News

Little change in dairy supply & demand report

The December USDA supply and demand report had no surprises in the dairy sector.

Milk production forecasts are unchanged from November, but USDA is predicting lower production in 2026 based on higher milk-per-cow being offset by reduced cow inventories.

The butter price for 2025 is expected to go up slightly while the cheese price forecast for this year is dropping based on weakened prices.  Prices for nonfat dry milk and whey for 2025 are unchanged.

Class III milk prices for the year are lowered based on weaker cheese prices while the Class IV price goes up some based on butter demand and additional butter exports.  Class III for December is projected at $18.10 per hundredweight.  Class IV for December is projected at $17.40 per hundredweight.  The December all-milk price dropped to $21.00 per hundredweight.

USDA is also projecting lower consumer dairy product prices for 2026, with cheese falling from around $1.79 per pound down to about $1.67 per pound and butter falling from $2.22 per pound down to about $1.67 per pound.

U.S. imports of dairy products for 2025 are projected to drop based on fewer expected butter imports, while exports on a fat basis are higher because of more butter exports.   Exports on a skim-solids basis are down because of fewer skim milk powder shipments.

USDA says overall milk production for 2025 is projected at 231.4 billion pounds.  The 2026 projection is 234.1 billion pounds.