Dairy producers’ December milk checks are likely to weaken again, based on a preview of Federal Milk Marketing Order (FMMO) milk class prices. Announced on Jan. 2, December 2024 FMMO Class II, III and IV milk class prices were down from November, as was the previously announced Class I base milk price for the month.
December 2024 FMMO pooling estimates, uniform prices and producer price differentials (PPDs) will be released on Jan. 11-14 and summarized on Jan. 15. Watch Progressive Dairy’s website for an update.
December class prices
Class prices announced on Jan. 2 were:
- At $21.28 per hundredweight (cwt), the December Class II milk price is down 24 cents from November but $1.40 more than December 2023.
- The December Class III milk price fell $1.33 from November to $18.62 per cwt. While still up $2.58 from December 2023, it’s the lowest Class III milk price since May 2024.
- At $20.74 per cwt, the December 2024 Class IV milk price is down 38 cents from November. While still $1.51 higher than December 2023, it’s also the lowest since May 2024.
Potentially affecting FMMO pooling, the gap between the December 2024 Class III and Class IV milk price jumped to $2.12 per cwt, the widest spread since April 2024 and again providing strong incentives for depooling Class IV milk.
December FMMO blend prices will be further weakened by a lower advanced Class I base price, previously announced at $21.43 per cwt, down $1.10 from November 2024.
Butterfat, protein values fall
Contributing to the December milk class price calculations, values for butterfat and protein were both down from a month earlier.
The value of butterfat fell 15 cents per pound from November to about $2.91 per pound. It’s the lowest since July 2023.
Meanwhile, the value of milk protein dipped another 35 cents per pound from November to about $1.96 per pound, the lowest since July 2024.
Compared to November, the December value of nonfat solids was up about 2 cents at $1.215 per pound, while the value of other solids rose about 4.5 cents, to 44.9 cents per pound.
Looking ahead
Based on FMMO advanced prices and current futures prices, the outlooks for January regional uniform milk prices are mixed.
Already announced, the January 2025 advanced Class I base price is $20.38 per cwt, down $1.05 from December 2024 and the lowest since June 2024.
January 2025 Class II, III and IV milk prices will be announced Feb. 5. As of trading on Jan. 2, the Chicago Mercantile Exchange (CME) Class III milk futures price closed at $20.36 per cwt for January, up $1.74 from the December price and a three-month high. The January Class IV milk futures price closed at $20.94 per cwt, up 20 cents from December.
If Class III-IV futures prices hold, the January Class III-IV milk price gap will shrink to 58 cents per cwt, reducing but not eliminating incentives for Class IV depooling.
