Positive Outlook for Domestic Dairy Market as Export Concerns Rise
The dairy market is facing a mix of uncertainty and potential as we enter 2025. A recent webinar hosted by the Center for Dairy Excellence highlighted the need for U.S. pricing to be more competitive to improve exports. Despite this concern, there is hope for the domestic market due to the anticipated opening of new cheese facilities and investments within the industry.
Kathleen Noble Wolfley, the market intelligence director at Ever.Ag, emphasized the importance of exports for the strength of the domestic dairy market, especially for classes III and IV used for cheese and butter. If the U.S. is unable to compete globally and increase exports, it may lead to an oversupply of products in the domestic market, putting pressure on prices. The struggles faced by domestic demand for certain classes in 2024 could continue into 2025, affecting the outlets for Class III products.
Looking ahead to the rest of 2025, Wolfley predicts the possibility of weaker prices due to an expected increase in supply. She believes that exports will play a crucial role in shaping market dynamics throughout the year. Despite these challenges, dairy producers had a successful year in 2024, largely due to lower feed costs that helped improve profit margins. Current feed prices and milk futures indicate that 2025 could be another positive year for producer margins, with estimates ranging from $4 to $5 per hundredweight in the Northeast. These decent margins might motivate farmers to continue investing in their farms and operations.
Representative Glenn “G.T.” Thompson expressed optimism about agriculture under the new administration, particularly in light of Trump’s nominee for agriculture secretary, Brooke Rollins. He believes that the new administration’s approach to agriculture could bring positive changes to the industry. The collective outlook of industry experts and representatives is cautiously hopeful about what 2025 holds for the dairy market.
As we navigate the intricacies of the dairy market in 2025, the balance between export competitiveness and domestic stability remains a key concern. While challenges lie ahead, the prospect of new investments and improved profit margins provide reasons for optimism. By focusing on strategies to enhance exports and adapt to market dynamics, the dairy industry can work towards a stable and prosperous future.
