The Agriculture Department again lowered its milk production forecast from last month in its latest World Agricultural Supply and Demand Estimates report, citing lower expected cow inventories. Milk supply and use estimates for 2024 were adjusted to reflect December domestic and trade data.

2024 production and marketings were projected at 225.9 and 224.9 billion pounds respectively, up 100 million pounds on both from last month’s estimate. If realized, both would be down 500 million pounds or 0.2 percent from 2023.

2025 production and marketings were projected at 226.9 and 225.9 billion pounds respectively, down 300 million on both from a month ago. If realized, both would be up 1 billion pounds or 0.4 percent from 2024.

Milk and dairy product price forecasts reflected updated price formulas of the Federal Milk Marketing Order, as published in the Federal Register on Jan. 17 by the Agricultural Marketing Service. Butter, nonfat dry milk, and whey prices were lowered based on recent prices. The cheese price was raised on recent prices and tight inventories from 2024 that are expected to carry into 2025.

Cheese was projected to average $1.88 per pound in 2025, up 1.50 cents from last month’s estimate, and compares to $1.8634 in 2024 and $1.7593 in 2023. Butter was projected at $2.6450 per pound, down a nickel from a month ago, and compares to a $2.8870 average in 2024 and $2.6170 in 2023.

Nonfat dry milk was projected with a $1.2950 average, down 4.50 cents from last month’s estimate, and compares to $1.2420 in 2024 and $1.1856 in 2023. Dry whey is expected to average 60.50 cents per pound in 2025, down 3.5 cents from last month’s estimate, and compares to a 49.13 cent average in 2024 and 36.18 cents per pound in 2023.

Class III and Class IV milk prices for 2025 were lowered. Look for the Class III to average $19.10 per hundredweight in 2025, down 60 cents from last month’s projection, and compares to $18.89 in 2024 and $17.02 in 2023. The Class IV price is expected to average $19.70, down $1.10 from last month’s estimate, and compares to $20.75 in 2024 and $19.12 in 2023.

This month’s corn outlook was unchanged. The projected season-average farm price was raised 10 cents to $4.35 per bushel. This month’s outlook is for reduced production, trade, and ending stocks. Foreign corn production was forecast down with declines for Argentina and Brazil.

Soybean supply and use projections were also unchanged. The season-average soybean price was projected at $10.10 per bushel, down 10 cents from last month. Soybean meal and oil prices were unchanged at $310 per short ton and 43 cents per pound, respectively. Global soybean supply and use forecasts include lower production, higher use, and lower ending stocks.

Production was reduced for Argentina and Paraguay due to persistent heat and dryness in January. Brazilian soybean production was unchanged at 169.0 million tons. Beneficial weather in the Center-West is boosting soybean prospects, but drier weather in the south accelerated soybean development at the expense of yields, according to the WASDE.

Cash dairy prices in Chicago were a bit skittish with the “T” word (tariffs) being bandied about again the week leading up to Valentine’s Day. The Cheddar blocks were trading Thursday morning at $1.92 per pound, after closing Friday at $1.86. The barrels were at $1.83, following their Friday finish at $1.78.

StoneX stated in its Feb. 12 Early Morning Update: “It’s important to remember that the 10-year spot block price average in February is $1.7020. $1.90 block cheese today is appropriately reflective of a tighter-than-normal cheese market.”

Midwest cheesemakers reported mixed demand, according to Dairy Market News. Some Italian style cheesemakers, particularly hard Italian styles, said sales are strong. Cheddar makers say demand varies plant to plant, with some being oversold. Milk availability also varies from one area to the next. Plant downtime continues to play a role in affecting milk prices. Some cheesemakers had a lot of offers this week, while others said milk was short and they were looking for more but having no luck.

Demand for Class III milk from western cheese manufacturers is generally at-or-above expectations, says DMN. Class I milk demand is seasonally strong, and bottlers were pulling heavily on milk volumes as well as cheese manufacturers. Cheese production was steady to stronger.

Results of this year’s Super Bowl were a win-win for the dairy industry as well as for the Eagles. The Daily Dairy Report pointed out that National Pizza Day fell on the same day, which is the biggest pizza-eating day of the year.

The DDR stated: “The Washington Post notes that Americans eat 3 billion pizzas annually, the equivalent of 46 slices per person. Assuming a 14-inch pizza is topped with 9 ounces of cheese, consumers eat nearly 1.7 billion pounds of cheese on pizzas each year, or about 35 percent of U.S. mozzarella production.”

The DDR adds that the play-offs and Super Bowl may have been part of the reason USDA’s December Dairy Products report showed record high Mozzarella production. Americans love cheese and that’s great news for U.S. dairy farmers.

Fluid milk sales headed back up in December, after falling 1.5 percent in November, and 2024 sales topped the 2023 level, ending decades of decline.  Consumers do not appear to be overly concerned about bird flu and may in fact be turning away from plant-based beverages and returning to natural cow’s milk, particularly organic product. Confirmation continues to mount on the health benefits of milk.

Tariffs were back in the news after President Donald Trump postponed them on Canada and Mexico. China was hit with 10 percent tariffs, though items $800 and less were paused, according to HighGround Dairy. China in turn imposed a 15 percent tariff on U.S. coal and liquefied natural gas and 10 percent on crude oil, agricultural machinery, and large-engine vehicles. Trump also announced new tariffs of 25 percent on all imports of steel and aluminum.

Tariffs and bird flu were two main topics at this week’s World Ag Expo in Tulare, Calif., according to HighGround’s Curtis Bosma in the Feb. 17 “Dairy Radio Now” broadcast. Expo is the world’s biggest farm equipment show and covers just about every aspect of agriculture, he said. Tulare has a population of about 60,000 people and Expo draws about 100,000 per day, according to Bosma.

Dairy farmers there had a lot of optimism coming out of 2024 with higher milk prices and lower feed costs, which resulted in a better margin opportunity, he said. Bird flu has certainly taken a toll on the state especially, but dairy revenue protection payouts and USDA assistance have farmers in “a pretty good spot.”

The tariffs came up a lot in conversations, according to Bosma. “We’re going to see a much different tone when it comes to foreign relations and how this administration navigates these things,” he said. “With that comes some enhanced volatility in the commodity markets, so it’s a good time to be talking to folks like us because these are the times when things get a little crazy, but we have some opportunities to mitigate some of that risk,” he concluded.