In this May 2025 edition of Forecast Update Live, the Ever.Ag team dives into the latest dairy market dynamics with insights from Erica Maedke, Matt Gould and Phil Plourd. Hosted by Jon Spainhour this month’s discussion highlights:
🟢 Bull vs. Bear: Erica and Matt break down the opposing market forces—strong export demand vs. weak domestic performance
📉 Domestic demand challenges
🌍 Signs of milk supply recovery in Europe and its potential market impact
📊 U.S. export strength with record cheese and butter shipments
🌡️ Weather risks ahead: How early-season heat could stress U.S. milk supply
💡 Consumer sentiment and inflation expectations: What Phil’s watching this month Whether you’re a dairy producer, processor, or market analyst, this episode offers valuable context for navigating today’s complex dairy environment.
🔔 Subscribe for monthly updates and expert dairy market analysis! Email us at Insights@Ever.Ag.
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Future trading involves risk and is not suitable for all investors. Content provided in this segment is meant for educational purposes and is not a solicitation to buy or sell commodities.
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Hello and welcome to Forecast Update Live, a video series from ever again sites where each month we gather or discuss our dairy market forecast. I’m your host, John Spain. Our. We’re joined today by Erica McKee, Matt Gold and Phil Plourde to get us started. Erica, let’s run through the highlights of this month’s forecast compared to last months.
00;00;30;08 – 00;00;42;16
This month, we are largely unchanged from last month. As we look at the markets, there’s not a lot of new news to move our thinking. A little bit of smoothing in the nearby, but for the most part we are holding steady.
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Thanks, Erica. Each month, we ask our panel to take either the bull side of the story or the bear side of the story. This month, Matt’s taken the bears out of the story.
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Yeah, thanks, John. Also credit to the forecasting team for holding a forecast steady given all the commotion. I guess we’ll describe it that way. What’s going on here in the markets? Yeah, so so the bear side of the story, John, I think is largely focused on, on domestic demand, which by many of our contacts accounts, particularly those that are facing the food service sector, is quite poor.
00;01;16;02 – 00;01;41;12
And we’re seeing consumer sentiment deteriorate. We are seeing continued weakness, particularly a quick service restaurant, and that just the domestic demand environment is not firing on all cylinders, not firing on four cylinders, not firing on two cylinders. I mean, it’s a it’s a struggle out there. And so that leaves us in a situation where our markets are very, very dependent on exports right now.
00;01;41;13 – 00;02;00;20
And so then that leads to my second, you know, the bearish argument, which is we are finally seeing a milk supply response begin to show up out of Europe. And the latest milk supply data is showing somewhat of a recovery. We have been able to balance our market, which has been troubled, I guess, by the domestic demand situation, by export.
00;02;00;20 – 00;02;20;22
And the reason why we’ve been able to export is because our product has been on sale where our our butter and cheese and nonfat and dry way now have been at discounts to the rest of the world. And that’s helped us clear product. The reason why we’ve been at a discount to the rest of the world, at least one of them, is that European prices in particular have been high because milk has been tight there.
00;02;20;28 – 00;02;29;08
Should that change, expect us to loosen pretty materially? Because as I started kind of at the opening, there are domestic demand situation is not great.
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Thanks, Matt. All right, Erica, you’re on the bull side of the story today. Let us know what you’re seeing out there.
00;02;34;11 – 00;02;59;16
It is interesting how we both look at two sides of the same coin, and in the same conversations we’ve had with people about how poor domestic demand has been. The flip side is the folks who are export facing are talking about the strength there. And, John, I appreciate you getting up in the morning to follow GTI round by round and to see Southeast Asia step into GDP and a very strong event this week.
00;02;59;18 – 00;03;28;03
So I think there is some underlying strength out there in the globe, not just because US product is a deal, which it is, and the US dollar is bit weaker, making our products an even better deal. So we continue to see strength in the export market. And as we looked at the trade data that came out yesterday, cheese volume I think is the second highest ever 109 million pounds of cheese, leaving the country butter very strong for 10.5 million pounds.
