With 8,000 More Cows, Milk Output Surges in March
Published: Friday, May 2, 2025
The following is from Lee Mielke, author of a dairy market column known as "Mielke Market Weekly."
Preliminary data in the Agriculture Department's latest Milk Production report shows March output at 19.8 billion pounds, up .9% from March 2024. The top 24-state production, at 19 billion pounds, was up 1%. February's 24-state total was revised up 26 million pounds.
First quarter milk output was off .3% from a year ago, with cow numbers up 36,000 from fourth quarter 2024 and 58,000 more than first quarter 2024.
March cow numbers totaled 9.404 million, up 8,000 head from February and 57,000 more than a year ago. The February count was revised down 9,000 head. The 24-state count, at 8.964 million, was up 9,000 from February and 72,000 above a year ago. The February count was revised down by 8,000 head.
March output per cow in the 50 states averaged 2,111 pounds, up 6 pounds, or .3%, from a year ago, and up 4 pounds, or .2%, in the 24 states.
Milk fat and protein were both well above last year, which put component adjusted production up 2.7% from last year, according to the StoneX Dairy Group.
California output in March was down 75 million pounds, or 2.1%, from a year ago, but smallest decline in six months. Cow numbers were up 1,000 and output per cow was up 45 pounds, as the Golden State continues to recover from bird flu.
The Daily Dairy Report said, "The latest figures from the California Department of Food and Agriculture showed that nearly 80% of the state's infected herds have been free of the virus for at least 30 days, and only eight herds faced new infections in the past month. But the virus continued to take a toll in March."
StoneX adds that new strains of bird flu have developed in Arizona and Nevada in first quarter, but the USDA has not reported any spreading since.
Wisconsin eked out a 2 million pound increase in March, or .1% from a year ago, despite a loss of 5,000 cows. Output per cow was up 10 pounds. Idaho showed a 62 million pound gain, or 4.3%, thanks to 29,000 more cows. Output per cow was unchanged.
Michigan was up 1.3% on 4,000 more cows and a 10-pound gain per cow.
HighGround Dairy stated, "Income over Feed Costs using the Dairy Margin Coverage calculation set a record in September 2024, followed by the second and third all-time in October and November, giving farmers a clear signal to make more milk. There is also new manufacturing capacity in the Plains states, also pushing producers in that region to increase milk output. The results of these events have pushed milk production to increase year-over-year for the full first quarter of 2025, after falling year-over-year for most of the 18 months ending December 2024."
The USDA's latest Livestock Slaughter report showed an estimated 217,900 head of dairy cows were slaughtered under federal inspection in March, up 900 head from February, but 26,700 head, or 10.9%, below March 2024.
The latest weekly slaughter data reported 47,300 dairy cows sent to slaughter the week ending April 12, down 2,000 from the previous week, and down 7,800, or 14.2%, from a year ago. Year to date, 790,200 head had been culled, down 70,100 head, or 8.1%, from a year ago.
The annual Livestock Slaughter Summary issued last week showed 3.1 million dairy cows were sent to slaughter in 2024, up 350,500, or 12.9%, from 2023.
Butter and cheese inventories grew seasonally in March. The latest Cold Storage report pegged March 31 butter stocks at 323.7 million pounds, up 18.1 million pounds, or 5.9%, from February, and up 12.6 million, or 4%, from March 2024. It was the second largest in 35 years, according to HighGround Dairy. February stocks were revised up 119,000 pounds from last month's report.
American-type cheese stocks jumped to 793.5 million pounds, up 13.2 million, or 1.7%, from February's level, but were down 35.1 million pounds, or 4.2%, from a year ago. The February total was revised 2.6 million pounds lower.
The "other" cheese category holdings climbed to just under 575 million pounds, up 3.2 million, or .6%, from the February level, but down 28.7 million pounds, or 4.7%, from a year ago. February's level was revised down 2.5 million pounds.
The total March cheese inventory hit 1.39 billion pounds, up 15.9 million pounds, or 1.2%, from January, but down 62.3 million, or 4.3%, from a year ago. The February total was revised down 5 million pounds. The report is pretty much viewed as neutral to the market.
