Federal Milk Marketing Order (FMMO) regional uniform milk prices fell in March compared to February, a trend likely to continue.
Administrators of the 11 FMMOs reported March prices and pooling data April 11-14. Here’s Progressive Dairy’s monthly review of the numbers to provide some additional transparency to your milk check.
Uniform prices, PPDs
March’s statistically uniform milk prices fell in all of the 11 regional FMMOs (Table 1), when comparing prices to February.
In reviewing individual orders, the top average was $24.66 per hundredweight (cwt) in Florida, down 76 cents from February. The lowest average was once again the Upper Midwest FMMO at $18.82 per cwt, down $1.49 per cwt from the month prior.
Compared to February, March base producer price differentials (PPDs) were up in the seven applicable FMMOs (Table 1). PPDs have zone differentials, meaning some PPDs could be negative, and milk handlers may also apply PPDs and other “market adjustment factors” differently on your milk check.
Class prices for March
Milk class prices took a dip in March:
- Class I base price: At $21.02 per cwt, the Class I base price is down 25 cents from February but $2.22 higher than the same month a year ago.
- Class I base with zone differentials: Class I zone differentials are added to the base price at principal pricing points to determine the actual Class I price in each FMMO. With those additions, March Class I prices will average approximately $23.84 per cwt across all FMMOs, ranging from a high of $26.42 per cwt in the Florida FMMO to a low of $22.82 per cwt in the Upper Midwest FMMO.
- Class I mover formula: The spread in the monthly advanced Class III skim milk pricing factor ($10.81 per cwt) and advanced Class IV skim milk pricing factor ($10.61 per cwt) shrunk to just 20 cents per cwt for March. That means the current but soon-to-be-altered Class I mover formula positively impacted Class I prices.
Based on Progressive Dairy calculations, using the Class I mover calculated under the “higher-of” formula would have resulted in a March Class I base price of about $20.40 per cwt, 62 cents less than the actual March price determined using the “average-of plus 74 cents” formula.
The change in the formula back to higher-of calculations – along with zone differentials adjustments and other changes – is included in the FMMO changes that will be implemented June 1.
- At $20.12 per cwt, the March Class II milk price is down 96 cents from February and down $1 from the same month a year ago.
- The March Class III milk price fell $1.56 from February to $18.62 per cwt. It’s up $2.28 from March 2024.
- At $18.21 per cwt, the March Class IV milk price is down $1.69 from February and down $1.88 from this time last year.
The gap between March 2025 Class III and Class IV milk prices increased slightly to 41 cents per cwt – with Class III again on top – but apparently provided little incentive for depooling Class III milk.
Component values, tests
March milk class prices were influenced by the value of butterfat falling another 20 cents from February to $2.62 per pound. This is the lowest butterfat price seen since December 2021.
The value of milk protein fell a slim 7 cents to $2.46 per pound, retreating from February’s high.
Compared to February, the March value of nonfat solids was down 12 cents at $1.04 per pound, while the other solids dipped about 11 cents to 36 cents per pound.
Influencing statistical uniform prices “at test,” March’s average butterfat and protein tests in pooled milk were slightly lower compared to February’s in the FMMOs providing preliminary data. Somatic cell counts in the few FMMOs reporting monthly averages were lowered from February to March.
Pooling totals
The USDA releases preliminary March milk production estimates on April 22. With March a longer month than February, pooled milk volumes in all classes were up from the previous month, with largest gains in Class III and Class IV milk (Table 2).
The total milk volume pooled through FMMOs in March was estimated at 14.81 billion pounds, 2.16 billion pounds more than in February, with signs pointing to growth in both production and pooling.
March Class I pooling was up about 112 million pounds from the previous month. At 3.33 billion pounds, it represented about 22.5% of total milk pooled. Class II pooling was also up about 105.3 million pounds, representing about 10.4% of the total pooled milk.
At 6.56 billion pounds, Class III was up about 1.23 billion pounds from February and represented about 44.3% of the total pool. Class III milk pooled in March represented the highest monthly volume since August 2024.
And finally, March Class IV pooling increased 685 million pounds from February to about 3.35 billion pounds, representing about 22.7% of the total milk pooled.
Looking ahead
April uniform prices and pooling totals will be announced May 11-14. Based on FMMO advanced prices and current futures prices, monthly uniform prices will be lower.
- Class I base price: At $19.57 per cwt, the Class I base price is down $1.45 from March but 39 cents higher than in April of last year.
- Class I base with zone differentials: Class I zone differentials are added to the base price at principal pricing points to determine the actual Class I price in each FMMO. With those additions, April’s Class I prices will average about $22.39 per cwt across all FMMOs, ranging from a high of $24.97 per cwt in the Florida FMMO to a low of $21.37 per cwt in the Upper Midwest FMMO.
- Class I mover formula: The spread in the monthly advanced Class III skim milk pricing factor ($10.40 per cwt) and advanced Class IV skim milk pricing factor ($9.61 per cwt) grew 79 cents for April. This means that the current but soon-to-be altered Class I mover formula again positively impacted Class I prices this month.
Based on Progressive Dairy calculations, using the Class I mover calculated under the higher-of formula would have resulted in an April Class I base price of about $19.24 per cwt, 33 cents less than the actual April price determined using the average-of plus 74 cents formula.
- Other class prices: April Class II, III and IV milk prices will be announced April 30. As of trading on April 11, the Chicago Mercantile Exchange (CME) Class III milk futures price closed at $17.22 per cwt, down $1.37 from the March price. The April Class IV milk futures closed at $17.91 per cwt, down 67 cents from March.
If Class III-IV futures prices hold, the March Class III-IV milk price gap will be 69 cents per cwt, adding incentives for depooling.
Other information
- The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released April 10. (Read: April WASDE report forecasts higher milk output per cow, higher cow inventories)
- The national average for 2024 DHI test-day herd SCC was 181,000 cells per milliliter, unchanged from 2023, according to a summary report by the Council of Dairy Cattle Breeding. (Read: InFocus: National DHI test-day somatic cell count unchanged at 181,000)
- Analysts at Rabobank anticipate dairy farmers worldwide will see higher revenues due to elevated milk prices. (Read: Rabobank: Global dairy market sees modest growth amid trade shifts)
Also, check the Progressive Dairy website later this month for milk production, cull cow marketing, risk management and DMC program margin updates.
