Class III and Class IV Milk Prices, Mandatory Labeling, Farm Bill Update

Today we talk about how Class III and Class IV milk prices are getting closer, the ongoing debate over mandatory country of origin labeling, and an update on the Farm Bill.

Transcript

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Hello and welcome to Chat BDC. Here's the top stories from Blackmaid Daily today, which is Friday, August 6th. We're gonna focus on Class 3 and Class 4. Milk Prices getting closer together. Battle between voluntary and mandatory labeling and an update on the farm bill. So let's get to it. Starting in dairy markets with a look at milk prices as market headwinds are developing for U.S. dairy in terms of production output, dairy products, demand, and price competition from other global players. Class III and Class IV milk prices are inching closer to equilibrium. For the second consecutive month, the gap between the two class prices is narrowing, and July marked the first time since March that the gap was less than $3 per 100weight. As reported in the July USDA announcement of class and component prices released August 5th. As previously announced, the Federal Milk Marketing Order Advanced Class 1 base price for July dipped 85 cents from the month prior to $21.33 a hundredweight. This is the first time since February where the price was lower than the previous month, although $21.33 per 100 weight remains $2.51 a hundredweight above the advanced class one base price in July of last year. The July Federal Marketing Order Class 2, 3, and 4 prices followed suit as all classes fell from the previous month. While the price difference for Class 2 and 3 from June to July was less than a dollar, class 4 realized the sharpest decline of $2.62 per hundredweight from the previous month. At $21.89 a hundredweight, the Class II price decreased $89 per hundredweight from the previous month and was two dollars and fifty one cents per hundredweight below the price recorded in July 2025. Class III price fell $46 to $15.52 a hundredweight, which is a dollar eighty per hundredweight less than the price announced last month. Class four prices stumbled two dollars and sixty-two cents a hundredweight to eighteen dollars and thirty-four cents, bringing the zert the July milk price to fifty-five cents less than that of July 2025. The gap between Class III and Class IV prices narrowed to $2.82. July's price gap is now the sixth consecutive month where Class IV was on top, giving incentives to de-pool the higher of Class IV milk from some milk marketing pools and potentially lowering the blend price dairy producers may receive in an order. The price for components slipped in July compared to June. The value of butter fat was a dollar sixty-seven per pound, which was down two cents from last month, and the smallest price for the component since January 2026. The price of protein in July came to $2.32 per pound, which was down from June's $2.46 per pound. Moving over to livestock markets, the debate over how American beef is labeled at the grocery store is back. The proposal arrives at a critical juncture. Congress continues to negotiate the next farm bill, a little bit more on that later, and trade officials are already looking ahead to the scheduled 2026 review of the US-Mexico-Canada agreement. The push for mandatory labels has exposed deep long-standing divisions within the cattle industry. Proponents argue that mandatory laboring labeling is a matter of consumer rights and fair competition, while opponents counter that resurrecting a mandatory system will trigger massive compliance costs, inflate grocery bills, and spark an international trade war. The proposed amendment to the farm bill would require country of origin labels on all beef sold in U.S. grocery stores. For supporters, the amendment represents a simple, transparent fix to what they describe as a distorted marketplace. Without a federal mandate, proponents argue voluntary programs fail because meatpackers have no financial incentive to participate. Processors prefer to keep Origin vague so they can blend domestic and cheaper imported beef without consumers realizing the difference. Finishing up an Ag Policy News, a Senate Ag Committee's final farm bill markup vote failed Thursday, 10 to 11, leaving discussions open until the committee returns after the Senate's September recess. Most amendments were redecided on 12 to 11 party-line votes favoring Republicans. While many farm policy provisions enjoyed bipartisan support, disagreements over SNAP kept members voting with their parties, defeating most Democratic amendments and leaving no path for the farm bill to move forward in August. Republicans faced a difficult task trying to advance the bill, given that Senator Mitch McConnell remains out after a fall, and Senator Tommy Tubberville left the meeting before the final committee vote. The two successful amendments were the 34 Amendment and block package, which is the manager's amendment, and a 16-7 vote in favor of mandatory country of origin labeling, which we just talked about. Well, that's all for now. As always, thanks for tuning in to ChatBDC. If you found it useful, drop a comment. Be sure to check out BlackDrok Daily.com as well for the full stories between these topics, and don't forget to sign up for the Black Dirk Daily newsletter. I'll be back Monday with more business news about egg and financial markets.