Supply, Demand in Balance as Spring Flush Arrives
Published: Friday, May 30, 2025
The following is from Lee Mielke, author of a dairy market column known as "Mielke Market Weekly."
U.S. milk tanks are filling up and output surpassed year ago levels for the fourth month in a row in April. The Agriculture Department's preliminary data in its latest Milk Production report shows output at 19.37 billion pounds, up 1.5% from April 2024, biggest increase since August 2022. The 24-state production hit 18.6 billion, up 1.6%. The March totals were revised up 26 million pounds.
StoneX points out that fat and protein content in the milk were also up from last year and put component adjusted production up 3%.
April cow numbers totaled 9.425 million, up 5,000 head from March and 89,000, or 1%, more than a year ago. The March count was revised up 16,000 head. The 24-state count, at 8.983 million, was up 7,000 from March, and 93,000, or 1%, above a year ago. The March count was revised up by 12,000 head.
April output per cow in the 50 states averaged 2,055 pounds, up 11 pounds, or .5%, from a year ago, and up 12 pounds, or .6%, in the 24-state data.
California milk output was down 49 million pounds, or 1.1%, from a year ago and down for the seventh month in a row. Cow numbers were up 1,000 head, but output per cow was down 30 pounds, as the nation's biggest milk producer continues its recovery from bird flu. The flu has seen a resurgence, however, most cases are subclinical and producers have not reported a decline in milk output.
Wisconsin inched up .1% on a 4 million pound increase. Cow numbers were down 7,000 head, but output per cow was up 15 pounds.
StoneX broker Dave Kurzawski said in the May 26 Dairy Radio Now broadcast "Tis the time of year for milk output to increase. It's the spring flush, and we're probably at the peak right now."
When asked if this size of an increase, considering the new cheese capacity that has come on line, wasn't a concern for the market, he answered, "I think we over estimated how quickly those cheese plants would be up and running. That slower start makes sense because it takes time to put a cheese plant together."
He said we now have the opportunity to make milk. When you get into the summer months you don't know what the weather is going to do and how that will impact production, but he suspects that milk is "in balance." "We're not awash in milk anywhere and we're not dumping milk. We're more or less in balance even with a 1.5% increase." Added to that are strong U.S. exports which he believes will continue "until prices narrow between the U.S. and the rest of the world."
Speaking of cow numbers, the latest weekly slaughter report showed 45,900 dairy cows were sent to slaughter the week ending May 10, up 900 from the previous week, but down 2,100, or 4.4%, from a year ago. Year to date, 973,600 head had been culled, down 92,100 head, or 8.6%, from a year ago.
China's April dairy imports looked stronger, according to the latest Customs Statistics. Cheese imports totaled 37.6 million pounds, up 6.2% from April 2024.
HighGround Dairy said, "Imports moved counter-seasonally higher from March and stretched to a record high for the month of April. New Zealand's market share jumped to an impressive 66.5% as imports from the country increased 36% from prior year. Australia was the second largest supplier at 16%." The U.S. share was down, as was that of Italy, France, the Netherlands and Denmark.
Skim milk powder imports totaled 60.5 million pounds, up 27.4%, as volumes continued to recover versus 2024, according to HighGround.
Whey product imports, at 122.3 million pounds, were up 13.9%, and were up 31.3% year to date.
The May 20 Daily Dairy Report said (whey) "Merchants rushed to receive shipments ahead of 'liberation day' tariffs. Any product that left a U.S. port by April 9 and arrived in China by May 13 did not face the sharply higher border tax."
The U.S. accounted for 45% of China's whey product imports last month, and total whey imports were 13.9% greater than in April 2024, according to the DDR.
Butter imports amounted to just 16 million pounds, down 21.9% from a year ago, although YTD butter imports were up 25.1% from 2024.
China's infant formula imports continued to recover, according to HGD, up 18.4%, "Showing solid improvement from a weak 2024. While the Netherlands maintained the largest market share, it ceded some ground to both New Zealand and Germany, though imports from all three countries rose year over year. This rebound aligns with evolving parenting behaviors: children's health products were the second-fastest growing consumer health category in China over the five years leading up to 2023, and that trend is expected to continue," said HGD.
The Agriculture Department announced the June federal order Class I base milk price at $17.26 per hundredweight, down $1.11 from May, and $2.82 below June 2024. It equates to $1.48 per gallon, down from $1.73 a year ago. The six-month Class I average stands at $19.65, down from $18.83 a year ago, and compares to $19.77 in 2023.
After double-digit increases the week before, Cheddar block cheese climbed to $1.9475 per pound last Thursday, highest price since Oct. 7, 2024. Unfortunately, it closed last Friday at $1.87, down 6 cents on the week, and dead even with a year ago. The barrels finished the week at $1.8525, 2.75 cents lower, and 12.75 cents below a year ago. There were 32 cars of block sold on the week and 13 of barrel.
Central region retail cheese sales are steady to stronger, according to Dairy Market News. Food service demand is steady. Milk output is steady in the Upper Midwest but declining in the southern part. Cheesemakers are running busy schedules as some prepared for down time this weekend. Milk at mid-week was moving as low as $7-under class.
Some Western cheese manufacturers reported milk availability was looser with Class I demand generally lightening due to spring recesses beginning or fast approaching at educational institutions. Cheese production was mixed as was availability. In some cases, inventories were tight regardless of variety. Domestic retail and food service demand is stronger, but food service is less robust. Demand from international buyers is stronger, says DMN.
Butter held steady the first three days of the week but headed higher from there and saw its Friday finish at $2.42 per pound, up 7.75 cents on the week, highest since February 20, but 70.25 cents below a year ago, with 39 sales on the week.
Central milk output is steady to lighter and upper Midwest cool temperatures are keeping milk components high, leaving plenty of cream available, says DMN. Ice cream makers are drawing more on available cream.
Some butter plants scheduled down time during the weekend, reducing cream demand, but churns are active as processors work to build inventory for later use. Some plants are increasing 82% fat butter production amid increasing export demand, says DMN. Domestic demand is steady.
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