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. 

The Federal Milk Marketing Order (FMMO) advanced Class I base price rose 11 cents per hundredweight (cwt) from July to August for a Class I base price of $18.93 per cwt.

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.

Here is the news affecting a dairy farmer's bottom line this third week of May 2025.

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.