In the news affecting a dairy producer's bottom line:
- March Class I base price to offer reprieve for producers
- USDA announces plans to purchase $148 million in dairy products
- Fluid milk sales up 1.2% in December
- GDT index is 3.6% higher
- Reminder: Dairy Margin Coverage enrollment closes Feb. 26
March Class I base price to offer reprieve for producers
The Federal Milk Marketing Order (FMMO) advanced Class I base price will offer some reprieve to producers’ milk checks come March, rising 77 cents from the month prior to reach $15.47 per hundredweight (cwt). While the higher price is welcomed, prices have not been this low since March 2021, and this year’s Class I base price is $5.55 per cwt lower than March 2025.
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, March’s Class I prices should average $19.59 per cwt across all orders. The highest regional price is in the Florida FMMO at $22.27 per cwt, and the lowest price is $18.07 per cwt in the Arizona FMMO.
The February Class I base skim milk price was $9.91 per cwt, down 8 cents from the month prior. The spread in the monthly advanced Class III milk pricing factor ($9.10 per cwt) and advanced Class IV skim milk pricing factor ($9.91 per cwt) was 81 cents, with Class IV being the “higher-of” in March and used as the Class I mover in the milk pricing formula. The advanced butterfat pricing factor was $1.69 per pound, up a quarter from February.
The Class I base price and pooling percentages will impact regional FMMO uniform milk prices. February regional prices will be announced March 9-13, with March regional prices announced a month later, April 9-14.
USDA announces plans to purchase $148 million in dairy products
The USDA announced an intent to purchase up to $263 million in agricultural products from American farmers and producers to distribute across the country. This includes $148 million in butter, cheddar, Swiss and other cheese products, and fresh and ultra-high-temperature (shelf-stable) milk.
These purchases are being made through Section 32 of the Agriculture Act of 1935, which allows the USDA to buy surplus, domestically produced agricultural products to stabilize farm products and provide food to federal nutrition assistance programs.
The $148 million in purchases matches the amount requested by the National Milk Producers Federation (NMPF) in a letter sent to the USDA last November, which was followed by extensive conversations and further official communication with the USDA.
“Dairy farmers have shared in the struggles faced throughout the agricultural economy, and these purchases will provide important relief to producers who will benefit from the additional demand, helping them provide nutritious dairy products to Americans and the world,” NMPF President and CEO Gregg Doud said.
Fluid milk sales up 1.2% in December
Fluid milk sales for December 2025 were up from last year, but annual sales ended lower than 2024. According to data from the USDA Agricultural Marketing Service:
- Total sales: December 2025 sales of packaged fluid milk products were estimated at 3.8 billion pounds, up 1.2% from the same month a year earlier. At 42.7 billion pounds, year-to-date sales of all fluid products are 0.9% lower than last year.
- Conventional products: Monthly sales totaled 3.5 billion pounds, up 1.5% from the same month a year earlier. Sales of flavored whole milk were 8.2% higher than last year, and whole milk was up 4.6%. Year-to-date 2025 sales were estimated at 39.7 billion pounds, down 0.8% from last year.
- Organic products: December sales totaled 263 million pounds, down 2.7% than a year earlier. Sales were up 13% for flavored fat-reduced milk but down in all other categories. Year-to-date organic fluid milk sales were estimated at 3 billion pounds, down 1.9% from this time last year. Organic represented about 6.9% total fluid product sales in December.
The U.S. figures are based on consumption of fluid milk products in 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.
GDT index is 3.6% higher
The price index of dairy product prices sold on the Global Dairy Trade (GDT) platform is up 3.6% in the auction held Feb. 17. This is the fourth consecutive event the index moved higher.
Compared to the previous auction, prices for individual product categories were mostly higher. Butter was up 10.7%, and lactose was up 7.8%. Moderate gains were seen in mozzarella (5%), anhydrous milkfat (3.8%), skim milk powder (3%) and whole milk powder (2.5%). Cheddar cheese was the only product to trade lower, down 1%. Buttermilk powder saw little change.
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 March 3.
Reminder: Dairy Margin Coverage enrollment closes Feb. 26
The Dairy Margin Coverage (DMC) program gives dairy operations the opportunity to protect their milk margins for up to a six-year period (2026-31). To participate, dairy producers must apply and update their production history within the enrollment period, which closes on Feb. 26.
Margin forecasts have also been posted for 2026, indicating indemnity payments could be distributed in the first two months of the year. Monthly predicted margins range from just above $8 per cwt for January and February. (Read: 2026 Dairy Margin Coverage enrollment underway, payments predicted)
For more information, visit the DMC webpage or contact your local USDA Service Center.
