In the news affecting dairy producers' bottom lines in the middle of September 2025:
- October Class I base milk price falls to $18.04
- The Federal Reserve makes its first rate cut since December
- GDT index down slightly
- Fluid milk sales down in July
- USDA accepts nearly 1.8 million acres through 2025 CRP enrollment
- Saputo Cheese to close Wisconsin manufacturing plant
- NMPF: U.S. milk production, exports grow in July
- Secretary Rollins announces reinvigorated farm to school grants
- Dairy Shrine announces $100,000 contribution from Dr. Les Hansen
October Class I base milk price falls to $18.04
The Federal Milk Marketing Order (FMMO) advanced Class I base price decreased 66 cents per hundredweight (cwt) from September to October for a milk price of $18.04 per cwt. The deteriorating price comes on the tailwinds of September’s low price, 23 cents below the Class I base price announcement for August. For comparison, the Class I base price was $23.17 per cwt for October a year prior. This month’s base price is reflective of the monthly advanced Class III milk pricing factor ($10.03 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, October’s Class I prices should average about $22.16 per cwt across all FMMOs. The highest price is in the Florida FMMO at $24.84 per cwt and the lowest price is in the Arizona FMMO at $20.64 per cwt. Those prices will impact October regional FMMO uniform milk prices which will be announced Nov. 11-14.
October’s base skim milk price for Class I was $10.03 per cwt, an increase of 69 cents from September and 79 cents lower than October 2024. The spread in the monthly advanced Class III skim milk pricing factor ($10.03 per cwt) and advanced Class IV skim milk pricing factor ($9.26 per cwt) was 77 cents, $1.03 change from last month with Class III on top. The advanced butterfat pricing factor was $2.39 per pound, a 38-cent dip from September.
The Federal Reserve makes its first rate cut since December
On Sept. 17, the Federal Open Market Committee lowered its federal funds rate by one-quarter point to a target range between 4% and 4.25%.
In announcing its decision, the committee cited moderate economic activity growth in the first half of the year, slower job gains and a slightly increased, but still low, unemployment rate. Inflation remains somewhat elevated.
With this incremental change in rate, some borrowers will see immediate relief while others may notice little change.
The policy turn itself is significant as this is the first rate cut in nine months, and there are forecasts for two additional cuts yet in 2025.
GDT index down slightly
The price index of dairy product prices sold on the Global Dairy Trade (GDT) platform is down slightly (0.8%) in the auction held Sept. 16. This is the third consecutive downward change but much less than the 4.3% drop in the last trading event.
Compared to the previous auction, prices for individual product categories were mostly lower. Cheddar cheese was the only product to go higher at 2.2%. Mozzarella was down 9.6% and anhydrous milkfat was down 1.5%. Butter, whole milk powder and skim milk powder were each down by less than 1%. 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 Oct. 7.
Fluid milk sales down in July
After a slight increase in June, fluid milk sales for July 2025 were 1.2% lower than the same month a year earlier. According to data from the USDA Agricultural Marketing Service:
- Total sales: July 2025 sales of packaged fluid milk products were estimated at 3.4 billion pounds, down 1.2% from the same month a year earlier. At 24.4 billion pounds, year-to-date sales of all fluid products are also 1.2% lower than last year.
- Conventional products: Monthly sales totaled 3.1 billion pounds, down 0.8% from the same month a year earlier. Sales of flavored whole milk were 4.7% higher than last year, while sales of fat-free (skim) milk and flavored fat-reduced milk were up 13.3% and 22%, respectively, from July 2024. Year-to-date 2025 sales were estimated at 22.7 billion pounds, down 1.2% from this time last year.
- Organic products: July sales totaled 242 million pounds, 5.7% less than a year earlier. Flavored whole milk sales were up 4.5%, but reduced-fat, low-fat and skim milk sales were all lower. Year-to-date organic fluid milk sales were estimated at 1.75 billion pounds, down 0.2% from this time last year. Organic represented about 7.2% total fluid product sales in July.
The U.S. figures are based on consumption of fluid milk products in Federal Milk Marketing Order (FMMO) areas, which account for approximately 92% of total U.S. fluid milk sales, and adding the other 8% from outside FMMO-regulated areas. Sales outlets include food stores, convenience stores, warehouse stores/wholesale clubs, nonfood stores, schools, the food service industry and home delivery.
USDA accepts nearly 1.8 million acres through 2025 CRP enrollment
The USDA announced acceptance of 1.78 million acres into the Conservation Reserve Program (CRP) through 2025 General, Continuous, Grassland and Conservation Reserve Enhancement Program enrollments.
According to the USDA’s Farm Service Agency (FSA), about 25.8 million acres are currently enrolled in CRP, the agency’s flagship conservation program through which landowners, farmers and ranchers voluntarily convert marginal or unproductive cropland into vegetative cover that improves water quality, prevents erosion, restores wildlife habitat and, in the case of Grassland CRP, enables participants to conserve grasslands while also continuing most grazing and haying practices.
