MilkDA
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About Milk (DA)
Class III Milk futures (DA) track the CME benchmark for milk used in cheese production, the primary pricing mechanism for US dairy markets. Priced per hundredweight (cwt), Class III milk represents about 50% of US milk utilization.
Milk Price Drivers
Milk prices are influenced by global supply and demand dynamics, geopolitical events, weather patterns, currency fluctuations, and economic indicators. Futures contracts traded on exchanges like COMEX, NYMEX, and ICE provide price discovery, while physical market conditions and inventory levels drive spot pricing.
Frequently Asked Questions
- What is Class III milk?
- Class III milk is the US federal milk marketing order classification for milk used primarily in cheese production. It is the most widely traded dairy futures contract and serves as the benchmark for US dairy pricing. Class III milk pricing is based on the value of cheese, dry whey, and butterfat.
- What drives milk prices?
- Milk prices are driven by cheese and butter demand, dairy herd size and milk production per cow, feed costs (corn and soybean meal), global dairy trade (New Zealand and EU exports), government dairy programs, and seasonal production patterns (cows produce more milk in spring).
- How are US milk prices determined?
- US milk prices are set through a complex federal milk marketing order system with four classes. Class I (fluid milk) has the highest regulated price, while Classes II, III, and IV are based on manufactured dairy product values. Most dairy farmers receive a blend price based on how their regional market uses milk.