Answers demanded for Trump administration's reported plans to close offices for the Farm Service Agency, USDA Rural Development and more

February’s Milk Production report shows output at 17.725 billion pounds, down 2.5% from February 2024, however adjusting for the Leap Day, output was up 1.0% from a year ago, and the largest percentage gain in two years. The 24-state production, at 16.985 billion pounds, was up 0.9%.

January output was revised up 70 million pounds in the 50 states, resulting in a 0.5% increase from a year ago, instead of the 0.1% originally reported. Revisions added 72 million pounds in the 24-state data, up 0.6%, instead of 0.2%.

February cow numbers totaled 9.405 million, up 15,000 head from January and 62,000 more than a year ago. The January count was revised up 25,000 head. The 24-State count, at 8.963 million, was up 13,000 from January, and 75,000 above a year ago. The January count was revised up 25,000 head.

February output per cow in the 50 states averaged 1,885 pounds, up 6 pounds or 0.3% from a year ago, and up 2 pounds or 0.1% in the 24 State data.

HighGround Dairy (HGD) says this was a per cow record for the month, but “Even more impressive, was the 44 pound increase from January, which is the second-highest gain between these two months since at least 1981.”

Adjusting for component increases, milk production was up 3.5% year over year, according to StoneX which added, “The last time we saw that kind of growth was mid-2021.” It means there’s plenty to make more butter and cheese.

Year over year comparisons are skewed because of the Leap Day, but factoring that in, California milk was down 126 million pounds or 3.7% from a year ago, thanks to a 75 pound drop per cow. Cow numbers were up 1,000 head. Bird flu continues to impact the U.S. Number 1 milk producer and slow its recovery.

Wisconsin output was down 4 million pounds or 0.2%, due to 5,000 fewer cows, though output per cow was up 5 pounds.

Idaho was up 8.4%, thanks to 40,000 more cows and a 44-pound gain per cow. Michigan was up 1.9% on 5,000 more cows and a 16-pound gain per cow.

Minnesota was off 0.4%, on a loss of 8,000 cows, though output per cow was up 25 pounds.

New York was up 1.5% on a 30-pound increase per cow. Cow numbers were unchanged. Oregon was up 1.0% on a 13-pound gain per cow. Cow numbers were unchanged. Pennsylvania was up 1.0% on a 20-pound gain per cow. Cow numbers were down 1,000 head.

Texas was up 6.0%, thanks to 38,000 more cows and a 3-pound gain per cow. Vermont was off 0.5% on 3,000 fewer cows, though output per cow was up 36 pounds. Washington State was down 2.8%, on a 9-pound drop per cow and 6,000 fewer cows.

Dairy cows are staying in the herd longer. The USDA’s weekly Slaughter report shows 52,400 head were sent to slaughter the week ending March 15, down 5,000 or 8.7% from a year ago. Year to date, 591,500 head had exited the dairy business, down 42,000 or 6.6% from a year ago.

The USDA’s latest Cold Storage data reported Feb. 28 butter stocks at 305.5 million pounds, up a hefty 44.8 million pounds or 17.2% from January, up 7.8 million or 2.6% from Feb. 2024, and the second-highest February level since 1994, according to HGD. January stocks were revised down 9.5 million pounds from last month’s report.

American type cheese climbed to 782.9 million pounds in February, up 12.1 million or 1.6% from January’s level, but was down 47.4 million pounds or 5.7% from a year ago. The January total was revised 6.8 million pounds lower.

The “other” cheese category holdings totaled 574.2 million pounds, up 11.9 million pounds or 2.1% from the January level, but down 31.8 million or 5.2% from a year ago. January’s level was revised down 10.7 million pounds.

That put the total February cheese inventory at 1.38 billion pounds, up 24.7 million pounds or 1.8% from January, but down 76.8 million or 5.3% from a year ago. January’s total was revised down 18 million pounds. The report is pretty much viewed as neutral to the market.

