Milk Price Trends
Milk
Price movements
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ICE #11 FUTURES PRICES (MAY ‘26)
Month-on-month Change
Year-on-year Change
Key Takeaways
- The front-month price for fresh Class III Milk futures on the CME US [Expana Code MKC3] closed at $0.16/lb on March 26, up $0.01/lb from the previous month.
- Class III and IV prices rose in Week 11 (March 12) on strong finished product demand, before reversing in Week 12 (March 19) as robust milk flows and building inventories created bearish pressure.
- The decline continued into Week 13 (March 26) as spring flush season approached, with Class III settling at $0.1612/lb and Class IV at $0.1927/lb — both down from their Week 11 highs.
- The Expana Benchmark Price (EBP) for Milk EXW Germany [Expana Code: ED24] was assessed at €140/MT on March 26, down €50/MT MOM.
- German spot milk prices fell sharply from €0.14/kg in Week 11 (March 12) to €0.10/kg in Week 12 (March 19), driven by strong regional milk supply and rising seasonal intakes, before partially recovering to €0.14/kg in Week 13 (March 26) as foodservice and retail buying provided some support.
Elevated US Milk Flows
- Milk production remained strong at the start of 2026, up 2.9% in February. This increase comes at a time of typical seasonal downturn ahead of the spring flush season.
- Milk component levels remained robust throughout the period, with the second-largest compositional increase during 2025 seen in November. The elevated butterfat and protein content continues to provide support to cheese and butter production, adding substantial volumes of key dairy solids to the market and enhancing processing efficiency across the industry.
- States like Texas, Kansas, and South Dakota continue to show strong milk production growth to support new and expanding processing capacity.
Rising Finished Product Demand
- US domestic demand for whey protein continues to surge, supporting price levels for Class III fluid milk.
- Export demand for US cheese products continues to accelerate, driven in part by a consistent price discount that US offerings maintain relative to international competitors. This competitive pricing advantage has bolstered Class III milk prices and positioned US producers favorably within global dairy trade flows.
Market Sentiment
Elevated EU Milk Supply
- Milk supply across the EU is expected to remain strong in April, in line with seasonal expectations as the milk season progresses ahead of the anticipated flush in May, according to industry sources. Milder temperatures are expected to continue supporting supply across key EU dairy regions.
- Feed costs are expected to support milk quality throughout the month, with milk fat and protein levels anticipated to remain elevated year-on-year, according to market participants. However, while short-term feed costs remain low, the ongoing conflict involving Iran could add upward pressure on feed costs moving forward, according to market sources.
Steady Recovery
- Buying interest is expected to remain strong in April, according to industry sources, supported by robust consumer and industry demand. Sources indicate that producers will continue to channel additional milk into dairy commodities to ensure sufficient supply during the second half of 2026. Powder stocks across the EU are anticipated to remain tight, with processors expected to continue rebalancing inventories throughout the month, according to industry sources.
Market Sentiment
Milk
Price drivers
Logistics
The Global Shipping 40-foot Container Composite Index rose about 20% MOM in end-March to $2,279/unit, marking four consecutive weeks of increases. Following US and Israeli military action in Iran, energy prices spiked, prompting shipping carriers to apply emergency fuel surcharges to freight rates, driving higher spot rates on Asia-Europe and Transpacific routes.
Market sources expect rates to remain elevated if regional volatility persists. Carriers continue to await demand growth following the Chinese Lunar New Year, which has been slow to materialize.
Feed Costs
Geopolitical tensions in the Middle East and Eastern Europe continue to underpin the market sentiment, sustaining a risk premium across global grain markets. The strategic importance of the Strait of Hormuz is increasingly reverberating through fertiliser markets, adding a secondary layer of support to prices.
In the EU, market participants report that wheat crop conditions currently appear favourable, with development slightly ahead of normal thanks to generally supportive growing conditions across key producing regions. CBOT wheat prices have shown relative strength in March, supported by mounting concerns over Hard Red Winter wheat prospects in the southern US Plains.
Global corn markets are increasingly shaped by input cost pressures and shifting acreage expectations, with fertiliser availability emerging as a key factor influencing both planting decisions and yield potential across major producing regions.
Electricity Prices
Electricity prices in the US and EU changed marginally on average for the month, though volatility throughout March was high, particularly in the EU. Nevertheless, market sources continue to monitor the situation closely, recognizing that risks of electricity price increases remain high.
Milk
Price forecast
Milk US
The price of US milk has declined recently but remains in an uptrend for now. However, we have recently entered the usual milk flush season which runs from April to June roughly. This usually increases the output, pushing for lower prices of milk. This is part of why we expect that prices will decline further in Q2. However, as milk supply has been higher going into 2026, compared to other years, the effect of the milk flush may be smaller. One of the big jokers for milk prices is the current conflict in the Middle East. As we have seen, the effect of the conflict has resulted in higher fuel cost, which could lead to fewer trucks picking up milk and increased cost for doing so.
This could limit supply to dairy producers even though supply is there at the farms. Furthermore, with the shelf lift of milk being only 2-3 days it is not possible to store it. Additionally, as cows need to be milked every day, farmers will still have the cost of production but may be forced to pour it down the drain. They may also experience higher feed cost prices, which again would put upward pressure on prices, especially if they cannot have trucks pick up all the milk. Therefore, the usual decline may be smaller than other years.
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