U.S. Dairy Prices Slide as Inventories Grow, Exports Shift

U.S. dairy markets are seeing major softening in domestic prices even as dairy output and some export categories swell.  Butter prices dropped nearly $1 per pound compared with a year ago, while cheddar cheese and other block-cheese prices declined by roughly 40–50 cents.

These shifts reflect both abundant domestic supply and weaker demand for standard dairy products.

At the same time, U.S. exports of value-added dairy, including certain cheeses and butter, surged: butter exports jumped 162%, American-type cheese exports rose 129%, and cheddar exports climbed 131% year-over-year.

Still, trends look mixed: while cheese plants maintained throughput, powder-milk and whey production slowed.  Stocks of key dairy ingredients tightened, especially in dry-milk and whey inventories, even as overall milk production remains high. Analysts warn these market swings — high supply, shifting demand and falling wholesale prices — could squeeze farm margins heading into 2026, especially if global export demand softens.

If you have a story idea for the PNW Ag Network, call (509) 547-1618, or e-mail glenn.vaagen@townsquaremedia.com