The importance of U.S. dairy exports will increase as the spring flush begins and new cheese capacity turns out more cheese to consume. China’s January and February dairy imports rose 10%, compared to a year ago, when adjusted for the leap year. Unfortunately, little to none of that increase came from the U.S. HGD says the import data aligns with strength seen in New Zealand’s data and was primarily driven by fat-based products.

Butter imports totaled 25.6 million pounds in January and 29.1 million in February, up 29.1% and 64.7% respectively from a year ago. Cheese imports reached four-year highs, totaling 32 million pounds in January, down 5.8% from a year ago, and 33.1 million in February, up 44.9%. Oceania dominated market share at 67.5%, says HGD, while the U.S. lost market share.

Whey imports totaled 125.4 million in January and 124.8 million in February, up 19.6% and 48.8% respectively, and were at three-year highs, according to HGD.

“While much of the surge was driven by a push to bring in product ahead of the U.S. tariff exemption expiration, there are also early signs of diversification.”

“The U.S. saw a slight dip in market share, but from a volume standpoint, increased shipments from Turkey, Poland, Argentina and the UK stood out.”

Combined whole milk/skim milk powder imports amounted to 177.8 million pounds in January and 162.7 million in February, down 9.7% and 1.7% respectively. Powder stocks here at home were growing, with NFDM stocks in January up a whopping 41.0% from a year ago.

HighGround stated, "If there were any questions as to why the Oceania market has been so well supported the last six months, this data reinforces the notion of strong Chinese demand. It also highlights the deepening link between China and New Zealand, with notable market share growth across all product classes.”

The March 24 Daily Dairy Report (DDR) pointed out that China’s imports of skim milk powder from the U.S. were down 60% from a year ago in January and there was none in February. “The last time China recorded a zero volume of skim milk powder imports from the United States was in May 2019, toward the end of the previous trade war between the two countries,” the DDR stated.

CME block Cheddar hit $1.6475 per pound Thursday but closed Friday at $1.6350, up 3.25 cents on the week, and 21.75 cents above a year ago. The barrels also finished at $1.6350, 8.50 cents higher on the week, and 20.75 cents above a year ago. 48 loads of block traded hands on the week, highest weekly total since the week of June 26, 2023, and 21 loads of barrel.

StoneX says “While domestic cheese demand remains underwhelming or somewhat quiet, export inquiries are red-hot. How much of this turns into export sales remains to be seen, but we expect strong export data when we get it two months from now.”

Speaking in the March 31 Dairy Radio Now broadcast, broker Dave Kurzawski said the Milk Production, Cold Storage and China’s imports spell stability around current price levels for the U.S. market. U.S. prices remain well below world levels, specifically cheese and butter, so it’s “A live one with good sided trade.”

The milk production and cold storage data is important, he said, but “Given the fact we’re right ahead of a new month and the potential tariff trade war heating up April 2, the markets are broadly indecisive around current levels, but very stable.”

When asked about the depressed powder market, he reminded us that a few months ago, the U.S. price was almost at a record spread above the rest of the world. He suspects that was due to bird flu issues in California where 50% of U.S. nonfat dry milk is made. We came through that, he said, but it does speak to the weak demand that exists, though he doesn’t see prices falling lower. “The million dollar question” is the tariff situation, he concluded, and “No one has the answer.”

Dairy Market News (DMN) reports that Italian style cheese demand remains strong, according to multiple Midwest processors. Other cheesemakers continue to say demand is either quiet or steady so far, despite the spring holidays nearing.

Inventories continue to grow and concern is mounting. Mid-week milk prices ranged from $2.50- under to 25 cents -over Class III. Last year, they were at $6- to 50 cents-under Class.

Class III milk demand from cheese producers is steadier in the West compared to its neighboring region that has a few relatively new cheese plants working toward full capacity. Production is steady to stronger as seasonally strengthening milk production is providing plenty. A few manufacturers have snug inventories for certain varieties, but product is generally available. Retail demand remains stronger than food service. Domestic prices are competitive internationally.

The butter climbed to $2.3650 Thursday, highest in five weeks, but closed Friday at $2.35, up 4.75 cents, and 49.25 cents below a year ago, with a hefty 64 sales.

