Federal Milk Marketing Order (FMMO) uniform milk prices rose 40 cents in February from January’s $17 per hundredweight (cwt) to start the new year. The price improvement is due in part to the USDA’s announcement to purchase dairy products for food banks and nutrition assistance programs across the country.
Administrators of the 11 FMMOs reported February prices and pooling data March 9-13. Compared to January, the month’s uniform prices improved across most FMMOs. Here’s Progressive Dairy’s monthly review of the numbers to provide some additional transparency to your milk check.
Uniform milk prices, PPDs
Regional uniform milk prices are used as a baseline measurement to calculate milk check levels, although not an indicator of the specific milk prices received by producers. In February, uniform prices rose in nine orders and fell in three from January (Table 1), with those orders with a decline in prices pooling a majority of their milk in Class I. The strongest price improvement was in the Pacific Northwest, up $1.30 per cwt to $16.47 per cwt, as the largest price decline was in the Florida and Southeast orders, down 65 cents to $20.65 and $20.14 per cwt, respectively. However, Florida was the highest uniform price paid to producers in February.
The Florida and Southeast Orders were the only two to report uniform milk prices above $20 per cwt, with the remaining orders ranging between $15.52 per cwt in the Upper Midwest Order to $19.69 per cwt in the Appalachian Order. This spread resulted in an average uniform milk price of $17.40 per cwt across all orders and was heavily influenced by the previously announced Class I base price at $14.70 per cwt, the lowest Class I base milk price since June 2020.
Comparing producer price differentials (PPDs) in February, all affected FMMO posted an increase (Table 1). The Upper Midwest FMMO saw the smallest increase of 12 cents to 58 cents per cwt, while the Pacific Northwest FMMO recorded the largest increase of PPDs, up 95 cents to $1.53 per cwt. 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 February
The milk prices were mixed across classes in February:
- Class I base price: The February advanced Class I base price was $14.70 per cwt, down $1.65 per cwt from January and $6.57 per cwt less than February 2025.
- Class I base price zone differentials: 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, February’s Class I prices averaged about $18.82 per cwt across all FMMOs. The highest regional price is in the Florida FMMO at $21.50 per cwt, and the lowest price is $17.30 per cwt in the Arizona FMMO.
- Class I mover formula: The February Class I base skim milk price was $9.99 per cwt, a decline of $1.18 from January. The spread in the monthly advanced Class III milk pricing factor ($9.99 per cwt) and advanced Class IV skim milk pricing factor ($8.72 per cwt) was $1.27, with Class III being the “higher of” and used as the Class I mover in the milk pricing formula.
- Class II: At $15.34 per cwt, the Class II price per cwt increased $1.42 from the previous month but remained $5.74 per cwt less than February 2025.
- Class III: The February Class III milk price climbed 35 cents from January to $14.94 per cwt. Although, it is $5.24 less than February a year ago.
- Class IV: At $16.29 per cwt, the Class IV milk price saw the greatest price improvement, up $2.74 from January. The price was down $3.61 per cwt from February last year.
The gap between February Class III and Class IV milk prices was $1.35 per cwt with incentives for depooling of higher-priced Class IV milk from some FMMO pools.
Component values, tests
The values of butterfat and protein were mixed in February as butterfat prices rose but protein prices fell slightly. February’s butterfat price was $1.78 per pound, up 33 cents from the month prior yet $1.04 per pound below the price in February 2025. The price of protein fell 24 cents from January to $1.94 per pound and remained 59 cents less than the same month a year ago.
The February value of nonfat solids rose $1.12 per pound, up 18 cents from January, and the price of other solids saw no change at 44 cents per pound.
Influencing statistical uniform prices “at test,” February’s average butterfat and protein tests in pooled milk were mixed in FMMOs providing preliminary data. Somatic cell counts in the few FMMOs reporting monthly averages were all up February compared to January data.
Pooling totals
The total milk volume pooled through FMMOs in February was 10.61 billion pounds, about 1.63 billion less than what was pooled in January.
On a volume basis, most classes saw a decrease in the amount of milk pooled during the month of February on both a pound and percentage basis. Class III was the outlier, with pooling totals up 1.53 billion pounds (0.19%) to nearly 5 billion pounds for the month (Table 2), and accounted for 46.7% of milk pooled for the month.
Class I saw no change in milk pooled on a percentage basis but lost 438 million pounds from the month prior. The class total of 3.15 billion pounds accounted for 29.7% of milk pooled in February. Class II and IV reported similar data. Class II reported a loss of 331 million pounds (down 0.01%) from the month prior for a pooled milk total of 1.65 billion, making up 15.6% of total milk pooled. Likewise, Class IV had a month-over-month loss of 2.4 billion pounds of milk (down 0.19%) from January for a pooled milk total of 852 million pounds, accounting for 8% of all milk pooled in February.
Looking ahead
Based on FMMO advanced prices and current futures prices, March regional uniform milk prices should improve:
- Class I base price: As previously announced, the advanced Class I base price rose 77 cents in March from February to reach $15.47 per cwt. March’s Class I base price is $5.55 per cwt lower than March 2025.
- Class I base price zone differentials: With Class I base price zone differentials, 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.
- Class I mover formula: The March 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.
- Other class prices: March Class II, III and IV milk prices will be announced April 1. As of trading March 13, Chicago Mercantile Exchange (CME) March Class III milk futures price settled at $16.18 per cwt, and the March Class IV milk futures closed at $19.35 per cwt. If the Class III-IV futures prices hold, the March Class III-IV milk price gap will be $3.17 with incentives for Class IV depooling.
Other information
- Revisions to the FMMO in 2025 are affecting producer prices based on order and shipping county. (Read: FMMO changes and the impact on producers’ payment)
- Milk prices fell to pressures of overproduction as feed costs held steady in January, resulting in indemnity payments under the Dairy Margin Coverage program. (Read: January DMC margin lands at $7.81 per cwt)
