Dairy markets have taken a hit, with prices dropping across the board.

Global economic uncertainty, tariff concerns, and weak demand have sent prices for cheese, butter, nonfat dry milk, and whey tumbling. Our team tackles this and more, including:

Pricing market predictions by dairy product category

Tariffs and demand changes for U.S. products

Global strategies to diversify supply chains and potential long-term impacts

A potential shift on feed strategies and butterfat production

Don't miss Ted Jacoby III and his expert panel's market discussion on what's going on and what may be coming next.

Listen now to The Milk Check.

Intro (with music)

Welcome to The Milk Check, a podcast from T.C. Jacoby & Co., where we share market insights and analysis with dairy farmers in mind.

Ted Jacoby III:

Welcome everybody to this month's version of The Milk Check. We're going to have an old-fashioned market discussion this month. Joining me today is Diego Carvallo, Director of Dry Ingredient Trading, especially on the international side, Greg Scheer, our Milk Marketing Manager, Jacob Menge, Vice President of Risk Management and Trade Strategy, Jared Miklasz, Sales Manager for the UFC Group, UF Milk and Cream, Joe Maixner, Director of Sales for Dairy Ingredients, and our Head Butter Trader, Josh White, our Vice President of Dairy Ingredients, and Miguel Aragon, Director of International Cheese Sales for Latin America. We're recording March 7th.

Before we get started, let me say this: stick around, and don't go when we start to say goodbye. We're going to have a Marvel version of this podcast. After we said goodbye, we ended up having another 15 minutes of conversation. That may have been the best part of the whole conversation. Thanks everybody.

Pretty much every single one of our markets has been down 20 to 30 cents in the last month, whether it's cheese, butter, non-fat, or whey. They all seem to be down 20 to 30 cents. Jake, is this a function of all of the tariff rhetoric coming out of the Trump administration, or is there something else going on?

Jacob Menge:

It's tough to separate the components of what are really driving these markets. I think tariff talk is absolutely part of it. In our last podcast we mentioned that uncertainty just weighs on markets, and there's more uncertainty today than I would say. There was the last podcast we did. The can has gotten kicked on the Mexico tariffs. I'm not sure how many times you can do that.

This time when it happened, we saw it in equity markets, they didn't really pop like they did last time. The can got kicked on tariffs and equities were like, "Oh, okay, good." And when it happened yesterday, equities really just continued. They're crying lower. I'm only bringing that up because this is obviously a macroeconomic-driven dairy and equities market.

Tariffs are part of the problem, but demand is just poor, according to everything we've seen. I think we'll hear from all of our product traders. That is certainly a factor, but it’s tough to blame anything.

Ted Jacoby III:

All right, well, let's start with butterfat today. I'm going to ask Jared and Joe together. The butter market is down 20 to 30 cents, and the cream market has been ugly since Christmas. What's going on on the demand side? Will this market stay this way all year, or is it a classic seasonal phenomenon?

Because if there's one market that's probably the most insulated by the tariff talk, it would be the butter market, but butter, if anything, it almost feels like the heaviest of all of our markets right now.

Jacob Menge:

There are certainly quirks in each market. Dairy is not the only one seeing that, though, so if I had to lean one way or the other, yeah, there are macroeconomic influences in that demand piece.

Jared Miklasz:

Butterfat numbers are still hanging out somewhere in the 4.5% range compared to they're about a year over year 2.