Milk, corn supply projections increased

The “Mielke” Market Weekly

The U.S. Department of Agriculture sees plenty of milk and corn ahead. It raised its 2025 and 2026 milk production forecasts in the latest World Agricultural Supply and Demand Estimates report, based on the most recent data in the milk production report. Growth in output per cow was also increased for both years.

2025 production and marketings were projected at 229.2 and 228.2 billion pounds respectively, up 900 million on both from a month ago. If realized, both would be up 3.3 billion pounds or 1.5% from 2024.

2026 production and marketings were projected at 230.4 and 229.4 billion pounds respectively, up 1.3 billion pounds from a month ago. If realized, both would be up 1.2 billion pounds or 0.5% from 2025.

The price forecast for 2025 butter was lowered from last month’s estimate, based on recent price weakness, and is now projected at a $2.52 per pound average, down 4 cents, and compares to $2.8870 in 2024 and $2.6170 in 2023. The 2026 average was projected at $2.55, up 1.50 cents from a month ago.

Cheese is expected to average $1.84 per pound, unchanged from a month ago, and it compares to $1.8634 in 2024 and $1.7593 in 2023. The 2026 average was projected to slip to $1.81, unchanged from last month’s estimate.

Nonfat dry milk is projected to average $1.2750 per pound in 2025, up 1.5 cents from a month ago, and it compares to $1.2420 in 2024 and $1.1856 in 2023. The 2026 average is expected to climb to $1.2550, up 2 cents from last month’s estimate.

Dry whey was projected to average 57.50 cents per pound in 2025, unchanged from last month’s estimate, and it compares to 49.13 cents in 2024 and 36.18 cents per pound in 2023. The 2026 average will fall to 51.50 cents per pound, says USDA, unchanged from last month’s projection.

The 2025 Class III milk price was projected to average $18.50 per hundredweight, unchanged from last month’s estimate, and it compares to $18.89 in 2024 and $17.02 in 2023. The 2026 average was projected at $17.85, also unchanged from a month ago.

The Class 2025 IV price was lowered to $18.95, down a dime from last month’s estimate, and it compares to $20.75 in 2024 and $19.12 in 2023. The 2026 average was estimated at $18.85, up 25 cents from a month ago.

The USDA’s Crop Production report forecast U.S. corn production to hit a whopping 16.7 billion bushels, up 13% from 2024.

That would be the highest on record, according to the USDA. Yield was forecast at a record 188.8 bushels per acre, up 9.5 bushels from last year’s 179.3 bushels. Planted area, at 97.3 million acres, is up 2% from the previous estimate and up 7% from a year ago. Area harvested was forecast at 88.7 million acres, up 2% from the previous forecast, and up 7% from 2024.

Soybean production was forecast at 4.29 billion bushels, down 2% from 2024, but yields are expected to average a record high 53.6 bushels per acre, up 2.9 bushels from 2024. Area harvested was forecast at 80.1 million acres, down 3% from the previous forecast and down 7% from 2024.

The WASDE’s corn outlook was for sharply higher supplies, greater domestic use and exports and larger ending stocks. Projected beginning stocks for 2025/2026 were 35 million bushels lower, based on a slightly higher use forecast for 2024/2025. For 2024/2025, larger corn exports were partly offset by reductions in corn used for ethanol and glucose and dextrose.

Corn exports were raised 200 million bushels to a record 2.9 billion, reflecting U.S. export competitiveness and expectations of relatively low world market prices. Ending stocks are up 457 million bushels to 2.1 billion and, if realized, would be the highest in absolute terms since 2018/19, says the USDA. The season-average corn price was lowered 30 cents $3.90 per bushel.

The soybean outlook includes lower beginning stocks, production and ending stocks. Beginning stocks were lowered 20 million bushels on an increase to crush and exports in the prior marketing year. With lower supply and the slow pace of exports to date, exports were reduced 40 million bushels. Crush was unchanged at 2.54 billion bushels. Ending stocks were forecast at 290 million bushels, down 20 million from last month. The season-average soybean price forecast was unchanged at $10.10 per bushel. Soybean meal was forecast at $280 per short ton, down $10.

