The April Federal order benchmark Class III milk price was announced by the USDA at $17.48 per hundredweight, down $1.14 from March, but $1.98 above April 2024, though it’s the lowest Class III price since April 2024. The four-month Class III average is $19.16, up from $15.77 a year ago, and $18.46 in 2023.

Wednesday’s Class III futures settlements portended a May price at $18.37; June, $17.37; and July at $17.77; with a peak of $18.38 in October.

The Class IV price was $17.92, down 29 cents from March, $2.19 below a year ago, and the lowest since Oct. 2021. Its average stands at $19.19, down from $19.86 a year ago, and compares to $18.80 in 2023.

Another drop in the All Milk Price and a rise in alfalfa hay pulled the milk feed price lower again. The USDA’s latest Ag Prices report shows the March ratio at 2.46, down from 2.68 in February, and compares to 2.15 in March 2024.

The index is based on the current milk price in relationship to feed prices for a ration consisting of 51 percent corn, 8 percent soybeans and 41 percent alfalfa hay. One pound of milk would purchase 2.46 pounds of dairy feed of that blend.

The All Milk Price averaged $22.00 per cwt. with a 4.36 percent butterfat test, down $1.60 from February which had a 4.43 test, and compares to $20.60 in March 2024, with a 4.27 percent test.

The national corn price averaged $4.57 per bushel, down a penny from February, but 21 cents above a year ago. Soybeans averaged $10.20 per bushel, unchanged from February, but $1.60 below a year ago. Alfalfa hay averaged $167 per ton, up $8 from February, and $29 below a year ago.

Looking at the cow side of the ledger, the March average cull price for beef and dairy combined was at $140 per cwt., up $5 from February, $16 above March 2023, and $68.40 above the 2011 base average.

Quarterly milk cow replacements averaged $2,870 per head in April, up $210 from January, and $750 above April 2024. Cows averaged $2,700 per head in California, up $100 from January, and $800 above a year ago. Wisconsin’s average, at $3,130 per head, was up $270 from January, and $750 above 2024.

Cash dairy prices started May looking for direction as the dairy industry gathered for the American Dairy Products Institute annual conference. Speaking in the Dairy Radio Now broadcast May 5, HighGround Dairy’s Curtis Bosma said the eyes of attendees are on domestic demand, which for the past year or so has been weakened, particularly in food service.

The “silver lining” is the discount that U.S. cheese and butter prices are to world levels. He said there was a lot of chatter about export opportunities, although there are complications, with respect to what types of cheese and what types of butter the U.S. produces. In the end, however, the most important factor is price, he said. “If we’re cheap enough, those deals will always find a way to come together.”

When asked how big an impact the tariff tit for tat was having, Bosma said, “As we stand here today, with countries that we do have tariffs with and where the tensions are, the only region or country that is somewhat problematic is China.”

He said there has been a lot of front-loading trading activity going on in first quarter, and not just in dairy. If you look at the U.S. first quarter gross domestic product (GDP) data, you see that it posted its first negative year-to-year growth in a couple years.

He adds that a lot of that fall, considering how GDP is calculated, was due to “the net importer-export factor that’s in there. With all these looming tariff threats, it’s pretty safe to assume that most companies or businesses that rely on goods or materials from overseas are bringing in things or restocking things as quickly as possible to make sure they weather any storms that may arise later this year.”

Meanwhile, CoBank says, “U.S. food and agricultural exports to Mexico have surged 65 percent over the past four years, making it the fastest growing export market for a host of American agricultural commodities and products. Mexico’s growth as a destination for U.S. exports has been spurred by the country’s booming post COVID-19 economy and a rapidly growing manufacturing sector.

“The economic upswing has allowed Mexican consumers to expand their traditional diet, and U.S. food and agricultural producers are helping meet the country’s growing demand for meat, poultry, dairy, processed foods and feed grains. In 2024, U.S. food and ag exports to Mexico climbed to $31.4 billion, slightly below Canada, the top market at $32.4 billion.”

A new research brief from CoBank’s Knowledge Exchange says, “Mexico will likely surpass Canada to claim the top spot for the first time in 2025 despite some emerging headwinds.”

Checking prices: the Cheddar blocks in Chicago were trading at $1.7550 per pound Thursday morning, following their previous Friday closing at $1.70. The barrels had slipped to $1.70 Wednesday but closed Thursday at $1.7350, after finishing Friday at $1.7050.

Central region cheese demand has been strong in recent weeks, but contacts tell Dairy Market News that spot activity was somewhat muted this week. Spot loads were mixed, as cheesemakers said inventories are tight while others said they’re becoming more available. Milk output is trending higher in the Central region and spot loads of milk at mid-week were reported as low as $7-under Class III. Plentiful volumes are available.

Milk output has passed spring peak in the West but cheese manufacturers have enough milk available. Production varies from somewhat lighter to somewhat stronger. A few manufacturers note tight spot load availability regardless of what type of cheese is requested. Domestic demand varies from lighter to steady. Food service remains comparatively less robust than retail, while export demand is steady to strong. Sellers say U.S. prices remain competitive, says DMN.

Spot butter fell to $2.24 per pound Tuesday, lowest CME price since Dec. 22, 2021, but it regained 5.50 cents Wednesday, and added 1.50 cents Thursday to hit $2.31, after closing Friday at $2.28.

Butter makers are actively churning in the Central region as cream remains plentiful, says DMN, but increasing seasonal demand from ice cream makers has drawn inventories down somewhat from early-spring. Cream multiples have increased slightly at the bottom of the range, but most are at or near flat market. Domestic butter sales are steady, meeting expectations. Spot loads are available and some are freezing product for use later in the year.

Seasonally strong milk production is beginning to tick down from the peak of spring output for some parts of the West. However, butterfat component levels continue to be more than sufficient, helping to keep cream widely available. Cream multiples hadn’t moved as of mid-week. Butter manufacturers were keeping their churns busy. Inventories are generally growing to various degrees, despite strong export demand. Domestic demand is steady, but retail demand remains comparatively more robust than food service. Domestic prices remain competitive to international levels despite trade policy changes that have taken place this year, according to DMN.