Rising milk production, together with the current climate of general economic uncertainty, is pressuring milk prices, although margins remain relatively high.
February fluid milk sales were 1.3% higher than a year earlier when adjusted for leap year, while revised January numbers from USDA show the national milk cow herd was 66,000 head larger than in January 2024. Preliminary February numbers showed an annual gain of 62,000 head and a leap year-adjusted 1% increase U.S. milk production.
The four monthly NDPSR dairy product survey prices, and consequently the Class III and Class IV prices, were all lower in March from a month earlier. The Consumer Price Index (CPI) for all items set a new record in March, as it usually does, but it was just 2.4% higher than a year earlier, indicating a relative cooling of overall retail price inflation by that common yardstick. The March CPIs for most of the key dairy products reported stayed measurably below the high levels they attained in recent years. The U.S. average all-milk price dropped by $0.50/cwt from January to $23.60/cwt in February, and the Dairy Margin Coverage margin dropped by $0.73/cwt, to $13.12/cwt.
