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Forecast Update
Our monthly price outlook
accompanied by brief
and balance sheets.
August 6, 2025
2 PROPRIETARY AND CONFIDENTIAL
The Open
•Global milk production leans towards the positive, though EU output remains a risk. USDA's June Milk Production report
showed output up 3.3% year-over-year along with some upward revisions to May data (+2.3% instead of +1.6% and 20,000
more cows). Cow power and economic incentives for growth are in place in the US. New Zealand is setting up for another
positive season. Though June is near the seasonal lows of volume, output jumped. Looking ahead, producer margins are good.
Pasture conditions look favorable. That should keep milk growing. There's less optimism in the EU. Between drought and
disease, the EU has had its fair share of challenges. Expectations for the region are less than +0.5% growth for the rest of 2025.
•Cheese capacity seems to be more on track, but the whey situation is less clear. It seems there's plenty of cheese available
as new capacity investments continue to ramp up. While the market isn't really asking for more for cheese, it's jumping up and
down for more whey solids. Whey supplies are tight across the board, led by very strong interest in functional high protein
whey. Demand for dry whey is far less intense with uncertainty around exports given the volatile trade picture.
•Butter stocks are below year-prior levels, exports remain strong and domestic demand has been decent. Yet the market
and could remain that
way into year-end. That's giving market participants some belief that we can churn our way into additional supply.
•Domestic demand is lukewarm, with upper-income households still doing most of the spending. Placer.ai data shows Q2
foot traffic at pizza and burger chains hovering around flat to last year. Retail demand has been mixed, with soft cheese sales
ost
consumer confidence, but things will probably remain volatile.
•Demand underwhelms while supply tilts positively. We see lower cheese and dry whey prices next year versus 2025. In the
Class IV space, butter supply will likely be sufficient, but export potential keeps some support in the market. We think
tighter balance sheets in the global powder marketplace will offer support in the high-120s to low-130s.
3 PROPRIETARY AND CONFIDENTIAL
Favorite Look #1: Beef Income Boosts Dairy Finances
•Cattle prices continue to make new
highs on tight animal supplies and
persistent strong beef demand.
•This situation continues to enhance
dairy farm income as producers cash in
on high prices for bull calves, beef x
dairy animals and cull cows.
•Our estimates show beef income now
running above $4 per hundredweight.
•Over the first half of 2025, our model
shows beef revenue averaging $3.76 per
hundredweight. That represented 15% of
total revenue, up from an average of 8%
over the previous five years.
•Milk revenue was above average, too.
•For now, we see the beef boom as
pro-growth for dairy production (even if,
are scarce.)
4 PROPRIETARY AND CONFIDENTIAL
Favorite Look #2: No Growth For Big Pizza & Big Burger
•US restaurant traffic remains lethargic
as consumers tighten their belts and
avoid ever higher menu prices.
•According to Placer.Ai data, foot traffic
into seven large pizza chains was flat in
Q2 2025 when compared to Q2 2024.
That was marginally better than the
slightly negative showing in Q1.
•Similarly, visits to eight leading burger
chains remained in negative territory.
•Will concerns about inflation and the
economy continue to drag on visits?
It’s difficult to get excited about
domestic cheese demand if two of the
big consumption segments aren’t
showing much growth.
5 PROPRIETARY AND CONFIDENTIAL
•According to data from the Federal
Reserve Bank of Dallas and the
Department of Homeland Security, the
US saw net unauthorized immigration of
8.5 million persons between January
2021 and December 2024.
•Over the same period, according to the
US Census Bureau, the total US
population increased by 9.2 million
(+2.8%). Compare that to the four years
prior, from January 2017 to December
2020. Unauthorized immigration totaled
1.6 million persons, with the total
population up by 6.2 million (+1.9%).
•Cheese demand increased by a greater
amount from 2021-2024 than 2017-2020
even as per capita growth slowed.
•It sems possible that food demand
growth could slow in the years ahead
simply as a function of population
trends.
Favorite Look #3: Will the US Have Fewer Mouths to Feed?
6 PROPRIETARY AND CONFIDENTIAL
•
fundamentals. We still believe that milk
volumes and solids are shaping up to be in
growth mode to close out 2025 through the
flush period of 2026.
•More milk should fill new cheese capacity,
bringing more cheese and whey solids to the
marketplace. Cheese production outpaces
domestic demand, softening the annual
cheese price to $1.67 in 2026 from $1.77 in 2025.
•Whey solids are likely to continue to be
prioritized towards the very strong high
protein whey markets, limiting dry whey
Uninspiring demand against flat output
means lower prices next year.
•On the Class IV front, we think light production
and tight stocks puts support under the
market while uninspiring demand keeps
things rangebound.
The Forecast Model and Assumptions
7 PROPRIETARY AND CONFIDENTIAL
Cheese Outlook Bullish
•New production capacity
not yet fully utilized.
