It has been a dramatic and volatile week, both in and out of the dairy markets. All eyes have been on the developing conflict in the Middle East and analysts have been scrambling to deduce the impact for the dairy market. Outside of drastically reduced dairy demand in the Gulf States, concerns are circulating around two key issues. Firstly, freight rates have soared as standard shipping routes...

Butter futures jumped this week on the heels of a bullish Cold Storage report. USDA pegged January 31 butter inventories at 215.4 million pounds, down 17.4% from the year before. Domestic butter demand was robust and exports were strong enough to offset the significant growth in U.S. butterfat output. More recently, though, USDA’s Dairy Market News reported that butter churns are running “seven days a week… at or near max capacity.” And manufacturers tell Dairy Market News th

February weather and February trading have been unusually mercurial, with a mix of frigid lows, massive snowstorms, and warm, sunny skies. On LaSalle Street this week the Class III markets ran hot and then cold as traders digested news about international prices, government dairy purchases, and dairy exports. Butter, milk powder, and Class IV futures caught fire and stayed hot all week thanks to almost daily doses of bullish news.

It was another dramatic week on LaSalle. Seemingly inspired by the Olympians in Milan-Cortina, the markets underwent their own fits of athletic prowess as they jumped, twirled, and in some cases tumbled. The market tone is unsettled as buyers and sellers are going head-to-head. By the conclusion of Friday’s spot session, every commodity sat at a lower price than a week prior. However, that simple conclusion belies the volatile activity that occurred over the course of the wee

What has gotten into the nonfat dry milk (NDM) market? NDM prices have been climbing since January, but the trajectory accelerated meaningfully this week. After taking a brief respite on Monday, the spot price for NDM rose every day between Tuesday and Friday, delivering an 18¢ increase, and qualifying as the commodity’s strongest week since May 2007. Prices settled at $1.64/lb. on Friday, which is not only the highest price since August 2022, but is also a comfortable 16.75¢

After rising unabashedly last week, the resolve of dairy markets was tested in recent days with mixed results. The CME was abuzz with activity as buyers and sellers gathered to test the limits and fortitude of the market’s newfound vigor. 

This weekend’s impending winter storm isn’t the only blanket of white settling across the U.S. Milk production continues to surge across the country with production rising to 19.568 billion pounds in December. This represents a 4.4% increase over the same month last year and means that when full year data was tallied, U.S. producers made 2.8% more milk in 2025 than during the prior year, after accounting for leap day. Most states saw production rise, but the biggest increase

The dairy markets have been swamped under a tidal wave of milk and are now fumbling around for the bottom. After catching a quick breath last week, spot nonfat dry milk (NDM) slipped back under the surface, falling a penny to $1.255. CME spot butter bounced back from multi-year lows, climbing 5.5ȼ to $1.355 per pound. And CME spot Cheddar blocks continued to sink, falling 2.5ȼ to $1.29. Meanwhile, whey remained buoyant. Spot whey powder rallied 3.5ȼ to 73.5ȼ.

The milk powder market is bulking up for the new year. It strengthened every day so far in 2026. The unexpected rally propelled CME spot nonfat dry milk to $1.265 per pound today, up 9ȼ for the week to its highest perch since mid-August. It’s unusual to see milk powder prices climb amid a rapid increase in U.S. milk output. But the dramatic expansion in U.S. dairy processing capacity has reduced the need for balancing. In October, U.S. milk powder output slumped to 148.9 mill

The ball has dropped, the confetti has settled, and the calendar page has officially flipped to 2026. But if you are searching for new year optimism, you may have to look beyond the dairy markets. The market tone remains decidedly bearish as plentiful milk supplies continue to outpace demand.

The U.S. dairy industry is drowning in butterfat. In October, America’s dairy herd cranked out 3.7% more milk than the year before, and cream production soared 5.9% year over year. On Monday, USDA will publish a fresh round of milk production data, and even greater gains are likely. It will be easy to beat November 2024 figures, when avian influenza dragged California milk output down 7.9% compared to November 2023. National average milk output was 0.3% lower than the year be

Winter weather is making life on the farm a little harder in the Midwest, but a growing portion of the herd is now shielded from the elements in state-of-the-art housing. Meanwhile, pleasant conditions prevail in southern dairy areas, where cattle are comfortable in open lots. By all accounts, dairy parlors across the nation are full and so are milk tanks. Strong components ensure that dairy processors can run at full throttle.

