While the market for Class IV milk is still strong, the markets are signaling a retreat is near. The June USDA Announcement of Class and Component Prices report indicated the Class IV milk price falling more than $2 from the month prior, and while the Class III price also fell, the gap between the two is closing as the markets search for balance.
June’s Federal Milk Marketing Order (FMMO) pooling estimates, uniform milk prices and producer price differentials (PPDs) will be released July 9-14.
As previously announced May 20, the FMMO advanced Class I base price reached $22.18 per hundredweight (cwt) for June. Not only was the price up $2.03 per cwt from the previous month, it was also $4.92 per cwt above the same advanced Class I base price of June 2025 and the highest price reported since November 2024.
Announced July 1, June FMMO Class III and IV veered from the momentum of Class I, with both class prices receding from the highs realized in the previous month. Class II was the exception, increasing another $2.50 per cwt from May and $4.35 per cwt above the price reported in June 2025.
June class prices
Other class prices announced July 1 were:
- At $22.78 per cwt, the Class II price increased $2.50 per cwt from the previous month and $4.35 per cwt from June 2025.
- The June Class III price fell 94 cents to $15.98 per cwt. It was also $2.84 per cwt less than the price announced last year.
- Class IV prices collapsed $1.36 per cwt to $20.96 per cwt in June but remained $2.66 per cwt more than the same month in 2025.
The gap between June Class III and Class IV prices closed some from the record gap noticed in May. This month, the spread between the two classes was $4.98 per cwt, still giving incentives to depool the higher-of Class IV milk from some FMMO pools and potentially lowering the blend price dairy producers may receive in an order. Class III has not been the higher of since January.
Component prices dip
All prices for components – butterfat, protein and nonfat solids – dipped slightly from May to June. The value of butterfat was $1.69 per pound, down 1 cent from the previous month and the smallest price decline of the components. The price of protein in June settled at $2.46 per pound, down from May’s $2.75 per pound. And, the price of nonfat solids shrunk to $1.68 per pound, a 14-cent fall from May.
The price of other solids rose a penny to 39 cents per pound.
Looking ahead
Analysts are forecasting milk prices to wane in the months ahead as the market searches for balance among supply, demand and global price competition.
As previously announced, the FMMO advanced Class I base price dipped 85 cents after four consecutive months of rising prices. The dip brought the class price to $21.33 per cwt, the first time since February where the price was lower than the previous month. Although, it remains $2.51 per cwt above the advanced Class I base price in July 2025.
July Class II, III and IV prices will be announced Aug. 5.
As of trading June 30, the Chicago Mercantile Exchange (CME) July Class III milk futures settled at $15.52 per cwt, while the July Class IV milk futures were at $18.25 per cwt. If these prices are realized, the gap between Class III and Class IV would be $2.73 per cwt, potentially the smallest since February, but still adding incentives to depool Class IV.
