With No USDA Data, Markets Play the Guessing Game
Published: Friday, October 31, 2025
As expected, the game of chicken continues on Capitol Hill in the third-longest shutdown in history, surpassed only by those in 1995 and 2018-19. There was no September Milk Production or Cold Storage report issued last week, which leaves industry players guessing and much uncertainty in the market.
The National Milk Producers Federation said, "With the government shutdown giving dairy producers only about two weeks to submit Emergency Livestock Relief program applications with a fully operational USDA, NMPF asked for an application extension when the government reopens. USDA agreed. About 2,100 FSA offices did reopen last Thursday but only had two employees each.
The government shutdown and the ramifications of the tariff wars have loaded the president's plate, all while he tries to keep his peace treaty intact in the Middle East. Trump announced last Thursday that he was ending trade talks with Canada due to an anti-tariff ad campaign by Ontario featuring President Ronald Reagan. Meanwhile, U.S. trade officials were to meet with their Chinese counterparts in Malaysia to try and resolve remaining issues with China.
There's been discussion of aid to U.S. farmers over lost soybean sales to China. The latest idea floated is an attempt to address high beef prices by importing beef from Argentina. That drew opposition from U.S. livestock producers who are enjoying the much-needed higher prices, as are dairy producers.
Agriculture Secretary Brooke Rollins announced actions last week to "strengthen the American beef industry, reinforcing and prioritizing the American rancher's critical role in the national security of the U.S.," according to a USDA press release. Since 2017, the U.S. has lost over 17% of family farms, says the USDA. "The national herd is at a 75-year low while consumer demand for beef has grown 9% over the past decade. Because increasing the size of the domestic herd takes time, the USDA is investing now to make these markets less volatile for ranchers over the long-term and more affordable for consumers."
"USDA will immediately expedite deregulatory reforms, boost processing capacity, including getting more locally raised beef into schools, and working across the government to fix longstanding common-sense barriers for ranchers like outdated grazing restrictions."
Founding members of the Common Ground Coalition (CGC), representing U.S. farms, ranches and livestock auction markets, met with Agriculture Secretary Rollins and various senators and representatives.
The meetings centered on "specific actionable solutions to secure ag-friendly tax policy, make risk management tools more effective, improve access to labor, achieve flexibility for livestock haulers, and create support for young and emerging livestock producers," according to a CGC press release, and "advocate for practical solutions that would strengthen the American beef industry."
Coalition members emphasized "American cattle producers face long-standing challenges from rising input costs to limited access to land, water and affordable lending that threaten the viability of family farms and ranches. Congressional allies listened and whole-heartedly agreed," the CGC stated.
"The most effective way to make beef more affordable isn't by artificially manipulating the market with imported product," said Joe Goggins, a coalition member from Montana. "It's by helping America's cattle producers enter and stay in the business of raising cattle."
Fluid milk sales were down again in August. The USDA's latest data showed packaged sales totaled 3.48 billion pounds, down 4% from August 2024, and follows a 1.2% dip in July. Conventional product sales totaled 3.2 billion pounds, down 3.6% from a year ago. Organic sales, at 236 million, were down 9.4%, and represented 6.8% of total milk sales in the month, down from a typical 7.2%.
Whole milk sales totaled 1.3 billion pounds, down 2.6% from a year ago, but up .1% year to date. Whole milk represented 36.3% of total sales for the month, down 2% from July's percentage. Skim milk sales totaled 171 million pounds, up 7% from a year ago, and up .3% YTD.
Packaged fluid sales in the eight-month period totaled 27.9 billion pounds, down 1.5% from 2024. Conventional product sales amounted to 25.9 billion, down 1.5% from a year ago. Organic products, at 1.99 billion pounds, were down 1.4%, and represented 7.1% of total milk sales in the eight months.
Speaking of fluid milk, the November federal order Class I base price was announced at $16.75 per hundredweight, down $1.29 from October, $5.78 below November 2024, and the lowest Class I price since August 2023. It equates to $1.44 per gallon, down from $1.94 a year ago. The 11-month Class I average stands at $19.01, down from $20.25 a year ago and compares to $23.76 in 2022.
China Customs Statistics shows Chinese butter imports soared to 23.7 million pounds, or 10.76 metric tons (MT), in September, up 23.7% from September 2024, and the first time ever to surpass 10,000MT, according to HighGround Dairy's Cara Murphy in the Oct. 27 Dairy Radio Now broadcast. Sailings from New Zealand were up 86%, she said, and that increased its market share to 84%. Additional shipments came from Argentina, United Kingdom and Denmark, with little from the U.S., despite U.S. prices at a huge discount to the rest of the world. U.S. shipments totaled just 24,251 pounds, down 58% from 2024.