Central butter makers report that demand is moving at a more brisk pace each week. Domestic retail customers are getting ahead of the spring holiday rush. Buyers outside the U.S., despite potential trading hurdles, are showing more interest in U.S. produced 82% milkfat, unsalted butter. Demand is notably high. Bulk 80% butter is available, as churning has been noticeably active for all of 2025. Cream remains widely accessible. Mid-week multiples were at over 1.00 on the bottom end, which is significantly higher than just a month ago. As plant downtime approaches, butter makers expect cream to remain loose for the foreseeable future, according to DMN.

Cream continues to be far from short in the West. Finding homes for it became somewhat easier recently but many churns in the region are at-or-near capacity. Butter producers are building inventory for third and fourth quarter demand while affordable cream is more readily at hand. Retail butter demand is steady to stronger, while food service is steady to weaker. Competitive domestic prices continues to draw interest from international buyers, says DMN.

Grade A nonfat dry milk fell to $1.14 per pound Tuesday, lowest since May 9, 2024, but closed Friday at $1.1625, up 1.75 cents on the week, and 4.25 cents above a year ago. There were 18 sales put on the board for the week.

U.S. prices are cheaper than the GDT, says StoneX, but weaker skim milk powder demand globally and cheaper EU prices have hurt U.S. exports.

Dry whey closed Friday at 50 cents per pound, unchanged on the week, and 9.75 cents above a year ago, with 3 CME sales made on the week.

A new report from CoBank says “Genetic improvements within the U.S. dairy herd are fueling historic gains in key milk components needed to produce cheese, butter and a variety of other popular dairy foods.”

“While U.S. fluid milk production has remained relatively flat in recent years, butterfat and protein levels within the nation’s milk supply are growing at a record pace as more producers are employing genetics to optimize milk composition.”

The steady upswing in milk components is paying dividends for dairy producers and positioning dairy processors for continued growth. Over 80% of the U.S. milk supply goes into manufactured dairy products that rely on butterfat and protein content. Demand for those two key milk components is rising as $8 billion of new dairy processing capacity is slated to come online through 2027,” says CoBank.

The report adds “The historic pace of change in U.S. milk composition is poised to continue as genetic gains and market incentives will drive butterfat and protein production higher for the foreseeable future.”

In politics, the International Dairy Foods Association (IDFA) submitted formal comments to the Office of the U.S. Trade Representative (USTR) last week, urging the agency to “Reconsider its proposed actions to curb China’s dominance in global shipbuilding and boost shipbuilding in the U.S. While IDFA supports the administration’s efforts to revitalize the U.S. shipbuilding industry, the organization opposes USTR’s proposed penalties as they would severely disrupt U.S. dairy supply chains and damage the global competitiveness of American agriculture.”

“Strengthening America’s shipbuilding is a goal the dairy industry shares. IDFA members have seen firsthand the value of U.S.-owned and -flagged vessels when supply chains are tested,” said Becky Rasdall Vargas, senior vice president of trade and workforce policy at IDFA. “USTR’s proposed actions, however, risk inflicting serious unintended consequences on American exporters, producers and workers by raising shipping costs, rerouting global trade and weakening supply chains, especially for time-sensitive, perishable products like dairy.”

Meanwhile, U.S. Senator Kirsten Gillibrand, Senate Minority Leader Chuck Schumer and Representative John Mannion demanded answers on the Trump administration's reported plans to potentially close the statewide offices for the Natural Resources Conservation Service, Farm Service Agency and USDA Rural Development in Syracuse.

The letter stated, “President Trump and Elon Musk’s so-called “Department of Government Efficiency” is terminating the lease for the building that houses these three agencies, leaving the future of the programs they administer uncertain. The administration has also laid off a number of workers, leaving New Yorkers unable to reach New York-based staff at the USDA over the phone.”

Lee Mielke is a graduate of Brown Institute in Minneapolis, Minnesota. He’s formerly the voice of the radio show “DairyLine” and his column appears in agricultural papers across the U.S. Contact him at lkmielke@juno.com.