The Federal Milk Marketing Order (FMMO) regional uniform milk prices fell in every order except the Upper Midwest and Pacific Northwest FMMOs. On average, prices stumbled 69 cents per hundredweight (cwt) month over month. Administrators of the 11 FMMOs reported September prices and pooling data Oct. 11-14. Here’s Progressive Dairy’s monthly review of the numbers to provide some additional transparency to your milk check.

Coyne jenn
Jenn Coyne
Editor / Progressive Dairy

Uniform milk prices, PPDs

Statistically uniform milk prices fell in nine of the 11 FMMOs from August to September with the average milk price at $19.60 per cwt, down 69 cents from the previous month (Table 1).

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In reviewing individual orders for September, prices in many FMMOs reached new lows for the year. The California FMMO reported a $1.30 decline to $17.31 per cwt, the lowest uniform milk price in September and the lowest uniform milk price across all FMMOs reported year to date. This was likely the result of Class IV’s unmatched drop in value this fall and the California FMMO pooling more than 60% of its monthly production in Class IV. The Upper Midwest FMMO recorded the second-lowest uniform milk price for the month at $17.94 per cwt, despite a 12-cent improvement from August. Other orders fared better, such as the Florida FMMO, which reported a uniform milk price of $23.28 per cwt, the highest among all orders.

Comparing producer price differentials (PPDs) in September to August, the Pacific Northwest FMMO saw a 24-cent gain, while the remaining orders reporting PPDs all saw declines month over month from 23 cents in the Upper Midwest to $1.37 in the Northeast (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 to the milk check.

Class prices for September

Milk prices in September stumble in comparison to the month prior:

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  • Class I base price: The FMMO advanced Class I base price dropped 23 cents per 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 when the Class I base price was reported at $21.60 per cwt.
  • Class I base price with zone differentials: September’s Class I price should average about $22.82 per cwt across all FMMOs. The highest price is in the Florida FMMO at $25.50 per cwt and the lowest in the Arizona FMMO at $21.30 per cwt.
  • Class I mover formula: September’s base skim milk price for Class I was $9.34 per cwt, an increase of 8 cents from August. The spread in the monthly advanced Class III skim milk pricing factor and advanced Class IV skim milk pricing factor was $1.80, a 1-cent improvement from last month, with Class IV being the “higher-of” used in the formula.
  • Class II: At $17.39 per cwt, the Class II milk price declined $1.79 from the previous month and a staggering $5.01 per cwt from September 2024.
  • Class III: The September Class III milk price rose 35 cents month over month to $17.59 per cwt. The price was $5.75 per cwt less than the same month a year ago.
  • Class IV: At $16.17 per cwt, the Class IV milk price saw the largest dip, down $2.33 per cwt from August and a stark $6.12 per cwt from September 2024.

Component values, tests

Butterfat fell in September due to a surplus of product. The month’s price was $2.19 per pound, down 54 cents from the month prior. Milk protein fell 2 cents month over month to $2.71 per pound. The September value of nonfat solids was also down a nickel to 98 cents per pound from August’s $1.03 per pound. Other solids remained unchanged at 32 cents per pound.

Influencing statistical uniform prices “at test,” September’s average butterfat and protein tests in pooled milk were lower in all reporting FMMOs which provide preliminary data. The largest decline was in the California FMMO, down $1.32 per cwt from August. Somatic cell counts in the few FMMOs reporting monthly averages were slightly less in September compared to August.

Pooling totals

It is unknown if and/or when the USDA will release preliminary September milk production estimates due to the current government shutdown, which began Oct. 1.

Current pooled milk volumes based on the most recent FMMO reports show that pooled volume increased from August to September in all classes except Class III, which reported a 22% decrease in volume. The total milk volume pooled through FMMOs in September was 13.313 billion pounds, 258.1 million pounds more than in August.

Class I pooled milk totals increased month over month by 4.6% (681.1 million pounds) to 3.966 billion pounds; Class II pooling increased 6.5% (899.5 million pounds) to 2.617 billion pounds; and Class IV pooling increased 11% (1.488 billion pounds) to 2.562 billion pounds. Despite a decrease in pooled milk volumes by 22.1% in Class III, the class remained the largest pooling class, representing 31.3% (4.167 billion pounds) of all milk pooled in September (Table 2).


Looking ahead

October uniform milk prices and pooling totals will be announced Nov. 11-14. Based on FMMO advanced prices, the milk price is likely to face headwinds as the industry grapples with increased production and market pressures to move product through domestic and international consumption.

  • Class I base price: The FMMO advanced Class I base price decreased 66 cents per cwt from September to October for a milk prior of $18.04 per cwt. For comparison, the Class I base price was $23.17 per cwt for the same month a year prior.
  • Class I base price zone differentials: October’s Class I prices should average about $22.16 per cwt across all FMMOs.
  • Class I mover formula: The spread in the monthly advanced Class III skim milk pricing factor and advanced Class IV skim milk pricing factor was 77 cents, a $1.03 change from last month with Class III on top and used as the higher-of.
  • Other class prices: October Class II, III and IV milk prices should be announced Nov. 5, pending a resolution to the government shutdown. As of the end-of-trading Oct. 14, the Chicago Mercantile Exchange (CME) October Class III milk futures prices settled at $16.92 per cwt, and the Class IV milk futures settled at $14.25 per cwt. If these prices hold, the October Class III-IV milk price gap will be $2.67 per cwt with Class III on top.

Other information

Check the Progressive Dairy website for updates related to milk production, cull cow marketing, risk management and DMC program margin updates as they are made available through the USDA.