FMMO uniform milk prices mixed again in February 2025

Federal Milk Marketing Order (FMMO) regional uniform milk prices were again mixed in February, with a slight reverse compared to January.

Administrators of the 11 FMMOs reported February prices and pooling data, March 11-14. Here’s Progressive Dairy’s monthly review of the numbers to provide some additional transparency to your milk check.

Uniform prices, PPDs

Compared with January, February 2025 statistically uniform milk prices increased slightly in three of the 11 regional FMMOs (Table 1), those with the highest Class I milk utilization. The other eight FMMOs saw small uniform price declines from the previous month.

Among individual orders, the top average was $25.42 per hundredweight (cwt) in Florida, up 38 cents from January. The low average was still in the Upper Midwest FMMO at $20.31 per cwt.

Compared to January, February base producer price differentials (PPDs) were also mixed in the seven applicable FMMOs (Table 1). PPDs have zone differentials, meaning some PPDs could be negative, and milk handlers may also apply PPDs and other “market adjustment factors” differently on your milk check.

Class prices for February

Milk class prices were mixed in February:

• Class I base price: At $21.27 per cwt, the February 2025 advanced Class I base price is up 89 cents from January and $3.28 more than February 2024.
• Class I base with zone differentials: Class I zone differentials are added to the base price at principal pricing points to determine the actual Class I price in each FMMO. With those additions, February Class I prices will average approximately $24.09 per cwt across all FMMOs, ranging from a high of $26.67 per cwt in the Florida FMMO to a low of $23.07 per cwt in the Upper Midwest FMMO.
• Class I mover formula: The spread in the monthly advanced Class III skim milk pricing factor ($10.32 per cwt) and advanced Class IV skim milk pricing factor ($10.90 per cwt) shrunk to just 58 cents per cwt for February. That means that the current but soon-to-be altered Class I mover formula positively impacted Class I prices.

Based on Progressive Dairy calculations, using the Class I mover calculated under the “higher-of” formula would have resulted in a February Class I base price of about $20.83 per cwt, 44 cents less than the actual February price determined using the “average-of plus 74 cents” formula.

The change in the formula back to higher-of calculations – along with zone differential adjustments and other changes – is included in the FMMO changes will be implemented on June 1, 2025.

• At $21.08 per cwt, the February Class II milk price was down 50 cents from January but still 55 cents more than January 2024.
• The February Class III milk price dipped 16 cents from January to $20.18 per cwt. It’s up $4.10 from February 2024.
• At $19.90 per cwt, the February 2025 Class IV milk price was down 83 cents from January to a 12-month low and just a nickel more than February 2024.

The spread between February 2025 Class III and Class IV milk prices fell to just 28 cents per cwt – this month with Class III on top – the slimmest spread since March 2023 and cutting into incentives for depooling milk.

Component values, tests

Pressuring February milk class prices, the value of butterfat fell about 13 cents per pound from January to just under $2.82 per pound, the lowest since July 2023.

Meanwhile, the value of milk protein rose more than 20 cents per pound from January to about $2.53 per pound, a four-month high.

Compared to January, the February value of nonfat solids was down about 4.5 cents at $1.55 per pound, while the value of other solids dipped about 6 cents, to 48 cents per pound.

Affecting statistical uniform prices “at test,” February’s average butterfat and protein tests and somatic cell counts in pooled milk were steady to slightly lower compared to January in most FMMOs providing preliminary data.

Pooling totals

The USDA releases preliminary February milk production estimates on March 21. Despite three fewer milk marketing days than January, more Class IV milk come into the pool in February (Table 2), as depooling incentives declined.

The total milk volume pooled through FMMOs in February was estimated at 12.65 billion pounds, just 11.4 million pounds less than the prior month.

February Class I pooling was down about 465 million pounds from the previous month. At 3.22 billion pounds, it represented about 25.4% of total milk pooled. Class II pooling was up about 84 million pounds, to 1.43 billion pounds, representing about 11.3% of the total pooled.

At 5.34 billion pounds, Class III pooling was down 895 million pounds from January and represented about 42.2% of the total pool. Both were five-month lows, thanks in part to small depooling incentives.

In contrast, February 2025 Class IV pooling increased about 1.26 billion pounds from January to about 2.7 billion pounds, the highest volume since April 2023, and represented 21.1% of the total milk pooled.

Looking ahead

March uniform prices and pooling totals will be announced on April 11-14. Based on FMMO advanced prices and current futures prices, monthly uniform prices will be lower.

• Class I base price: Already announced at $21.02 per cwt, the March 2025 advanced Class I base price is down 25 cents from February but $2.22 higher than March 2024.
• Class I base with zone differentials: Class I zone differentials are added to the base price at principal pricing points to determine the actual Class I price in each FMMO. With those additions, March Class I prices will average approximately $23.84 per cwt across all FMMOs, ranging from a high of $26.42 per cwt in the Florida FMMO to a low of $22.82 per cwt in the Upper Midwest FMMO.
• Class I mover formula: The spread in the monthly advanced Class III skim milk pricing factor ($10.81 per cwt) and advanced Class IV skim milk pricing factor ($10.61 per cwt) shrunk to just 20 cents per cwt for March. That means that the current but soon-to-be altered Class I mover formula again positively impacted Class I prices.

Based on Progressive Dairy calculations, using the Class I mover calculated under the higher-of formula would have resulted in a March Class I base price of about $20.40 per cwt, 62 cents less than the actual March price determined using the average-of plus 74 cents formula.

• Other class prices: March Class II, III and IV milk prices will be announced on April 2. As of trading on March 13, the Chicago Mercantile Exchange (CME) Class III milk futures price closed at $18.59 per cwt, down $1.59 from the February price. The March Class IV milk futures price closed at $18.58 per cwt, down $1.32 from February.

If Class III-IV futures prices hold, the March Class III-IV milk price gap will be just 1 cent per cwt, eliminating incentives for Class III or Class IV depooling.

Other information

• The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released on March 11. The milk production forecast for 2025 is reduced on lower expected milk output per cow more than offsetting slightly higher cow inventories.
• 2024 was a euphoric year for the dairy industry. Whether 2025 can carry the momentum lies in a few key factors. Risk management will be critical. Read Dairy market outlook: Processing, the presidency and international partners
• The enrollment period for the 2025 Dairy Margin Coverage (DMC) program remains open until March 31. Dairy producers can submit applications to USDA’s Farm Service Agency (FSA). 

Also, check the Progressive Dairy website later this month for milk production, cull cow marketing, risk management and DMC program margin updates.