The FSA received offers on more than 2.6 million acres. The program’s total acreage is capped at 27 million acres for fiscal year 2025, of which 1.8 million was available for enrollment, after offsetting for expiring acres and an administrative reserve, making for a highly competitive process for those who submitted offers for CRP.
About 955,795 acres are expiring Sept. 30 this year. Producers submitted reenrollment offers for just over 624,000 acres and offers for enrollment of new land totaled 2 million acres.
Kansas, South Dakota and Colorado hold the top three slots for accepted acres for all 2025 CRP enrollment opportunities.
The American Relief Act 2025 extended provisions for CRP through Sept. 30, 2025.
Saputo Cheese to close Wisconsin manufacturing plant
According to a letter to the state Department of Workforce Development, Saputo Cheese USA plans to close its Suamico, Wisconsin, manufacturing plant in December.
This decision that will result in the layoffs of 240 workers was first announced in early 2023 as part of the company’s strategic plan to modernize operations and consolidate its workforce.
The company is relocating its packaging operations from the Suamico plant to a new automated cut-and-wrap facility in Franklin, Wisconsin. Last month, the company opened a new cold storage distribution facility in nearby Caledonia, Wisconsin, which is expected to create 160 jobs in southeastern Wisconsin.
NMPF: U.S. milk production, exports grow in July
Overall domestic commercial use of milk in all dairy products increased by 2.2% year over year during the May-July period. Exports also showed strong growth, according to a report from the National Milk Producers Federation (NMPF).
Summarizing dairy markets in the September 2025 Dairy Management Inc./NMPF Dairy Market Report, U.S. milk production grew by 3% during this period, while total milk solids production increased by 3.9%, as the average solids composition of producer milk continues to increase.
Lower average milk prices in July from a month earlier were mostly offset by lower feed costs, resulting in a 16-cent-per-cwt lower DMC margin of $10.94 per cwt.
Retail price inflation ticked up in August as overall consumer prices rose by 2.9% from a year earlier. Dairy continued to show its inflation-fighting bona fides, with its average retail prices increasing by 1.3% from a year earlier versus 3.1% for all food and beverages.
For more information on commercial use, dairy trade, milk production, product inventories, prices and margins, view the September 2025 Dairy Market Report.
Secretary Rollins announces reinvigorated farm to school grants
The USDA is opening applications for the Fiscal Year 2026 Patrick Leahy Farm to School Grants. Through this grant opportunity, the USDA will invest up to $18 million in farm to school projects that connect farmers to the USDA’s child nutrition programs through local food procurement, agricultural education, school gardens and more.
The USDA reimagined the Farm to School Grant program, implementing several improvements, including streamlining the application, removing barriers to innovation and emphasizing partnerships to give small family farms the best chance at success.
Since the Farm to School Grant program’s inception in 2013, the USDA has awarded a total of $100 million to more than 1,200 Farm to School Grant projects across the country. This year’s grants represent the largest total amount the USDA has offered in Farm to School Grants in a single year.
Detailed information about eligibility and application requirements can be found in the request for applications. Applications close on Dec. 5.
Dairy Shrine announces $100,000 contribution from Dr. Les Hansen
Dairy Shrine recently received a $100,000 contribution from Dr. Les Hansen, internationally known dairy professor, researcher, genetics expert, judging coach and adviser to hundreds of University of Minnesota dairy students.
In recognition of this major gift, starting in 2026 Dairy Shrine will rename its top award program for graduating seniors the Dr. Les Hansen Student Recognition Award. This program recognizes seniors with outstanding leadership, activity participation, academic ability and interest in the dairy industry. The highest award winner receives $2,000, the second $1,500, and the other four receive $1,000 each. Honorees are recognized at the annual Dairy Shrine banquet at World Dairy Expo in October.
“We could not be more grateful for Dr. Hansen’s support of Dairy Shrine. It is extremely fitting to rename our senior dairy student award program in his honor. Over the years, 12 students who Dr. Hansen mentored and coached have earned the top student recognition award, including this year’s winner, Benjamin Styer,” says Mike Opperman, Dairy Shrine executive director. “This gift will ensure continuation of our senior student recognition program for years to come.”
Before his retirement in 2024, Hansen was Distinguished Teaching Professor at the University of Minnesota, earning accolades for his ground-breaking research in dairy genetics and ability to inspire excellence among both graduate and undergraduate students. Hansen’s influence has had a ripple effect throughout the industry as his 800-plus former advisees at the University of Minnesota have gone on to their own achievements and dairy leadership roles.
During his 43 years at Minnesota, Hansen focused attention on developing the full potential of every student. To that end, he helped launch the Gopher Dairy Club in 1982, shortly after joining the University of Minnesota faculty. Hansen remains involved in the University of Minnesota dairy program as a volunteer judging team coach and assists with student recruitment.
“The dairy industry has been my life, and Dairy Shrine has always been a part of it,” says Hansen, reflecting on his decision to contribute $100,000 to the organization. “I’m proud to say that several past and current Dairy Shrine board members are my former students. I know the money will be well used.”
