Milk Prices Lowered, Dry Products Look Strong

Due to a potential leveling out of cow inventories, USDA did not make any large changes to their 2025 milk production forecast.  And when looking at 2026, the Department pulled the milk production forecast back by about 100 million pounds.  USDA World Agricultural Outlook Board Chair Mark Jekanowski said the December milk outlook includes a trade forecast focused on butter.

“U.S. butter supplies are high, prices relatively low under some pressure," he said.  "So that is going to encourage U.S. exports of butter. and discourage imports.”

With strong supplies in most dairy categories, cheese prices were recorded lower both years.  Jekanowski noted the one area showing some strength, including some price strength, is dry whey and other dry products, reflecting relatively strong protein demand in the U.S.

What's The Expectation For Prices?

And when it comes to milk prices for 2025 and 2026,

“Class prices down almost across the board," Jekanowsk said.  "One exception being the Class IV price for 2025, which is up a little bit, five cents cwt, just based on some strength in the nonfat dry milk market. But otherwise Class III, we reduced five cents per pound based on lower cheese prices. All milk price for 2025, we reduced five cents per pound, $21 cwt. In 2026, both the Class III and IV prices were adjusted lower, and the all-milk price was reduced by 50 cents cwt, down to $18.75 per hundredweight, down to $2.25 year over year.”

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