Preliminary data in the USDA’s latest Milk Production report shows March output at 19.8 billion pounds, up 0.9 percent from March 2024. The top 24 state production, at 19.0 billion, was up 1.0 percent. February’s 24-state total was revised up 26 million pounds. First quarter output was off 0.3 percent 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 0.3 percent from a year ago, and up 4 pounds or 0.2 percent in the 24 states.

Milk fat and protein were both well above last year, which put component adjusted production up 2.7 percent from last year, according to StoneX.

California output in March was down 75 million pounds or 2.1 percent from a year ago, 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 says “The latest figures from the California Department of Food and Agriculture showed that nearly 80 percent 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 or 0.1 percent in March, despite a loss of 5,000 cows. Output per cow was up 10 pounds.

Idaho showed a 62-million-pound increase or 4.3 percent, thanks to 29,000 more cows. Output per cow was unchanged.

Michigan was up 1.3 percent on 4,000 more cows and a 10-pound gain per cow. 

Minnesota was off 0.1 percent, on a loss of 6,000 cows, though output per cow was up 25 pounds. New Mexico was up 1.5 percent on 2,000 additional cows and a 15-pound gain per cow. New York was up 1.3 percent on a 30-pound increase per cow. Cow numbers were unchanged.

Oregon was off 0.5 percent on a 10-pound drop per cow. Cow numbers were unchanged. Pennsylvania was unchanged, on a 5-pound gain per cow offsetting a loss of 1,000 cows.

Texas put an additional 134 million pounds or 9.4 percent in the tank, thanks to a whopping 45,000 more cows and a 50-pound gain per cow.

Vermont was up 0.5 percent, thanks to a 45-pound gain per cow offsetting the loss of 2,000 cows. Washington State was down 4.3 percent, on a 15-pound drop per cow and 9,000 fewer cows.

HighGroud 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.”

Cash block Cheddar was falling this week and was trading Thursday morning at $1.70 per pound, down 13.50 cents so far on the week, the lowest CME price since April 7, after closing the previous Thursday at $1.8350. The barrels plunged to $1.69 Thursday, down 15 cents, lowest since April 7, after finishing last week at $1.84.

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 indicate 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.

The butter was at $2.3250 per pound Thursday. It closed last Thursday at $2.3425.

Butter churning has 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 are busy following the holiday weekend and butter inventories are generally growing. Domestic retail demand is steady to strong.

Some reported that, while the holiday weekend generated some improved food service demand, it remains somewhat weak and down from last year. Export demand is strong and likely contributing to less butter going to the freezer.

Grade A nonfat dry milk closed Thursday morning at $1.1875 per pound, highest since March 3, following a $1.1725 finish last week.

Dry whey was at 51 cents per pound Thursday, highest since March 25, after closing last Thursday at 48.25 cents per pound.

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.

The American Relief Act of 2025, signed into law on Dec. 20, 2024, extended the authorization of the Dairy Forward Pricing Program contained in the Food, Conservation and Energy Act of 2008 (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 the extra buying. Whey imports totaled 149.5 million pounds, up 41.7 percent from March 2024 and the highest monthly volume since May 2021 on a 30-day adjusted basis, according to HighGround Dairy.