The latest crop progress report shows 94% of U.S. corn was silking, as of the week ending Aug. 10, up from 88% the previous week, 1% ahead of a year ago but 1% behind the 5-year average. Fifty-eight percent was in the dough stage, up from 42% the previous week and tied with a year ago. Fourteen percent was dented, 2% behind a year ago. Seventy-two percent was rated good to excellent, down 1% from the previous week but 5% ahead of a year ago.

Checking the beans, 91% were blooming, up from 85% the previous week and 1% ahead of a year ago but 1% behind the 5-year average. Seventy-one percent were setting pods, up from 58% the previous week and 1% ahead of a year ago but 1% behind the average. Sixty-eight percent were rated good to excellent, down 1% from the previous week but dead even with a year ago.

Fluid milk sales saw more improvement in June, perhaps driven by school pipeline filling. The USDA’s latest data showed packaged sales at 3.2 billion pounds, up 0.5% from June 2024, which follows a 0.9% slippage in May.

Conventional product sales totaled just under 3.0 billion pounds, up 0.6% from a year ago. Organic sales, at 231 million pounds, were down 1.1% from a year ago and represented a typical 7.2% of total milk sales in the month.

 Whole milk sales totaled 1.2 billion pounds, up 1.3% from a year ago and up 0.7% year to date. Whole milk represented 37.8% of total sales for the month.

Skim milk sales totaled 159 million pounds, up 12.7% from a year ago but down 2.9% YTD.

Packaged fluid sales in the first six months of 2025 totaled 21.1 billion pounds, down 1.1% from 2024. Conventional product sales totaled 19.6 billion, down 1.3% from a year ago. Organic products, at 1.5 billion pounds, were up 0.7% and represented 7.2% of total milk sales in the six months.

The predicted huge corn crop was called staggering by HighGround Dairy’s Curtis Bosma in the Aug. 18 Dairy Radio Now broadcast. He said it would be the largest corn crop on record and brought new contract lows for corn.

He also reported on USDA’s June Dairy Supply and Utilization report, which showed cheese usage was up 2.3% from a year ago, good news considering the new processing capacity that has come online. Domestic use was off 0.1%, but exports totaled 115 million pounds, up 34.3%, and kept that market in balance. HighGround said, “Economic uncertainty has driven more consumers to eat at home while the foodservice industry is struggling to attract customers.”

Butter usage surpassed 200 million pounds for the first time in June, according to HGD, up 10.8% from a year ago, driven primarily by domestic use, which totaled 187.5 million pounds, up 7.1%. Exports totaled 14.2 million, up 100%. “Butter is plentiful,” said Bosman, “due to farm milk components being through the roof.”

Nonfat and skim milk powder demand continues to struggle, falling year-over-year for the 20th time in the past two years. Usage totaled 205.7 million pounds, down 2.1%, the lowest total for the month since 2018. Bosma cited lower sales to our top customer, Mexico, and yet Mexico was our top importer of cheese.

Dry whey utilization was up 2.0%, thanks to exports jumping 20.4%. It was the first positive year-over-year comparison since April 2024, according to HGD.

Chicago Mercantile Exchange block Cheddar hit $1.88 per pound Tuesday, the highest CME price since June 10, but it plunged 10.25 cents Thursday and closed Friday at $1.7750, 7.50 cents lower on the week and 32.50 cents below a year ago when it was trading at $2.10 per pound.

The barrels also reached $1.86 Tuesday, also the highest since June 10, but finished Friday at $1.78, 1.75 cents lower on the week and 47.50 cents below a year ago when they were at $2.2550. Sales totaled 17 of block and no barrel.

