.com.
