As fall arrives and a new month approaches, the dairy industry is buzzing with concern over falling milk prices as domestic supply flows with strong outputs of butter and cheese, and exports remain strong, particularly with cheese products turning out record volumes month over month.

Yes, volatility is here, and it’s likely here to stay. But there are steps you can take to manage through it. Dust off your risk management plan to preserve working capital and discounted core equity, building a resilient business model for the future.

The USDA released a report in early August that forecast record corn yields this fall – production surpassing 16 billion bushels with a record-high yield of 188.8 bushels per acre. The announcement created buzz in the markets, which only further aided dairy producers’ income over feed cost (IOFC) outlook for the remainder of the year.

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.