Milk output continues to decline in the Central region, according to Dairy Market News. Cheesemakers say there are few loads available on the spot market, but downtime at some plants kept milk available to nearby plants. Prices at mid-week ranged from $3-under to $2-over class. Cheese production is steady to lighter. Domestic cheese sales to retail and food service markets are light and down from a year ago, while export cheese demand remains strong.

Cheese manufacturers across the West report milk remains mostly robust. Milk demand is holding steady, with availability seasonally tighter as temperatures rise again, yet it is generally balanced across the region. Production is running efficiently. Domestic demand is steady to light, while international buying holds firm or strengthening as U.S. cheese continues to offer attractive value.

Butter fell to $2.28 per pound Thursday, lowest since April 29, but it closed Friday at $2.30, down 5.50 cents on the week and 88 cents below a year ago when it peaked for the year at $3.18 per pound. The week saw 36 CME sales.

Central region milk output and components are declining, but components remain above a year ago. Cream production is down week-to-week but up from a year ago. Softening demand for cream from ice cream makers is leaving plenty available for churning, and schedules are busy. Domestic butter interest is lackluster but has held steady in recent weeks. Spot inventories of 82% butterfat butter are tight amid strong demand from international purchasers, said DMN.

Butter manufacturers in the West continue to meet contractual needs, even as seasonal declines in milk components persist. Cream demand from ice cream production remains somewhat strong, and spot cream for butter is generally available. Some plants are running steady schedules, while others experience downtime for equipment upgrades. Spot cream prices and availability show typical seasonal variability. Salted butter is widely available, while unsalted product is somewhat tighter. Domestic demand is steady to stronger, while food service orders are softer compared to last year. Export demand is mostly steady.

Grade A nonfat dry milk closed Friday at $1.27 per pound, up a half-cent on the week and 1.50 cents above a year ago, with 23 sales reported on the week.

Dry whey hit 61.25 cents per pound Wednesday, the highest since Feb. 4, but it finished Friday at 60 cents per pound, 2 cents higher and a nickel above a year ago, on five sales for the week.

The latest slaughter report shows 51,400 dairy cows were culled in the week ending Aug. 2, same as the previous week and up 200 head from a year ago. Year to date, 1,531,400 head had exited the dairy business, down 104,600 or 6.4% from a year ago.

In politics, the Make America Healthy Again Commission was expected to make recommendations to President Donald Trump on Tuesday this week, but the report itself was not issued as expected. Lots of eyes, particularly in the dairy industry, are on these recommendations, which will modify the USDA’s Dietary Guidelines for Americans.

Health and Human Services Secretary Robert Kennedy has commended the dairy industry for its contributions to the health and welfare of Americans; however, the so-called Physicians Committee for Responsible Medicine, a harsh critic of the meat and dairy industries, stands opposed to dairy’s accolades.

Meanwhile, the Food and Drug Administration has proposed to revoke 18 standards of identity for dairy products, concluding the standards are no longer necessary to promote honesty and fair dealing in the interest of consumers.

The National Milk Producers Federation calls several of the changes problematic and is seeking member input on what to do next. The FDA says it wants to get rid of three categories within the standards of identity rules: products no longer on the market, foods covered by different regulations and combination foods. NMPF said, “FDA’s analysis is wrong in some cases about products they claim are not in the marketplace.”

NMPF also voiced concern over what it called the “persistent and deepening labor shortage that has reached a critical inflection point,” according to Dennis Rodenbaugh, President and CEO of Dairy Farmers of America in NMPF’s latest Co-op Perspectives feature. “America’s food security is a matter of national security, and the U.S. agricultural system behind it, which contributes over $1 trillion to our economy, is at risk,” Rodenbaugh said.

The latest in President Trump’s tariff tit-for-tat is that China was granted another 90 days to agree to a new trade agreement. In a post on Truth Social, the President called on China to increase its purchases of U.S. soybeans to help reduce the countries’ trade imbalance. Talks also continue with Mexico.