Speaking of cheese, CME block Cheddar closed the last Friday of April at $1.70 per pound, down 13.50 cents on the week, lowest since April 7, and a nickel below a year ago. The barrels fell to $1.69 last Thursday, lowest since April 7, but closed last Friday at $1.7050, also down 13.50 cents on the week and 6.75 cents below a year ago. Sales totaled 27 cars of block on the week and 21 of barrel.
Dairy Market News reports that cheese demand continued to move in somewhat bullish fashion, according to Central region cheesemakers. Orders for May and June have elevated in recent weeks. The availability of milk is evidence that the spring flush is here. Spot prices at mid-week were as low as $7-under Class III.
Milk production increases in the West are slowing, according to some, but are providing ample volumes. Cheese production was generally stronger following the holiday weekend. A few manufacturers indicated that their inventories are extremely tight. Demand varies from steady to strong for both domestic and international buyers. Domestic retail demand is stronger than food service demand, which has been weaker thus far this year, according to DMN.
Not helped by the Cold Storage data, butter closed last Friday at $2.28 per pound, down 6.25 cents on the week, and 69 cents below a year ago, with nine sales.
Butter churning resumed following the holiday weekend and is moving along steadily, says DMN. Cream remains abundant and is expected to remain so through or around the Memorial Day holiday, if not longer. Cream multiples, despite the recent holiday plant downtime, have held at or just above flat market as ice cream and cream cheese processors have picked up production. Butter demand is meeting seasonal expectations. Retail and food service customers are content with current prices and steadily adding to their orders, according to DMN.
Cream remains steadily available in the West, even though milk production increases have slowed or fat component levels have decreased. Cream multiples at mid-week remained in line with pre-holiday week levels. Churns were busy following the holiday weekend and butter inventories are generally growing. Domestic retail demand is steady to strong, says DMN.
Grade A nonfat dry milk closed the week at $1.1875 per pound, 1.50 cents higher, highest since March 3, and 7.75 cents above a year ago, on 17 sales.
Dry whey hit 51 cents per pound last Thursday, highest since March 25, but finished Friday at 50.50 cents per pound, 2.25 cents higher, and 12.25 cents above a year ago. There were seven sales made on the week at the CME.
The May federal order Class I base milk price was announced at $18.37 per hundredweight, down $1.20 from April, and 9 cents below May 2024. It equates to $1.58 per gallon, down a penny from a year ago. The five-month average stands at $20.12, up from $18.58 a year ago, and compares to $20.12 in 2023.
It was announced last week that the American Relief Act of 2025, signed into law on Dec. 20, 2024, has extended the authorization of the Dairy Forward Pricing Program contained in the 2008 Farm Bill, through Sept. 30, 2025.
Handlers may now enter new forward price contracts with producers or cooperative associations through Sept. 30, 2025, for milk marketed on or after April 24, 2025. Contracts may extend through Sept. 30, 2028. All other provisions of the Dairy Forward Price Program remain the same, according to the USDA.
China's dairy imports ticked up in March as tariff talk no doubt prompted some extra buying. Whey imports totaled 149.5 million pounds, up 41.7% from March 2024, and the highest monthly volume since May 2021 on a 30-day adjusted basis, according to HighGround Dairy.
"Trade tensions with the U.S., which accounts for 42% of China's total whey imports, continue to escalate," warned HighGround. "The 25% tariff exemption on U.S. whey was reinstated at the end of February and was in effect for shipments that arrived in March. Still, imports from the U.S. were up 18.7%."
HGD adds, "China implemented a 125% on all U.S. imports in April, effectively taking the tariff on U.S. whey up to 150%. At this rate, the US is priced out of the Chinese whey market and shipments are expected to decrease in the coming months. March import data indicated China had already begun to shift whey sourcing, increasing imports from Netherlands, Argentina, Poland and Turkey."
"Lactose sailings posted the highest March volume on record," said HGD, and 63% of lactose imports come from the U.S. which saw a 10.1% increase.
"Lactose was not included in China's 10% tariff on U.S. agriculture products announced at the beginning of March. However, the 125% tariff rate implemented in April does."
Whole milk powder imports totaled 95.3 million pounds and skim milk powder totaled 56.8 million, up 30.7% and .7%, respectively.
Cheese imports amounted to 36.9 million pounds, up 8.6% and "narrowly eclipsed 2023 levels to post the largest March volume since 2021," said HGD. New Zealand accounted for the bulk of the increase.
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