Key Takeaways:
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Milk prices moved lower over the past month, driven by a sharp drop in cheese prices. As the industry exits the spring flush, growing cheese processing capacity is being met with the highest US cow numbers since July 2021, contributing to ample supply and added pressure on cheese prices. Still, strong domestic demand and steady exports of butter and cheese have helped prevent prices from falling further.
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Feed markets have seen significant declines over the past month, with September 2025 corn futures falling below $4.00/bushel and soybean meal dropping sharply. Favorable weather and excellent crop conditions, with 74% of corn and 70% of soybeans rated good-to-excellent, have fueled expectations for large US harvests. Strong US corn exports have supported demand, but soybean exports may face pressure from Brazil’s record crop. With a lot of uncertainties still ahead, HighGround has been encouraging clients to take advantage of this window of opportunity to secure favorable pricing and strengthen margin outlooks ahead of harvest.
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Margin projections remain historically strong, with current market conditions still offering solid opportunities for profitability. Despite lower milk prices, reduced feed costs are helping support favorable returns, and HighGround continues to see opportunities for producers to lock in positive margins.
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