Following a mixed bag of milk prices in July, the August Federal Milk Marketing Order (FMMO) Class and Component Prices report released Sept. 4 indicates milk prices declined for Classes II, III and IV, with Class IV showing the largest drop of 39 cents per hundredweight (cwt) due to butter and nonfat dry milk prices also coming down.

After a nice run of Class III milk prices, July’s forecast price fell more than $1, reflective of a sharp drop in cheese prices from the growing processing capacity that is being met with a hardy supply. 

Following the implementation of Federal Milk Marketing Order (FMMO) revisions, the prices per hundredweight (cwt) of milk sold into the Class III and Class IV markets are expected to rise in June.

Class III and Class IV milk prices are expected to strengthen in May following months of depressed prices based on a preview of Federal Milk Marketing Order (FMMO) milk class prices.

As 2025 progresses, dairy markets remain soft with somewhat mixed – though more bearish than bullish – signals. That said, prices and IOFC have, thus far, held up better than many expected. The scale and duration of current market pressures, however, remains uncertain.

In November 2024, the USDA released their final decision detailing changes to milk pricing under Federal Milk Marketing Orders (FMMO), most of which goes into effect in June 2025. There are multiple changes to the pricing formulas, including changes to make allowances, Class I differentials, milk composition factors, the Class I mover, removing barrel cheese prices from the Class III pricing formulas and provisions for extended shelf-life milk.