Key Takeaways:
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Dairy markets were mixed over the past month. Component levels are reaching record highs, and milk production is improving seasonally, with the spring flush well underway. However, as supply is growing, so are concerns over demand. Since the start of the year, a mix of trade tensions, layoffs, persistently high interest rates, and inflation have dampened consumer confidence. This economic uncertainty, paired with heightened market volatility, is weighing on household spending. Meanwhile, significant questions remain around export demand and the potential impact of tariffs on U.S. dairy sales, with shifting global headlines adding to the unpredictability.
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Trade remains a dominant force shaping feed markets, particularly the impact of tariffs on U.S. soybean exports to China. Softer international soybean demand has prompted a shift toward increased corn planting, raising the potential for a record corn crop. At the same time, strong year-to-date corn exports—especially to buyers like Mexico—are supporting expectations for continued demand strength, contributing to recent gains in corn futures. New crop (December 2025) corn futures, which peaked at $4.80 per bushel in February, found support at $4.35 and have since retraced about 70% of that move, now trading near $4.67. With exports holding steady, the weather market approaching, and old crop futures nearing $5 per bushel, producers should consider adding some flexible length if they haven’t already secured cash contracts for the remainder of 2025.
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While margin projections aren’t as favorable as they were at the end of 2024, current levels remain decent. HighGround continues to remind producers to stay proactive, consistently measuring, monitoring, and managing their margins to protect profitability in a shifting market.
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