The dairy markets are drowning in milk. Across the globe, dairy output outpaces year-ago volumes by wide margins. In New Zealand, October milk output topped the prior year by 2.8%, a substantial increase for the peak of the highly-seasonal Kiwi milk cycle. Nearly halfway through the 2025-26 season, New Zealand milk solids collections were 3.4% ahead of the 2024-25 pace, and all of the surplus will be exported. In China, after 15 months of contraction, milk production rebounde

Milk continues to gush across the United States. In the most recent Milk Production report, USDA pegged October production at 19.47 billion pounds, representing a year over year gain of 3.7%. Growth remains similar to recent months, though USDA did revise the September increase down from 4% to 3.8%. A larger herd continues to drive stronger output, but the tide may be shifting. For the first time this year dairy producers reduced cow numbers by 6,000 head during October, brin

Market incentives have trumped biology and overcome the heifer shortage. Buoyed by several years of positive margins, dairy producers on both sides of the Atlantic have lowered cull rates, added cows, and amped up milk yields. In the U.S., dairy producers added 42,000 cows in August and another 40,000 head in September. Producers who had put off expansions when interest rates first climbed in 2022 eventually moved forward with their plans, and many are just now putting cattle

The commodity markets swung wildly back and forth this week, buffeted this way and that by politics and anxiety. While the U.S. economy continues to expand, growth is uneven. Lower-income consumers are struggling, and many middle-class Americans are watching their budgets more closely. They’re dining out less and seeking bargains when they do. Many shoppers are trading down to store brands or switching to discount retailers. This week, the Trump administration and a federal j

Falling international prices spooked the U.S. milk powder market. At this week’s Global Dairy Trade (GDT) Pulse auction, skim milk powder (SMP) prices fell 0.7% from last week’s GDT event, dropping to a 13-month low of $2,530 per metric ton, equal to nonfat dry milk (NDM) at around $1.22 per pound. Whole milk powder prices slipped 0.9% to a one-year low. Manufacturers in Europe and Oceania are flush with milk, and dryers are...

Dairy markets both in the U.S. and across the globe continue to feel out the balance of supply and demand. Although the dramatic price decreases seen during the last few weeks have given way to more modest movements, the overall market tone remains bearish. Tuesday’s Global Dairy Trade (GDT) auction, albeit glitchy, ultimately saw the GDT Price Index move down 1.4%, the fifth consecutive lower result. The decline in the index reflected lower prices across every product except

The dairy industry is the victim of its own success. Heavy milk output continues to weigh on milk and dairy product prices. USDA’s Dairy Market News reports that in California, milk production tops year-ago levels by a wide margin, “edging into double digits.” The eye-popping year- over-year increase can be partially explained by the onset of the devastating bird flu last year and the healthier herd today. That does not change the fact that the market has significantly more..

As the government shutdown stretches into its second week, the dairy industry continues to operate without access to key data. To this point, the main information gaps for the dairy sector include numbers for trade and dairy product output. However, if the shutdown persists, upcoming reports on milk production and inventories will also be missed, further obfuscating stakeholders’ understanding of market drivers. 

The dairy markets continue to lean bearish, as milk output grows around the world. But that doesn’t mean that prices must move downward constantly. After several weeks of steep declines, the dairy markets regained a little ground this week. On LaSalle Street, traders describe this as a healthy correction in a bear market. 

Milk is absolutely gushing out of the U.S. dairy industry. Milk production reached 19.52 billion pounds in August, up 3.2% from a year ago. USDA revised its estimate of July milk output and cow numbers upward significantly. The agency now reports that dairy producers added 35,000 cows in July and another 10,000 head in August. That put the August milk-cow herd at 9.52 million head, larger than at any time since late 1993 and up 176,000 head from a year ago.

Following last week’s dramatic downward movement, the dairy markets tried to regain some traction this week. Yet, despite a few flashes of stronger prices, the market tone remains overwhelmingly bearish as participants come to terms with the scope of the increase in global milk supplies.

There were no bulls to be found on LaSalle Street this week. The bears roamed freely, showing no fear of an overcorrection even as parts of the dairy complex scored multi-year lows. Red ink poured into the cheese and milk powder trade and deluged the butter market. CME spot butter plummeted to $1.86 per pound, down 16.25ȼ in just five trading sessions. Spot butter is down more than 40% from the mid-summer high, languishing at its lowest level since October 2021, nearly four y

The selloff continued on LaSalle Street this week. Robust production of high-component milk is keeping churns and vats full and weighing on dairy product prices. After the close today, USDA detailed how processors are divvying up the growing milk supply with its monthly update to the Dairy Products report.

