Dairy Production, Demand Expected To Increase

While domestic milk production is expected to go up in 2025 and the following year, according to USDA, so is consumer demand.

“We still continue to see very strong export competitiveness for U.S. dairy products," said World Agricultural Outlook Board Chair Mark Jekanowski. "A lot of strength in both butter and cheese. So fat basis exports as well as nonfat dry milk and whey. So supporting those skim solid basis.”

A slight rise in skim solid imports for both years is also forecasted.  So, what does that mean for prices moving forward?

"This month, we did see a little bit of softening kind of across the board in terms of dairy product prices," Jekanowski said.  "[We] pulled back our cheese, butter, and non-fat dry milk prices this month. Relatively modest reductions. Butter price, for example, for 2025, we reduced 16 cents per pound, but still well above $2 per pound at $2.36 per pound. And for 2026, we still see that price strength continuing. Our butter price forecast is at $2.25 per per pound. Granted, that would be down about 11 cents per pound year-over-year. Similarly, small price reductions this month for cheese, down 3 cents per pound in 2025, 4 cents in 2026, but again, still relatively strong prices, but good export competitiveness in those export markets.”

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