Class III milk futures continue to struggle to gain price traction. While nearby December 2025 is trading in the mid $16 level, January and February Class III contracts have sunk to the low $16 value.
What’s happened
The culprit for low values? Continued high U.S. milk production. The USDA released the September milk production report this week (delayed due to the government shutdown), which showed a staggering 4% year-over-year growth in production!
From a marketing perspective
Looking at the specifics of the report, United States milk production in September totaled 18.990 billion pounds, up 4% from the same month last year. The higher production came from a combination of more cows being milked, and each cow providing higher milk production.
Milk production per cow averaged 1,982 pounds, which was up 30 pounds per cow from September 2024. Total milk cows on farms in the U.S. came in at 9.581 million head, up 228,000 head, year over year, (and up 40,000 head from the month prior). To put things in perspective, the U.S. added 42,000 dairy cows from July to August and added another 40,000 dairy cows from August to September. With 228,000 extra head milking this year versus last year, production is, of course, going to be higher.
Prepare yourself
With the government shut down, it has been difficult to monitor demand with the absence of the Cold Storage report which sheds light on cheese and butter supplies. Unfortunately, the combination of large increases in both milk production and the U.S. dairy herd, will likely keep milk futures on the defensive – at least for now.
Reach Naomi Blohm at 800-334-9779, on X: @naomiblohm, and at naomi@totalfarmmarketing.com.
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