The butter market melted down. CME spot butter plummeted 19ȼ this week to $2.045 per pound, its lowest price in nearly four years. Last week’s Cold Storage report showed that inventories were not burdensome as of July 31. But more recent commentary from USDA’s Dairy Market News suggests that stocks are starting to pile up. U.S. butter is the cheapest in the world – by far – and exports remain strong. But America’s dairy cows are simply cranking out too much high-fat milk, esp

The dairy markets have lost that summer sizzle. Prices plummeted this week on the heels of a Milk Production report that confirmed heady growth. Unseasonably cool overnight temperatures and another 10,000 cows pushed milk output upward in July. Production totaled 19.57 billion pounds, up 3.5% from July 2024. Once again, components supercharged the growth. The U.S. dairy herd made 4.7% more butterfat, 4.4% more protein, and 3.8% more nonfat solids than it did last July. 

The backpacks are ready, the bus schedules are finalized, and milk bottlers are ramping up output. It’s back-to-school season in much of the country. But it’s still hot, and milk output is slipping. USDA’s Dairy Market News says milk is tight in the East. In the Central and West regions, output is declining seasonally, but there is more milk than there was a year ago. Cream production is slipping across the nation, but, as ice cream manufacturers wind down, there is plenty of

As summer moves into the home stretch, the spot market for milk is tightening up. The typical seasonal decline in milk production has combined with hot and sticky summer weather in some areas to push down on output. At the same time, bottlers are preparing for the start of the school year and have begun to increase their demand, further reducing milk availability for manufacturers. As a result, processors in the Upper Midwest this week paid a...

The dairy markets are showcasing the colorful – and somewhat morbid – Wall Street adage: “Even a dead cat will bounce if it falls from a great height.” This week milk futures managed a modest recovery, briefly interrupting the dramatic downtrend. Most Class III futures contracts added just a few cents, but the September contract rallied 21ȼ to $17.73 per cwt. Most Class IV futures climbed roughly a nickel. The September contract closed at $19.10.

U.S. dairy producers are keeping cows in their barns rather than sending them to the slaughterhouse. Through mid-July, dairy producers culled 1.38 million milk cows. That’s 310,000 fewer than the 2020 through 2023 average, and it marks the lowest mid-July slaughter since 2008, when depressed cull rates fostered rapid – and ultimately unsustainable – expansion. Heifers are still in short supply. This afternoon, USDA estimated there were 3.5 million dairy heifers on July 1, ste

The dairy markets have lost that summer sizzle. It’s still hot in the Northeast and in states along the West Coast. Milk production is much lower than it was during the spring flush, just as it always is in mid-July. Components have dropped. But in the center of the country, cows are enjoying cool nights and recovering from the sweltering conditions that prevailed a couple weeks ago. Milk yields are bouncing back in the Midwest. Cheesemakers in the region found a few loads of

Trade topics continue to dominate the headlines as the 90-day pause on the ‘Liberation Day’ tariffs came and went this week. While the situation remains fluid, the administration appears to have extended the overall reciprocal tariff pause until August 1, while sending a series of letters to specific countries threatening elevated tariff rates. Many of the countries that received tariff letters are key destinations for U.S. dairy exports, casting further doubt over U.S. dairy

 The heifer shortage and avian influenza reined in U.S. milk output in 2024, fostering lofty milk and dairy product prices in the second half of last year. But after nearly two years of low cull rates and sheer grit, the parlors are full, and so are the milk tanks. In the first 24 weeks of 2025, dairy cow slaughter was 7.7% behind the 2024 pace and 15.6% slower than historic average cull rates. Dairy producers added 122,000 cows over the past 11 months. From coast to coast, b

The invisible hand is solving the heifer shortage. Years of decent profits and the promise of more prosperity on the horizon pushed producers to invest in new barns, forgo some beef calf income in favor of dairy calves, and cull as few cows as possible. Those efforts are adding up. USDA revised its estimate of the April milk cow herd. The agency now shows that dairy p   On the supply side, warm weather is tightening cream supplies as components drop seasonally and ice cream

