Dairy futures posted fresh lows last week amid forecasts of higher domestic milk production.
The USDA raised its milk production forecast for 2025 to a record 230 billion pounds in its September WASDE report on Friday. The increase was driven by higher cow inventories and faster growth in milking productivity.
Output for 2026 was raised to another record of 231.3 billion pounds, as higher cow inventories and output per cow are expected to carry over into next year.
Fat-basis exports were raised for 2025 and 2026 due to competitive pricing for butter and cheese. Exports on a skim-solids basis were raised for 2025 due to strong whey and cheese shipments.
July dairy product shipments rose seven percent in July compared to a year ago, according to the U.S. Dairy Export Council. Butter exports were the highest monthly volume in over a decade amid record exports to Australia.
Class III dairy milk futures for October delivery fell 3.4 percent last week to a fresh low of $16.32 per cwt. Prices traded slightly higher to start the week on Monday, but could continue to face pressure from two sharp weeks of losses.
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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS.