While 2024 may offer the third-highest milk price on record, sluggish international trade and weaker consumer prices due to high inflation continue to slow growth in dairy product sales. According to Trade Monitor Data, global dairy trade peaked at 11.5 million metric tons in 2021 and fell to 10.9 million metric tons in 2023.

According to the USDA, domestic cheese sales posted a rare 3.5% decline in February. New plant capacity coming online could put downward pressure on Class III milk prices. This compares to a higher price outlook for Class IV milk that has been buoyed by near-record retail sales prices for butter.

The futures market indicates this situation will persist into 2025, resulting in lower milk prices for farmers in high cheese production regions, including the Upper Midwest.

Read more on the changing dynamics of the milk production market here.