Strong exports have assuaged concerns about rising U.S. cheese and butterfat output. Even after a significant spring and early-summer rally, U.S. cheese and butter remain the cheapest in the world, putting a firm floor under these dairy commodities. Domestic butter demand is holding strong, but Americans are eating a little less cheese than they did last year.   On the supply side, warm weather is tightening cream supplies as components drop seasonally and ice cream product

U.S. milk and dairy product output is growing quickly. But formidable exports are keeping a firm floor under the dairy markets. Even after sizable spring rallies, American cheese and butter are the cheapest in the world. Exports of those products are strong and likely to remain so. Daily average U.S. cheese exports surged to an all-time high in April, up 6.7% from already-lofty volumes in April 2024. U.S. exporters sent butter abroad at a good clip, but shipments fell well sh

The cheese markets are searching for the ceiling. CME spot Cheddar blocks rallied 7.75ȼ this week to $1.9475 per pound, and they established a fresh seven-month high. Barrels climbed 1.75ȼ to $1.87. Such lofty values were wholly unexpected earlier in the year, when the trade was focused on the impact of new cheese production. But start-up issues have reduced the volume of fresh cheese that meets CME specifications for delivery to Chicago. USDA’s Dairy Market News reports that

For several years the heifer shortage restrained growth in U.S. milk output. But the invisible hand has proved its might once again. Given enough time and economic incentive, industries can turn scarcity into abundance. Dairy producers have managed this feat by culling significantly fewer cows than they did in the past, reducing their need for replacement heifers. In 2023, U.S. dairy producers culled about 35,000 fewer cows than their average in the five previous years. Last

The cheese markets soared. CME spot Cheddar blocks leapt 11.25ȼ to $1.93 per pound, their highest price since January. Barrels followed hot on their tail, climbing 11ȼ to $1.88. The widely anticipated increase in U.S. cheese output is underway, but the ramp up has been slower than expected. Cheese buyers who were waiting for heavy supplies and lower prices to lock in their summer needs are now scrambling to get their hands on some product. USDA’s Dairy Market News notes that

The bulls feasted this week on news of booming U.S. dairy exports and signs that American dairy remains attractive to foreign buyers. Tuesday’s Global Dairy Trade (GDT) auction served as an appetizer. Buyers bid up nearly all products. Compared to the late-April auction, whole milk powder prices climbed 6.2% while Cheddar jumped 12%. Both products notched three-year highs. Not to be outdone, butter rallied 3.8% to its highest-ever price at the GDT. And lactose values leapt 16

Ailing domestic consumption and dimming export prospects have weighed on dairy commodity values, and in turn, milk prices. The April Class III price was announced this week at $17.48/cwt. while Class IV came in at $17.92/cwt., representing the first time since October 2021 that both prices were below $18. Modest relief may be on the way as futures markets currently predict that both Class III and Class IV values will improve slightly later in the year. 

Every week, U.S. dairy producers send about 10,000 fewer milk cows to beef packers than they used to. That’s slowly adding up to more cows in the barn. Even so, dairy cow head counts are not as high as previously thought. After its quarterly survey, USDA trimmed its estimates of January and February milk cow inventories. The agency pegged the herd at...

The cheese markets moved from strength to strength after the early-spring selloff energized exports. U.S. cheese is the cheapest in the world, and shipments to key markets – including Mexico and South Korea – remained formidable through February. USDA’s Dairy Market News reports that, more recently, export orders have been stronger than expected, as Mexican buyers have not been deterred by trade war uncertainty. American exporters are hustling to move cheese abroad, which has

Spring has sprung and the resurgence of allergies isn’t the only sign of the season. Milk volumes are also expanding in most regions as the spring flush moves across the country. Seasonal increases are compounding milk volumes that are growing year over year both in liquid terms and in component values. As a result, milk supplies are plentiful in most parts of the U.S. Demand from bottlers has generally been upbeat, especially as many educational institutions are wrapping up

Tariff drama took center stage again this week as the long-awaited “Liberation Day” arrived. Speaking from the Rose Garden, President...

Dairy producers are doing all they can to keep their barns and milk tanks full, and it shows. In the week ending March 15, they sent just...

The days are getting longer and milk production is climbing. It’s officially spring. The Midwest welcomed in the new season with a few...

The dairy markets are adjusting to the new regime. Trade threats – and new tariffs on U.S. dairy exports to Canada and China – have...

Like a teenager in a bad relationship, U.S. tariffs on goods from Canada and Mexico are on-again, off-again, and then changing their...