As expected, Federal Milk Marketing Order (FMMO) regional uniform milk prices dropped in April but to a smaller degree than what was observed in the month prior.
Administrators of the 11 FMMOs reported April prices and pooling data May 11-14. Here’s Progressive Dairy’s monthly review of the numbers to provide some additional transparency to your milk check.
Uniform milk prices, PPDs
Statistically, uniform milk prices dropped month over month in April for all 11 regional FMMOs (Table 1), with the average uniform milk price across all FMMOs falling 85 cents from March prices.
In reviewing individual orders, the top average was $23.71 per hundredweight (cwt) in Florida, down 95 cents from March. Again, the FMMO with the lowest average was the Upper Midwest at $17.75 per cwt, down $1.07 per cwt from the previous month.
Compared to March, April base producer price differentials (PPDs) increased 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 April
Milk prices fell again for April:
- 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 2024.
- 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 Florida to a low of $21.37 per cwt in the Upper Midwest.
- Class I mover formula: The spread in the monthly advanced Class III skim milk pricing factor ($9.61 per cwt) grew 79 cents for April. This 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 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.
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 $19.22 per cwt, the April Class II milk price is down 90 cents from March and down $2.01 per cwt from April 2024.
- The April Class III milk price fell $1.14 from the previous month to $17.48 per cwt. It’s up $1.98 per cwt from the same month a year ago.
- At $17.92 per cwt, the April Class IV milk price is down 29 cents from March and down $2.19 from this time last year.
The gap between April 2025 Class III and Class IV milk prices was 44 cents with Class IV on top, giving incentives for depooling of Class IV milk and affecting FMMO pooling.
Components values, tests
The value of butterfat remained relatively unchanged in April at $2.64 per pound, a slim 2-cent improvement from March. The value of milk protein settled at $2.16 per pound, falling 30 cents from the month prior.
Compared to March, the April value of nonfat solids was 99 cents per pound, down 5 cents. Other solids stumbled 5 cents to 31 cents per pound.
Influencing statistical uniform prices “at test,” April’s average butterfat and protein tests in pooled milk were 99 cents to $1.18 per cwt lower compared to March’s in the FMMO’s providing preliminary data. Somatic cell counts in the few FMMOs reporting monthly averages were higher from March to April.
Pooling totals
The USDA releases preliminary April milk production estimates May 21. Pooled milk volumes in Classes I, II and IV were down from the previous month, with Class III being the sole class to post a gain on a milk volume basis (Table 2).
The total milk volume pooled through FMMOs in April was estimated at 14.52 billion pounds, 285 million pounds less than in March.
April Class I pooling was down about 43 million pounds from March, representing about 23% of total milk pooled. Class II and Class IV pooling was also down from the previous month at about 136 million pounds and 684 million pounds, respectively. At approximately 1.41 billion pounds, Class II represented about 9.6% of the total pool. Class IV milk at 2.67 billion pounds represented about 18.4% of the total pooled milk.
At about 7.16 billion pounds, Class III was up approximately 602 million pounds from March and represented 49.3% of the total pool, continuing the upward trend apparent since February.
Looking ahead
May uniform milk prices and pooling totals will be announced June 11-14. Based on FMMO advanced prices and current futures prices, monthly uniform prices will once again be lower.
- Class I base price: At $18.37 per cwt, the Class I base price is down $1.20 per cwt from April and 9 cents from May 2024.
- Class I base with zone differentials: May’s Class I prices will average about $21.19 per cwt across all FMMOs, ranging from a high of $23.77 per cwt in Florida to a low of $20.17 per cwt in the Upper Midwest.
- Class I mover formula: The spread in the monthly advanced Class III skim milk pricing factor ($8.40 per cwt) and advanced Class IV skim milk pricing factor ($9.02 per cwt) shrunk to 62 cents for May, meaning the current by soon-to-be altered Class I mover formula positively impacted Class I prices in May.
Based on Progressive Dairy calculations, using the Class I mover calculated under the higher-of formula would have resulted in a May Class I base price of about $17.96 per cwt, 31 cents lower than the actual May price determined using the average-of plus 74 cents formula.
- Other class prices: May Class II, III and IV milk prices will be announced June 4. As of trading May 13, the Chicago Mercantile Exchange (CME) Class III milk futures price closed at $18.43 per cwt, up $1.38 from April’s price. The May Class IV milk futures closed at $18.05, up 4 cents from April.
If Class III-IV futures prices hold, the May Class III-IV milk price gap will be 38 cents, adding incentives for Class III depooling.
Other information
- The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released May 12. (Read: May WASDE projects increased milk per cow, growth in cow inventories)
- The falling all-milk price forced the Dairy Margin Coverage (DMC) program margin lower in March. (Read: March DMC margin falls to $11.55 per cwt)
Also, check the Progressive Dairy website later this month for milk production, cull cow marketing, risk management and DMC program margin updates.
