Lender surveys from Chicago, Dallas, Kansas City and Minneapolis Federal Reserve districts reflected the pressures of a subdued agricultural economy as interest rates on agricultural loans declined for another straight quarter in the first three months of 2025.

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.

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 USDA’s World Ag Supply and Demand Estimates (WASDE) report offers forecasts for dairy, beef and feedstuffs.

Given current market conditions that have processors thirsty for more milk and despite record-low heifer inventories, there has never been a better time to reassess management strategies and opportunities for profitability. These three focus areas are ones to watch in 2025: heifer inventory management, culling rates and market demands.