Rising Milk Supplies Push Dairy Prices Sharply Lower

Lower milk prices may pressure margins, but strong cattle values could soften near-term financial impacts.

LUBBOCK, Texas (RFD-TV) — Milk prices are falling rapidly as expanding supplies overwhelm seasonal demand, creating growing financial pressure for U.S. dairy producers. According to Dr. David Anderson, livestock economist with Texas A&M AgriLife Extension, the usual holiday demand boost for butter and cheese failed to materialize this fall as milk production surged to multi-decade highs.

Strong milk prices in 2024 and lower feed costs encouraged herd expansion, while added processing capacity supported higher output. High cattle prices also contributed, boosting dairy revenues through higher cull cow values and record prices for beef-on-dairy calves. By September 2025, the U.S. dairy herd reached 9.581 million head — the largest since the early 1990s — while milk production per cow continued to climb.

Higher cow numbers and improved productivity pushed October milk output up nearly 4 percent from a year earlier. As supplies built, dairy product prices slid sharply. Butter, cheese, and nonfat dry milk prices all dropped well below last year, pulling Class III and Class IV milk prices lower.

Some herd contraction is expected, though strong cull and calf values may slow supply adjustments.

Related Stories
Ag Secretary Brooke Rollins told RFD-TV’s Kirbe Schnoor that advocating for women in agriculture is a passion of hers, and she also gave women some words of encouragement.
Here are the top agriculture news headlines from RFD-TV News today (Thursday, Feb. 27, 2025) and the top trending stories on RFD-TV News.
U.S. Secretary of Agriculture Brooke Rollins announced her five-point comprehensive strategy to fight High-Path Avian Flu (HPAI) on Wednesday in an op-ed published in the Wall Street Journal.

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

LATEST STORIES BY THIS AUTHOR:

A booming butterfat market is good for some dairy products but threatens efficiency and margins for cheesemakers unless protein levels catch up
U.S. Farmers Navigate Harvest Pace, Costs, Policy Shifts
Land values are increasing faster than farm income, making it more challenging for young and beginning farmers to expand, but supporting equity for current landowners.
Smaller flocks and lower lay rates are pressuring table egg supplies, even as hatchery activity edges higher.
Strong corn exports are anchoring U.S. trade, while soybean sales remain steady, but shipments lag.
Smaller slaughter numbers across beef and pork signal tighter supplies into late 2025, while record-low veal production highlights ongoing structural changes in the sector.