LUBBOCK, TEXAS (RFD NEWS) — Milk production is still growing, but the pace is slowing as dairy markets split between ample milkfat supplies and strong protein demand. March milk production increased 2.3 percent on a liquid basis, marking the fourth straight month of year-over-year growth.
Butter has softened as milkfat supplies remain ample. CME butter prices eased over the past month, even as overall milk production gains decelerated.
Skim solids are telling a different story. Nonfat dry milk prices set records through April and into May as new cheese capacity and strong demand for high-protein dairy products competed with dryers for milk. Use of yogurt, cottage cheese, and whey protein concentrate also continued to grow.
Consumer pressure remains a risk. Inflation accelerated in April, sentiment weakened, and softer foodservice volumes weighed on domestic cheese and butter use.
The Class IV rally helped lift the March Dairy Margin Coverage margin to $9.57 per hundredweight.
Farm-Level Takeaway: Strong protein demand is supporting milk prices, but consumer pressure and regional margin differences remain important for dairy producers.
Tony St. James, RFD NEWS Markets Specialist
For dairy producers, that could help support fluid milk use in cafeterias, breakfast programs, and other child nutrition settings.
Lower wheat production, smaller stocks, and higher projected prices explain the rally and put more attention on Plains crop conditions.
U.S. beef imports are running at a record pace while exports are falling, reflecting tight domestic cattle supplies and high U.S. beef prices.
Scouts say yields are landing close to USDA projections as they monitor drought pressure and abandonment concerns.
U.S. Wheat Associates is expanding into global fish feed markets, with early gains in South America and new opportunities emerging in Ecuador’s shrimp industry.
Cattle analysts say the U.S. beef cattle herd rebuild still faces major hurdles despite some minor positive signals noted in certain regions.
