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Dairy production greater than export demand

An economist says record U.S. dairy exports are not enough to boost dairy prices because of higher production.

Danny Munch with American Farm Bureau Federation tells Brownfield that 2025 milk production grew more than demand. “The U.S. all milk price averaged $19.70 per hundredweight in November, and that was down four dollars since early January of last year so milk prices are still dropping substantially.”

USDA estimates the U.S. has about 200-thousand more dairy cows, as farms are keeping cows longer and breeding them for beef calves.

Munch says lower milk prices have made the U.S. more competitive on the global market, with Cheddar cheese prices down 28% and butter prices down 47%. “That puts us far below New Zealand and the European Union prices, which again, moves product overseas, but when prices are that low domestically, and even if it makes us more competitive, we’ve really got to move a lot of it and usually that ends up boosting prices a little bit and making us less competitive so you sort of have this negetive feedback loop happening.”

Munch says market dynamics, such as holding milk cows longer, are increasing the short-term milk supply and suppressing farm-gate prices.

AUDIO: American Farm Bureau Federation economist Danny Munch discusses dairy exports compared to production with Brownfield’s Larry Lee