by Andrew P. Griffith, Livestock Marketing Specialist
February 28, 2025
Milk Production
Milk production in the 24 major states during January totaled 18.3 billion pounds, up 0.2 percent from January 2024. Production per cow for January averaged 2,054 pounds. The number of milk cows was 8.93 million head, 9,000 more than December 2024. December production was not revised from preliminary estimates. For milk production in the top 5 producing states, California decreased 5.7% from January a year ago; Wisconsin down 0.6%; Texas up 6.5%; Idaho up 6.4%; and New York up 2.0%. Other states with large production increases were South Dakota (6.5%) and Kansas (4.3%). States with large production decreases were Arizona (-4.1%) and Virginia (-3.3%).
Milk Price and Utilization
The Southeast Uniform milk price for January was $23.79, down $0.39 from December and $2.18 higher than January 2024. The Appalachian Uniform milk price was $23.26 down $0.17 from December and $2.16 higher than January 2024. January’s Class III price was $20.34, up $1.72 from December, and $5.17 higher than January a year ago. The Class IV price was down $0.01 at $20.73, and $1.44 higher than January 2024. The Class I Mover price for March is $21.02, down $0.25 from February. The milk/feed ratio for January was 2.82, up 0.09 from December.
Southeast Class I utilization was 79.73%, up 2.14% from December and 3.36% higher than January a year ago. The Uniform butterfat price was $2.9557, down 5.68 cents from last month and 5.12 cents lower than January 2024. The January Class I price was $24.18. February Class I price is $25.07. Appalachian Class I utilization was 76.15%, up 7.26% from December, and 3.65% higher than January a year ago. The Uniform butterfat price was $2.9557, down 4.46 cents from last month and 4.97 cents lower than January 2024. The January Class I price was $23.78.
Cheese Production and Stocks
Total cheese production in December was 1.20 billion pounds, down 0.7% from a year ago while butter production was up 2.3% to 198 million pounds. Nonfat dry milk (NDM) production was down 11.6% compared to a year ago with total production at 130 million pounds while skim milk powder (SMP) production was down 20.6% to 51.0 million pounds compared to a year ago. Total cheese stocks at the end of January were down 6% from January a year ago and up 1% from the previous month while butter stocks were up 26% from last month and up 9% from a year ago.
Cow Slaughter
Dairy cow slaughter in January was 247,900 head, up 23,400 head from December and 2,300 head less than January 2024.
Southeast Federal Order Prices
| Month | Uniform Price $/cwt. | Class I Price $/cwt. | Class III Price $/cwt. | Class IV Price $/cwt. | Class I % Utilization | Butterfat Price $/lb. |
|---|---|---|---|---|---|---|
| Aug 24 | 24.57 | 25.12 | 20.66 | 21.58 | 79.24 | 3.5927 |
| Sep 24 | 25.01 | 25.40 | 23.34 | 22.29 | 79.22 | 3.6019 |
| Oct 24 | 25.37 | 26.97 | 22.85 | 20.90 | 81.31 | 3.374 |
| Nov 24 | 25.46 | 26.33 | 19.95 | 21.12 | 79.11 | 3.0707 |
| Dec 24 | 24.18 | 25.23 | 18.62 | 20.74 | 77.59 | 3.0125 |
| Jan 25 | 23.79 | 24.18 | 20.34 | 20.73 | 79.73 | 2.9557 |
Appalachian Federal Order Prices
| Month | Uniform Price $/cwt. | Class I Price $/cwt. | Class III Price $/cwt. | Class IV Price $/cwt. | Class I % Utilization | Butterfat Price $/lb. |
|---|---|---|---|---|---|---|
| Aug 24 | 23.98 | 24.72 | 20.66 | 21.58 | 72.99 | 3.5911 |
| Seo 24 | 24.48 | 25.00 | 23.34 | 22.29 | 71.39 | 3.6044 |
| Oct 24 | 24.62 | 26.57 | 22.85 | 20.90 | 73.19 | 3.3346 |
| Nov 24 | 24.72 | 25.93 | 19.95 | 21.12 | 70.89 | 3.0706 |
| Dec 24 | 23.43 | 24.83 | 18.62 | 20.74 | 68.89 | 3.0003 |
| Jan 25 | 23.26 | 23.78 | 20.34 | 20.73 | 76.15 | 2.9557 |
What is the Market Offering for Milk to be Sold in May?
Ex: It is Feb. 28 and May Class III milk futures are trading at $18.32. Local May basis estimate is +$3.00.
| If May futures | = | 19.75 | 18.25 | 16.75 | |||
| and actual blend price | = | 22.75 | 21.25 | 19.75 | |||
| Sample Strategies | Realized Prices for May Milk | ||||||
| 1) Sold Futures | @ | 18.32 | 21.32 | 21.32 | 21.32 | ||
| 2) Bought Put | 17.25 | @ | 0.35 | 22.40 | 20.90 | 19.90 | |
| 3) Bought Put | 17.75 | @ | 0.59 | 22.16 | 20.66 | 20.16 | |
| 4) Bought Put | 18.25 | @ | 0.82 | 21.93 | 20.43 | 20.43 | |
| 5) Synthetic Put | |||||||
| Sold Futures | @ | 18.32 | |||||
| Bought Call | 19.25 | @ | 0.51 | 21.31 | 20.81 | 20.81 | |