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.
Farm-Level Takeaway: Mixed product pricing and rising milk supplies suggest margin management will remain critical as 2026 unfolds.
Tony St. James, RFD NEWS Markets Specialist
November 26, 2025 10:41 AM
Low farmer shares reflect deep consolidation across the food chain, keeping producer returns thin even as retail food prices remain high.
November 25, 2025 03:02 PM
·
Strong yields and higher cattle prices helped stabilize conditions, but weak crop prices and rising carryover debt remain major challenges for Eleventh District farmers.
November 25, 2025 02:55 PM
·
Jake Charleston, with Specialty Risk Insurance, joins us now for an industry update and advice for cattle producers as they consider options for managing the risks of a murky market.
November 25, 2025 01:26 PM
·
The National Milk Producers Federation will launch a new advocacy campaign to secure a final vote, urging House lawmakers to approve the bill as soon as they return from the Thanksgiving recess.
November 25, 2025 01:09 PM
·
AFBF Vice President of Public Policy and Economic Analysis, Dr. John Newton, explains the factors contributing to the growing financial strain in the ag sector and the urgent need for swift economic support.
November 25, 2025 12:40 PM
·
Tyson’s Nebraska plant closure and falling Cattle on Feed numbers send cattle markets tumbling. Analysts warn of tighter supplies, weak margins, and rising global competition.
November 25, 2025 12:05 PM
·
A regional snapshot of harvest pace, crop conditions, logistics, and livestock economics across U.S. agriculture, prepared by RFD-TV Markets Specialist Tony St. James, for the week of Monday, November 24, 2025.
November 24, 2025 02:56 PM
·
One trader said the products entering the U.S. are primarily grind and trim, noting that the volume and type of beef, on its own, should not cause a major disruption. However, he says fund traders are reacting heavily to headlines rather than market realities.
November 24, 2025 02:42 PM
·
