In the news affecting dairy producers' bottom lines the third week of August 2025:
- September Class I base milk price falls 23 cents
- U.S.-EU trade agreement makes progress for dairy
- GDT index down slightly
- Family-owned farms account for 95% of U.S. farms
- USDA blocks taxpayer dollars for solar panels on prime farmland
September Class I base milk price falls 23 cents
The Federal Milk Marketing Order (FMMO) advanced Class I base price dropped 23 cents per hundredweight (cwt) from August to September for a Class I base price of $18.70 per cwt. As the price fell month over month, it also fell in comparison to the same month last year where the Class I base price was reported at $21.60 per cwt. The September 2025 Class I base price reflects the monthly advanced Class IV milk pricing factor ($9.34 per cwt) being the “higher-of” and used as the Class I mover in the milk pricing formula.
Class I zone differentials are added to the base price principal pricing points to determine the actual Class I price in each FMMO. With those additions, September’s Class I prices should average about $22.82 per cwt across all FMMOs. The highest price is in the Florida FMMO at $25.50 per cwt, down from the month prior yet remaining the highest of all FMMOs. The lowest price is in the Arizona FMMO at $21.30 per cwt. Those prices will impact September regional FMMO uniform milk prices, which will be announced Oct. 11-14.
September’s base skim milk price for Class I was $9.34 per cwt, an increase of 8 cents from August but down 15 cents from September 2024. The spread in the monthly advanced Class III skim milk pricing factor ($7.54 per cwt) and advanced Class IV skim milk pricing factor ($9.34 per cwt) was $1.80, a 1-cent improvement from last month. The advanced butterfat pricing factor was down to $2.77 per pound, a 9-cent fall from August.
U.S.-EU trade agreement makes progress for dairy
On Aug. 21, the U.S. and European Union (EU) announced an agreement was reached on the Framework on an Agreement on Reciprocal, Fair and Balanced Trade. The published statement includes commitments that Europe will liberalize U.S. dairy trade in a manner that marks the first measurable progress in transatlantic dairy trade in 10 years.
“The EU is notoriously difficult to negotiate with on trade,” said Becky Rasdall Vargas, senior vice president of trade and workforce policy at the International Dairy Foods Association (IDFA). “Today’s announcement represents the first time the EU has agreed to consider preferential tariffs for U.S. dairy exports in a decade. This is truly a testament to the commitment of U.S. negotiators. Moving forward, it will be important to keep discussions active given the significant amount of dairy processing equipment, inputs and other important goods that come from Europe and support the 9 billion dollars of investment in dairy processing in the United States.”
According to the White House, the new agreement would provide preferential market access for U.S. dairy products and commit to resolving certain nontariff barriers including streamlining requirements for dairy export certificates. Both elements are vital to improving trans-Atlantic trade relations.
“An agreement with the EU has the potential to unlock billions in new opportunities for American dairy. To get there, dairy exporters need to see market access opportunities into the EU mirror those the EU already enjoys when it ships butter, cheese and other dairy products into the U.S. market. We look forward to working with the administration to ensure the EU follows through on delivering results that farmers can see in their milk checks,” said Gregg Doud, president and CEO of National Milk Producers Federation (NMPF).
Exports are a lifeline for American dairy farmers, processors and the rural communities they support. But Europe has turned trade into a one-way street.
In 2024, the U.S. exported $167 million in dairy products to Europe, and the EU exported $2.8 billion to the U.S.
The U.S. Dairy Export Council (USDEC) is looking to level the playing field for U.S. exporters.
“This announcement is an important step in the right direction. America’s dairy farmers are done playing second fiddle in Europe’s rigged system,” said Krysta Harden, president and CEO of USDEC. “For too long, the EU has wielded tariffs and red tape, and misused geographical indications, as weapons to shut U.S. products out while European exporters enjoyed extensive access to our shelves. That imbalance has saddled us with a staggering 3 billion dollar dairy trade deficit in 2024 alone. We’re pleased that the administration is working to finally address this imbalance of opportunity.”
GDT index down slightly
The price index of dairy product prices sold on the Global Dairy Trade (GDT) platform is down slightly (03%) in the auction held Aug. 19.
