MRV BLOG: MRV Market Commentary July 16, 2025

Check-in here to see the MRV commentary on what we have seen and are seeing in the dairy market.  These insights have been developed from MRV’s proprietary data, industry experience, and industry reports referenced below. Here’s our latest:

Domestic

This month, the dairy commodities have seen butter prices down 20% year-over-year (compared to the same month last year), but sales have increased 43% YOY. Cheddar production surged in May, increasing 9.6% from May 2024 to 355.7 million pounds, the third-highest monthly output on record. The rise was driven by improved milk production and expanded processing in the Central Plains.

U.S. cheese prices have remained relatively steady but somewhat subdued amid the higher production. Spot block prices have ranged close to the averages seen in 2023 and 2024. When CME spot prices climbed above $1.90, they quickly retreated as export demand weakened. Conversely, when block prices dropped below $1.60, buyers moved in to purchase discounted cheese, pushing prices back above that level.

NFDM prices are up 5.6% YOY, but sales are down 14.4% YOY due to seasonal demand being less for Class 1 products.

Exports

U.S. cheese exports have hit a new record in May at 114 million pounds, up 7% from last year. Butter exports more than doubled, topping 11 million pounds. AMF (anhydrous milkfat) shipments cooled off a bit from April’s high but still came in strong at 5 million pounds, more than triple what they were a year ago. U.S. cheese and butter are still priced competitively around the world.

China has placed tariffs on U. S. dairy products: 10% on infant formula, 20% on other dairy and 35% on whey products.

New World Screwworm

The U.S. suspension of cattle imports from Mexico due to New World Screwworm (NWS) outbreaks is not expected to directly disrupt the dairy supply significantly, as these imports primarily involve beef cattle rather than dairy cows. However, the restriction could indirectly influence dairy markets by constraining overall cattle availability, potentially driving up costs for feed or other resources, which may lead to modest increases in dairy product prices. Since the U.S. dairy sector relies heavily on domestic herds, any impact on herd management from limited feeder cattle imports should be minor. The greatest risk is the potential for NWS, a parasitic fly that consumes flesh, to spread to U.S. dairy cattle, which could lower milk output and raise veterinary expenses if containment measures fail. The USDA is using sterile fly releases and monthly evaluations of the ban to address this threat. Extended restrictions might affect U.S.-Mexico dairy trade, especially exports to Mexico, a major market for U.S. dairy goods. While the immediate effect on dairy supply is minimal, indirect cost pressures and the possibility of NWS spreading require ongoing vigilance.

The One Big Beautiful Bill

The new bill delivers key support for U.S. agriculture, particularly the dairy sector. It extends lower tax rates to ease farmers’ financial burden and encourage reinvestment in their operations. It also updates federal programs like Dairy Margin Coverage (DMC) by modernizing production history calculations, making insurance more accurate and equitable for dairy producers, resulting in better pricing.

At the same time, the bill cuts SNAP funding by $186 billion over 10 years—the largest reduction in the program’s history. Stricter work requirements and limits on benefit increases will force many states to reduce recipients or reallocate funds. Because SNAP helps millions of low-income families afford staples like milk, the cuts are expected to lower household dairy purchases. With SNAP driving a meaningful share of grocery spending, weaker demand for milk could ripple through the dairy industry, pressuring prices and disrupting markets.

First Ever Dairy-Based Sports Drink; GoodSport

GoodSport, the first dairy-based sports drink and the only natural option scientifically proven to hydrate better than water and leading sports drinks.

Unlike traditional sports drinks with artificial ingredients and added sugars, GoodSport uses electrolytes naturally found in dairy. Made from ultra-filtered milk, it extracts sodium and potassium, removes protein and lactose, and produces a clear, light, refreshing drink that’s highly effective.

Professional athletes are increasingly choosing GoodSport for its clean-label, performance-driven formula.

Summary:

Butter prices dropped 20% year-over-year, yet sales surged 43%, while cheddar production hit 355.7 million pounds in May, up 9.6% from last year, driven by improved milk output and expanded Central Plains processing. U.S. cheese prices remained stable but subdued, with spot block prices fluctuating between $1.60 and $1.90 due to weak export demand and buyer activity at lower prices. Nonfat dry milk (NFDM) prices rose 5.6% year-over-year, but sales fell 14.4% due to lower seasonal demand for Class 1 products. U.S. cheese exports reached a record 114 million pounds in May, up 7%, while butter exports doubled to 11 million pounds, and anhydrous milkfat shipments remained strong at 5 million pounds. The U.S. suspension of Mexican cattle imports due to New World Screwworm is unlikely to directly impact dairy supply but could raise costs indirectly, with risks of reduced milk output if the parasite spreads to U.S. dairy herds. China’s new tariffs – 10% on infant formula, 20% on other dairy, and 35% on whey – may challenge U.S. dairy exports. The new U.S. agriculture bill supports dairy through tax relief and updated Dairy Margin Coverage but cuts SNAP funding by $186 billion over 10 years, potentially reducing household dairy purchases. GoodSport, a new dairy-based sports drink made from ultra-filtered milk, is gaining traction among athletes.

This information cited by MRV Marketing, LLC is for informational and reference purposes only. It is not intended to be a conclusive statement of future market conditions. It is not legal advice or legal documents. The data used in these documents contains references to information created and maintained by other organizations or agencies. Please note that MRV Marketing, LLC does not control and cannot guarantee the accuracy of these outside materials.

Statistical data referenced here is gleaned from reports by MRV Proprietary Data, CME Group, Dairy Herd Management, USDEC and USDA.