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.

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

Making headlines as the calendar moved from April to May 2025: The U.S. and Indonesia sign landmark dairy agreement, USTR calls out misuse of common food names, May FSA interest rates slightly lower and news from two dairy cooperatives.

Dairy producers should anticipate another month of lower milk prices based on a preview of Federal Milk Marketing Order (FMMO) milk class prices. Announced April 30, April 2025 FMMO Class II, Class III and Class IV milk prices were lower than March’s prices.

March’s margin was $11.55 per hundredweight (cwt), the result of a relatively stable feed cost but sinking all-milk price as then-talks of a looming trade war pressured the export market while domestic consumer spending cooled at the same time.

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.

In news affecting dairy producers' bottom lines the last full week of April 2025: May Class I drops to $18.37 per cwt, a final rule reauthorizes the Dairy Forward Pricing Program, IDFA to eliminate artificial colors in school dairy products, and Chobani invests $1.2 billion in New York processing plant.

Fifteen states including Texas, Idaho and South Dakota boosted milk production a combined 303 million pounds in March.