Key Takeaways:
-
The commodity markets have experienced notable volatility over the past month, largely driven by ongoing concerns over tariffs and their impact on U.S. trade. These trade uncertainties have contributed to a decline in dairy prices, with all five key CME spot dairy products falling and putting downward pressure on Class III and IV milk futures. Meanwhile, increasing milk production and expanding U.S. cheese production capacity have added to the strain, especially as export opportunities may be limited in the coming months. Additionally, weaker consumer sentiment and spending raise concerns about sluggish domestic demand, further compounding market challenges.
-
Trade concerns have also extended to the feed markets, with expectations that more acreage will shift toward corn rather than soybeans. At the USDA’s Agricultural Outlook Forum, early projections for the 2025/26 crop season forecast corn plantings at 94 million acres—an increase of 3.8% from last year—potentially resulting in a record 15.6-billion-bushel harvest. Meanwhile, soybean acreage is expected to decline to 84 million acres, yielding a 4.4-billion-bushel crop—the fourth largest on record. While both crops are projected to be large, the combination of strong supply and ongoing export concerns, particularly for soybeans, adds a layer of murkiness to the market outlook.
-
The margin between milk and feed continued to tighten this past month as milk prices saw a significant decline. However, favorable margin opportunities still exist for producers to capitalize on. We urge producers to stay vigilant, actively monitor their margins, and take proactive steps to avoid being caught off guard by market fluctuations. Staying ahead of the market will help safeguard against surprises.
Click the button above to view the full report.
