LUBBOCK, TEXAS (RFD NEWS) — Wholesale dairy prices sent mixed signals late in 2025, with falling cheese and butter values offset by firmer prices for nonfat dry milk and dry whey — a combination that points to tighter margins for many dairy operations heading into 2026.
U.S. Department of Agriculture (USDA) data show weaker pricing for major fat-based products while protein markets remain comparatively supported.
From mid-December to early January, prices for 40-pound Cheddar blocks dropped more than 13 cents to $1.41 per pound, while wholesale butter fell nearly 9 cents to $1.43. In contrast, nonfat dry milk and dry whey prices increased modestly. CME spot prices generally tracked those trends, with cheese and butter averaging below recent USDA wholesale levels.
International markets showed similar divergence. Oceania butter and skim milk powder prices declined from November to December, while export prices for Cheddar cheese and European dry whey strengthened. U.S. butter and cheese remained competitive globally, though U.S. prices for nonfat dry milk and dry whey exceeded international benchmarks.
Supply-side pressure continues to build. November milk production (PDF Version) rose 4.5 percent year over year on higher cow numbers and productivity, while the all-milk price fell to $19.70 per hundredweight. USDA forecasts 2026 milk production at 234.3 billion pounds, with lower Class III prices expected to weigh on returns.