Compared to the previous auction, prices for individual product categories were mostly lower. Whole milk powder and anhydrous milkfat traded slightly higher at 0.3% and 0.1%, respectively. Mozzarella and skim milk powder were down by 2.7% and 1.8%, respectively, while butter and cheddar cheese were down by 1% or less. There was no change for buttermilk powder, and lactose was not offered at this trading event.
The GDT platform offers dairy products from several global companies: Fonterra (New Zealand), Darigold, Valley Milk and Dairy America (U.S.), Inalpi (Italy), Arla (Denmark), Arla Foods Ingredients (Denmark), BMI (Germany), Kerry Dairy (Ireland) and Solarec (Belgium).
The next GDT auction is Sept. 2.
Family-owned farms account for 95% of U.S. farms
Family farms comprise 95% of all U.S. farms, according to the 2022 Census of Agriculture Farm Typology report released by the USDA’s National Agricultural Statistics Service (NASS).
The farm typology report primarily focuses on the “family farm,” defined as any farm where the majority of the business is owned by the producer and individuals related to the producer. The report classifies all farms into unique categories based on two criteria: who owns the operation and gross cash farm income (GCFI). GCFI includes the producer’s sales of crops and livestock, fees for delivering commodities under production contracts, government payments and farm-related income.
“Classifying America’s 1.9 million farms to better reflect their variety is critical to evaluating and reporting on U.S. agriculture,” said NASS Administrator Joseph Parsons. “Typology allows us to more meaningfully explore the demographics of who is farming and ranching today as well as their impact on the economy and communities around the country.”
The data shows that small family farms, those farms with a GCFI of less than $350,000 per year, account for 85% of all U.S. farms, 39% of total land in farms and 14% of the value of all agricultural products sold. Large-scale family farms (GCFI of $1 million or more) make up less than 4% of all U.S. farms but produce 51% of the value of all agricultural products.
The data also shows that the number of family farms decreased by 8% (almost 159,000 farms) since 2017. Midsize, large and very large farms experienced increases of 2%, 40% and 65%, respectively. The number of small family farms fell 10% (low sales) and 7% (moderate sales), respectively.
Other key findings from the 2022 Census of Agriculture Farm Typology report include:
- Farm specialization varied between the farm size groups. The majority (56%) of small farms specialized in cattle (31%) or other crops such as hay and forage production (25%). Over 60,000 (55%) of midsize farms specialized in grains and oilseeds, while large-scale farms were more varied in production specialization.
- Small family farms account for 44% of all direct sales to consumers, compared to 18% for midsize family farms and 19% for large-scale family farms.
- Compared to producers on midsize and large-scale family farms, small family farm producers are more likely to be women, age 65 or older, and report living on the farm operation. They were also more likely to report having served in the military, to work off the farm and to be a new/beginning farmer (farmed 10 years or less).
USDA blocks taxpayer dollars for solar panels on prime farmland
U.S. Secretary of Agriculture Brooke L. Rollins announced the USDA will no longer fund taxpayer dollars for solar panels on productive farmland or allow solar panels manufactured by foreign adversaries to be used in USDA projects. Subsidized solar farms have made it more difficult for farmers to access farmland by making it more expensive and less available. Within the last 30 years, Tennessee alone has lost over 1.2 million acres of farmland and is expected to lose 2 million acres by 2027. This problem is not just in Tennessee; since 2012, solar panels on farmland nationwide have increased by nearly 50%. That is why the department is taking action.
“Our prime farmland should not be wasted and replaced with Green New Deal subsidized solar panels. It has been disheartening to see our beautiful farmland displaced by solar projects, especially in rural areas that have strong agricultural heritage. One of the largest barriers of entry for new and young farmers is access to land. Subsidized solar farms have made it more difficult for farmers to access farmland by making it more expensive and less available,” Rollins said.
Effective immediately, the USDA will implement the following programmatic actions:
- For the USDA Rural Development Business and Industry (B&I) Guaranteed Loan Program, wind and solar projects are not eligible.
- For the USDA Rural Development Rural Energy for America Program Guaranteed Loan Program (REAP Guaranteed Loan Program), the USDA will ensure that American farmers, ranchers and producers utilizing wind and solar energy sources will install units that are right-sized for their facilities. If project applications include ground-mount solar photovoltaic systems larger than 50kW or ground-mount solar photovoltaic systems that cannot document historical energy usage, they will no longer be eligible for the REAP Guaranteed Loan Program, and priority points will no longer be given for REAP grants.
