The Latest: October - 2025
Heavy Milk Output Continues to Weigh on Dairy Product Pricing
The dairy industry is the victim of its own success. Heavy milk output continues to weigh on milk and dairy product prices. USDA’s Dairy Market News reports that in California, milk production tops year-ago levels by a wide margin, “edging into double digits.” The eye-popping year-over-year increase can be partially explained by the onset of the devastating bird flu last year and the healthier herd today. That does not change the fact that the market has significantly more milk to absorb than it did in late 2024 and early 2025.
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A setback is possible, but it’s impossible to predict the timing or magnitude of a retreat from the highs. Seasoned traders warn “Don’t fight the trend.”
View reportFebruary through December contracts posted life-of-contract highs, a sign of health and good cheer.
View reportThere is plenty of fodder for both the bulls and the bears, creating a rather schizophrenic trading market. We’re in a full-blown weather market, and the futures will be as fickle as the forecast.
View reportConcerns about worsening demand are colliding with rising supplies as milk floods the market.
View reportAll eyes were on the CME spot Cheddar markets this week as blocks, and especially barrels, moved decisively lower. Spot barrel prices plunged in recent days and Cheddar spot blocks also moved below $2 for the first time since early September.
View reportCME spot Cheddar barrels climbed to an all-time high last Friday and managed to cling to the precipice on Monday. Then their perch gave way and they plunged over the cliff.
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