Cheese imports totaled 31.5 million pounds, up 13.5%, with New Zealand remaining the primary origination country. China has a trade agreement with New Zealand, according to Murphy, and shipments were up 18% year-to-date. But New Zealand cheese sailings were down 60MT, or .74%, as China bought more product from Australia, Denmark and France, Murphy said. European cheese prices have fallen below the U.S. on the European Energy Exchange, so this will change things in the global marketplace, she said. New Zealand remains the highest in price right now.
Whey imports, at 117.4 million pounds, were down 3.1%, following two consecutive months of growth. Murphy said shipments from the U.S. were only off .5%. The overall decline was primarily driven by lower sailings from Ireland, Netherlands and France. Chinese pork prices have fallen to multi-year lows, and Murphy said the government is urging hog farmers to reduce supplies, as it reduces farm subsidies. "We really want to pay attention to this market," she concluded. "It's a big one for whey and, as the hog population in China starts to come down, we might see those whey shipments decline as well."
Whole milk powder imports, at 32.3 million pounds, were up 41.2%, while skim milk powder imports totaled just 18.5 million, down 12.5% from a year ago.
After gaining 7.50 cents the previous week, CME Cheddar block cheese climbed to $1.7950 per pound last Monday, highest since Aug. 26. It headed south last Tuesday and fell to $1.7250 last Thursday, but closed Friday at $1.7775, up a quarter-cent on the week and 12.25 cents below a year ago. The barrels made it to $1.7750 last Tuesday, highest since Sept. 3, but finished last Friday at $1.77, unchanged on the week, and a dime below a year ago. The CME saw 32 loads of block find new homes on the week and just one load of barrel.
Several Central region plants were down for maintenance, reports Dairy Market News, and cheese production was steady to lighter. Milk remains available in the region. Some plants were moving milk to Class I production, while others were selling loads to nearby cheese plants. Cheese demand is steady domestically. Contacts reported strong interest for Mozzarella and cheese barrels. Export demand is mixed. Some contacts noted interest from purchasers in Mexico is picking up, but demand is lighter from other countries.
Milk production is sufficiently covering cheese producer needs in the West, and spot demand is moderate to steady. Cheese production is generally steady. Traders report steady or somewhat tight cheese availability depending on variety. Domestic demand is flat. Export demand is somewhat lighter to steady as U.S. cheese prices are losing some competitive steam against international prices.
Butter fell to $1.5450 per pound last Wednesday, lowest since Feb. 26, 2021, but headed higher from there and closed last Friday at $1.6025 up 75 cents on the week, but $1.0925 below a year ago, with 66 sales, 27 on Thursday alone.
Central region milk components are strong, contributing to robust cream output, says DMN. Demand is strengthening from cream cheese and Class II processors but interest from butter makers is steady to lighter. Churning is active, but some plants ran lighter schedules this week due to downtime repairs. Retail butter demand is picking up, but food service sales are steady. Export interest is strong and inventories are tight as sales are outpacing production, according to DMN.
Grade A nonfat dry milk saw some recovery, closing last Friday at $1.16 per pound, up a nickel on the week but still 21.50 cents below a year ago on 38 sales.
Dry whey finished last Friday at 69 cents per pound, up 3.50 cents on the week, highest since Jan. 28, 2025, and 8.50 cents above a year ago, on three sales.
Federal Reserve officials will meet this week to decide whether to cut interest rates again, but a new quarterly report from CoBank said, "Significant downward revisions to monthly payroll estimates in August led many market observers to anticipate the Federal Reserve would begin cutting interest rate cuts more aggressively. However, recent economic data has generally been positive, tempering expectations for more significant cuts before the end of the year."
The most likely scenario, according to CoBank, is an additional four or five cuts of 25 basis points through 2026, leaving the overnight rate around 3% by the end of 2026. "The actual outcome will depend heavily on how the economic data looks and how successful the White House is in influencing monetary policy."
"Tariff policy uncertainty, the sharp decline in immigration and the massive surge in AI investments have made interpreting traditional economic reports more difficult," CoBank warned. "Sharp swings in monthly import volumes, a flattening of working-age population growth and a soaring stock market make it difficult to gauge how 'Main Street' America is doing economically."
"The intense politicization of attitudes has rendered longstanding public sentiment surveys erratic and unhelpful in gauging actual economic conditions," said Rob Fox, vice president of CoBank's Knowledge Exchange. "The federal government shutdown and potential loss of scheduled economic reports will make it even more difficult for businesses to gauge the economy and make prudent business decisions," warns CoBank.
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