The first milk checks reflecting the Federal Milk Marketing Order (FMMO) revisions are arriving in producers’ mailboxes, reflecting both benefits and drawbacks of the revisions. At the same time, milk prices are softening after several months of relatively strong performances, perhaps the result of increased cow numbers and expanded processing capacity available in the marketplace now, among other influencing factors.

Most of the Federal Milk Marketing Order (FMMO) pricing revisions went into effect in June and will begin to be reflected in July milk checks. Additionally, announced changes to several risk management insurance programs will also soon impact producers’ bottom lines for those enrolling in 2026 coverage. All of this to say that now may be the right time to reevaluate risk management decisions for your dairy operation.

Revenue for dairy producers should climb in June as the trivial markets during the spring are forecast to improve with the income over feed cost margin predicted to settle at $12.60 per hundredweight (cwt). Additionally, the USDA announced upcoming changes to the Dairy Revenue Protection (Dairy-RP), Livestock Gross Margin (LGM) and Livestock Risk Protection (LRP) insurance programs that will affect dairy producers.

The milk market is taking shape with components reaching record highs and milk production climbing with the spring flush, but also with trade wars shaking the grain markets and concerns for domestic dairy demand letting up. Current forecasts predict 2025 dairy margins to be favorable although not as strong as previously anticipated.

The start of the new year predicted favorable margins throughout 2025. But as the spring flush arrives and consumer spending softens some, while at the same time headwinds are expected for the export markets, new concerns have arisen for the remainder of the year.

Small declines in milk prices and climbing feed costs give way to tighter margins as we head into the spring months. Yet, margins are still swaying in a dairy producer’s favor.

The new year is taking shape with risk management policies offering enrollment for 2025 as the 2018 Farm Bill was granted a one-year extension, as well as the Federal Milk Marketing Order (FMMO) referendum passing with the new rule to take effect June 1.

The 2024 year ended with Class III prices showing more traction in December than in previous months as cheese and whey protein prices improved, and Class IV prices remained elevated to reflect strong market conditions.

As we look to the last month of the year, milk prices are trending lower than the previous months’ highs with milk production up year over year, new cheese plants online and holiday buying finishing up noted as a few influencing factors. Yet margins continue to look favorable.