Total U.S. dairy exports have steadily increased over the past three months. First quarter U.S. milk production rose 0.8% from a year earlier, due mostly to increased cow numbers; milk solids production grew by 2.1% over the same period.
Mostly lower dairy product prices in April produced a drop in Class II and Class IV prices from both last month and a year ago. April Class III prices were down from a month ago up but well above a year earlier. The DMC Decision Tool is estimating that the DMC margin has already reached its lowest level for the year, $10.43/cwt, in April.
After gaining 1.3% on a leap year-adjusted basis in February, March fluid milk sales were down from last year by 1.5%, dropping first quarter fluid sales by 0.3% over Q1 2024. Yogurt and butter continue to provide bright spots in domestic commercial use, while cheese, specifically American-type cheese, has newly joined this company during the first quarter. Strong leap year-adjusted growth in its skim milk solids equivalent kept growth in overall domestic milk solids use positive in the face of weaker growth in its milkfat equivalent during the quarter.
Total U.S. dairy exports have steadily increased over the past three months, as they typically do during the first quarter. Almost 95% of the increase in their milk solids equivalent was contributed by just five products, skim milk powder/nonfat dry milk, lactose, whey protein concentrate, dry whey and butter. U.S. butter exports have been modest over the past decade, averaging just 3.1% of production, as increased demand for dietary fats has consumed most domestic production during that period. However, recent rapid increases in U.S. producer milkfat composition have generated more exportable butter while domestic prices have been very competitive on world markets of late. Exports amounted to 5.4% of U.S. butter production during the first quarter this year.
U.S. dairy imports have receded from a recent high, equivalent to 4.4% of domestic milk solids production last November, to 3.6% in March. Over three quarters of the milk solids equivalent of U.S. dairy imports during the first quarter consisted of milk and whey protein concentrates and isolates, casein, butter and other dairy fat products, cheese and whole milk powder.
USDA reports that the nation’s dairy cow herd showed relatively stable growth during the first quarter of 2025, rising over a year earler by 65,000, 53,000, and 57,000 cows, respectively, during January, February and March. Adjusted for leap year, production per cow was just slightly north of flat during the quarter, which boosted total milk production just slightly faster than growth of the national herd, on a percentage basis. Skim milk solids production grew almost twice as fast as liquid milk production during the first quarter, while milkfat production grew over four times faster.
