US Milk Surge Signals Mixed Outlook for Global Trade
Milk production in the United States continues to expand, with April 2025 output up 1.5% year-on-year, reaching 19.37 billion pounds. This increase is driven by both higher herd numbers (up 89,000 cows YOY) and improved per-cow yields. Rising production is supporting stronger supply-side dynamics, which have already lifted wholesale prices of cheese, butter, and non-fat dry milk in June.
Despite this, market analysts caution against over-optimism. While demand for high-fat dairy products such as cheese and butter remains robust—particularly in the export market—the skim milk solids market is showing weakness, and broader global dairy demand remains uneven, especially from key buyers like China.
USDA’s 2025 forecast pegs milk output at 227.8 billion pounds, with Class III and IV prices hovering around $18.65–$18.85/cwt. Export growth is skewed heavily toward high-value products, while NDM and whey face bearish trends.
The dairy trade is watching the Q3 and Q4 outlook carefully, with Rabobank highlighting risks of market correction as production outpaces demand in the absence of major new demand triggers.
Industry Insight:
Dairy processors should prioritize product mix toward high-fat and value-added segments. Meanwhile, Indian exporters must stay alert to global price competitiveness and shifting fat-solid dynamics, especially as supply-side pressures intensify.
Source : Dairynews7x7 June 29th 2025 Read full story here