•Record high June exports
expanding 34% year-
over-year.
Bearish
•
feed cheese plants.
•Growing stock levels.
•Uninspiring retail and
foodservice demand.
Our Take
Cheese is available
and more is on the way. US
demand? Ho-hum. Exports
are growing but the weight
of supply will soften prices
into 2026.
8 PROPRIETARY AND CONFIDENTIAL
Butter Outlook Bullish
•US prices still competitive
in the global market.
•Double the average
stock draw down from
May to June.
•Seasonal demand.
Bearish
•Exports soften allowing
stocks to build.
•Butterfat supplies stay
strong off the farm.
•Spot cream multiples still
trail historical averages.
Our Take
here, especially if exports
tick higher. But cream is
still available, which helps
take the edge off.
9 PROPRIETARY AND CONFIDENTIAL
NFDM/SMP Outlook Bullish
•Rising peso stirs up better
demand out of Mexico.
•Summer heat and new
cheese plants pull milk
out of NDM production.
Bearish
•Lackluster domestic and
export demand.
•Milk supply gains exceed
cheese plant needs.
•Slight improvements to EU
milk supply outlook.
Our Take
The market seems
balanced demand is
weak, but so is output.
Expect supply to tighten as
new cheese plants pull milk
in earnest in 2H.
10 PROPRIETARY AND CONFIDENTIAL
Dry Whey Outlook Bullish
•Strong high-protein whey
markets limit dry whey
production.
•Delays to new capacity.
•Stocks remain near
all-time lows.
Bearish
•Unimpressive domestic
interest plus unclear trade
policy leaves 2H demand
uncertain.
•New capacity eventually
ramps up.
Our Take
Demand is so-so, but
enough to support prices
against lighter supply and
delays to new capacity.
Supply increases in 2H
keep a price rally in check.
11 PROPRIETARY AND CONFIDENTIAL
12 PROPRIETARY AND CONFIDENTIAL
Jun 2025 Volume
MOM
Change
YOY
Change
YTD YTD YOY
Rolling 12
Month
Rolling
YOY
Beginning Stocks 365 +8.3% -4.0% 303 +4.2%
Production 185.5 -12.5% +10.4% 1,262 +4.6% 2,291 +5.8%
Imports 6+0.5% -45.8% 59 -17.2% 160 +22.2%
Total Supply 556 +0.2% -0.5% 1,685 +1.7% 2,754 +6.5%
Domestic Use 187.5 +5.0% +7.2% 1,112 +4.2% 2,368 +7.2%
Exports 14 +22.2% +100.4% 68 +108.1% 106 +76.5%
Total Use 202 +6.1% +10.8% 1,180 +7.3% 2,474 +9.0%
Ending Stocks 354 -2.8% -5.9% 301 +2.7%
Million Pounds; USDA, Ever.Ag Insights
US Butter Balance Sheet
Jun 2025 Volume
MOM
Change
YOY
Change
YTD YTD YOY
Rolling 12
Month
Rolling
YOY
Beginning Stocks 1,409 +0.4% -1.7% 1,380 -5.7%
Production 1,203 -3.9% +4.2% 7,262 +1.7% 14,368 +1.1%
Imports 33 +21.3% -6.0% 216 -0.5% 472 +4.4%
Total Supply 2,646 -1.4% +0.8% 8,887 +1.1% 16,220 +0.6%
Domestic Use 1,119 -3.5% -0.3% 6,772 -0.4% 13,655 -0.2%
Exports 115 +1.2% +34.4% 648 +11.1% 1,190 +11.2%
Total Use 1,234 -3.1% +2.2% 7,420 +0.5% 14,845 +0.6%
Ending Stocks 1,412 +0.2% -0.4% 1,380 -5.2%
Million Pounds; USDA, Ever.Ag Insights
US Cheese Balance Sheet
Jun 2025 Volume
MOM
Change
YOY
Change
YTD YTD YOY
Rolling 12
Month
Rolling
YOY
Beginning Stocks 250 -8.0% -1.0% 233 +0.7%
Production 194 -10.5% -1.4% 1,164 -6.9% 1,657 -1.3%
Imports 0#DIV/0! 0 0 -65.4%
Total Supply 443 -6.7% -1.2% 1,414 -5.9% 1,890 -1.1%
Domestic Use 76 -14.8% +0.6% 397 +5.8% 642 -16.2%
Exports 131 -4.0% -1.7% 734 -11.6% 1,544 -8.0%
Total Use 207 -8.3% -0.9% 1,130 -6.2% 2,186 -10.6%
Ending Stocks 237 -5.2% -1.5% 233 +2.7%
Million Pounds; USDA, Ever.Ag Insights
US NDM Balance Sheet
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opinion of its author and not necessarily of Ever.Ag and is intended for
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