00;03;28;03 – 00;03;53;02
Powders back in the ring around 140. So we’re definitely moving products. I think the other thing to remember is there’s often a delay. So when we start to see price gaps widen, that product doesn’t always ship today. It may ship in four weeks, six weeks. So given the gaps that the US has to the rest of the world, I think there’s still a good volume yet to leave the country.
00;03;53;04 – 00;04;23;16
And then to speak on the milk supply side of things. I think there’s there’s a risk here in the US as we think about heat. Again, it’s summer happens every year. We have heat waves, but it’s going to be 80 in mid-May here in green Bay. So this frozen tundra is not going to be so frozen. So just something to keep an eye on that if we’re looking at milk supplies growing 1.5%, if that’s barely enough to keep up with the demand for the new facilities.
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What happens if we have additional heat this summer? So watch the seasonality. I think that could also play into the bullish case.
00;04;30;04 – 00;04;54;01
Erica, you, Phil and Matt and I all spent a tremendous amount of time with the dairy industry over the course of the last few weeks, either at cheese Con or at ADP. Another successful ADP in my book. Phil, you’re even in Florida right now at an idea for a conference. And I would say that during these times, there really has been quite a dichotomy of thought.
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Erica, you pointed out those that are export facing, pretty supportive, looking at the U.S. prices to cheap. Those that are domestic facing certainly seem to be looking at domestic sales and saying these prices are way too high. The market’s always going to fight its way out. But I just don’t know that we’ve seen this kind of dichotomy in the market in quite a while.
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That’s my take on things.
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The battle lines are pretty clearly drawn.
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Boy I tell you what, you go from one conversation to the other and you just say, I don’t know that those two have talked to each other. Well, along that line. Every month we ask Phil to bring us his favorite look. They’ll take it away and let us know what you’re bringing to us this month. Yeah, this.
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Month is a strange one. So we’ve been talking about consumer sentiment faring poorly recently. The final April reading of the University of Michigan Consumer Sentiment survey was just bad. Just showed us in a glum mood. But part of that survey is they ask consumers, what are your inflation expectations one year down the road? And in April, consumers told the University of Michigan that they expect to see inflation at 6.5% next year.
00;05;57;08 – 00;06;22;07
April of 2026 6.5% inflation. And, you know, we have had those kind of numbers in the past few years. But the most recent number we had was 2.4%. And so consumers in a kind of a not very inflationary environment are saying they expect a big jump in prices over the next year. And that alone is fascinating. But you think, well, well, how could that be.
00;06;22;08 – 00;06;43;00
We just saw two four. And where you get to six five. And I think a few things are work. First of all, I don’t think the average consumer is chicken hawk in the CPI report like we do. You know. Oh what’s the inflation number. They may not know that the official numbers 2.4%. And more importantly, I think that there’s still some very visceral examples of high price items out there.
00;06;43;00 – 00;07;01;22
It’s like well sure, talk about 2.4% inflation, but why am I paying double for the price of eggs? And that was a year ago. Why is my automobile insurance go up, up and up all the time? And so I think that there’s still some very visceral, tangible examples. And the third thing is that we did have massive inflation in 2021 into 2022.
00;07;01;25 – 00;07;16;05
And I think that still stings. So I think we’re kind of out of line with reality, with that expectation. I think we are probably too fearful. But if we’re wondering why sentiment stinks, a consumer who thinks that inflation is going to be triple a year from now, from what it is today, that’s a pretty big reason.
00;07;16;07 – 00;07;24;05
Thanks though. Again, always just an interesting look. And also I appreciate the use of the phrase chicken hawk. So you don’t hear that every.
00;07;24;05 – 00;07;26;24
Day hawking and eggs in the same bit.
00;07;26;25 – 00;07;49;21
Well done sir. That’ll do it for this month’s episode of Forecast Update Live. Thank you to all our panelists. Thank you to everyone on the Ever Egg Insights team for their work on the forecast. And thank you, the viewers, for tuning in. If you don’t receive our forecast update and would like to subscribe. Please reach out at insight at ever Dot egg.
00;07;49;23 – 00;08;01;02
If you like this video, be sure to subscribe on our YouTube channel. Give us a thumbs up and share with a friend. We’ll see you next month for another episode of forecast Update Live.
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