With Easter behind us, demand is easing, milk production is climbing, and the spring flush is here.

But beneath the surface, the dairy complex is anything but comfortable.

In the latest episode of The Milk Check, host Ted Jacoby III and the Jacoby team look at the fault lines hiding beneath today’s seemingly stable dairy market.

In this episode, we cover:

• Why milk is getting longer, but not everywhere
• How added processing capacity is changing the spring flush
• Whether butter has found its floor, or is simply stuck
• Why energy may be the biggest wildcard in dairy right now

From regional milk balances to butter’s next move and the growing influence of energy costs, we look at what is really driving the dairy complex right now.

To hear what could hold, what could crack and what the next few months may mean for dairy, listen to The Milk Check episode 97: Steady Markets, Shaky Ground.

Got questions?

We’d love to hear them. Submit below, and we might answer it on the show.

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Ted Jacoby III: Coming up on the Milk Check.

Joe Maixner: It’s really watching the energy markets because it’s going to affect literally everything.

Ted Jacoby III: Welcome to the Milk Check from T.C. Jacoby and Company, your complete guide to dairy markets, from the milking parlor to the supermarket shelf. I’m Ted Jacoby. Let’s dive in.

Today is April 6th, 2026. It’s the day after Easter.

it’s also the birthday of a few illustrious people like Paul Rudd, Lando Calrissian, or actually Billy D. Williams and our own Joe Maixner, and we’re here to talk about dairy markets today.

Sorry, Joe, and we’re here to talk about dairy markets today, and what we’re gonna be talking about is it’s the day after Easter and demand for the next oh five months or so tends to slow down a bit, while milk production tends to pick up and it’s peaking probably right as we speak, and over the course of the next four to five weeks.

So, what does that mean for the dairy landscape? What does that mean for the price landscape? When I started thinking about what we were gonna talk about for this podcast, the market seemed to be in a lull right now. And then I realized it’s that time of the year.

The question is, are they gonna stay here? Are they gonna go lower? We know that milk production is gonna continue to increase, especially in the Midwest, and we know that the next demand event of any significance is at least five to six months away. But where we’ll start is we’ll start with milk production.

This is the time of year when things tend to get a little bit long. Gus, is milk long right now?

Gus Jacoby: Depends what region of the U.S. you wanna talk about. From what I understand, there’s some areas of the West that are very long. The upper Midwest, when you have plants go down, it gets a bit ugly.

But looking into the mid East, the Northeast, the Southeast, certainly the Southwest, where there’s quite a bit of new processing capacity, all these areas, are not all that long. It’s certainly the spring flush, but when you look at the Milk Production Report, you would think they would be a lot longer.

And I think additional processing capacity in all these regions that we just discussed are where we’re a little bit shorter than we anticipated, considering what time of year it is.

Ted Jacoby III: Usually, this time of year we’re hearing of milk moving at 2, 3, 4, $5 under. Is that happening this April?

Gus Jacoby: There’s some spots in the upper Midwest where it gets that discounted, yes. But I would say that has more to do with plants being down in addition to the surplus that causes it to get that long. I think if everything is functioning in the region — in the upper Midwest, Mideast or anywhere on the Eastern corridor — you’re not seeing quite the growth that’s shown in the Milk Production Report.

Anytime you see north of 2.5% or 3% in a Milk Production Report, usually that means the flush is a really ugly period of time. But in these regions of the country, we’ve added enough processing capacity to balance things out a bit more and not make it quite as long as you would think.

Ted Jacoby III: So we didn’t really add any plants west of the Rocky Mountains. And in that case, the flush, especially in California, is probably already in the rear view mirror. Are we seeing milk really long in California and along the west coast right now?

Gus Jacoby: I’ve heard that California, for a while there did get pretty long.

That area hasn’t had the additional processing capacity outside of the Pasco facility to deal with the level of surplus we have in those regions.

Ted Jacoby III: That means it’s fair to say that we’re in the flush right now, maybe past the flush out West Milk has gotten long, milk is plentiful, but we’ve added enough milk processing capacity that generally speaking, as long as there in, there are not any plant breakdowns. We seem to be able to handle the additional milk supply and we’re getting it all processed.

Gus Jacoby: Yes, that’s the truth.

Joe Maixner: The West has been running full for the past couple of months. But cream has not been super long. It’s been getting into the churns, but it’s also been finding homes elsewhere and it’s had decent demand.

It’s been a little surprising that we haven’t had as excess of cream as we would’ve anticipated given how long milk has been.

Ted Jacoby III: What about on the powder side? I’ve heard that the plants are not necessarily dumping any milk, but the plants are full enough that they can’t run anything specialty.

So, all they’re running is straight up nonfat dry milk, which these days with protein component values in the milk the way they are, 38% protein, but they’re just running ’em flat out to get all that milk processed and dried. Is that a fair way to put it?

Josh White: Yeah, I would say so.

Ted Jacoby III: Okay. Milk’s getting processed. We’re making a lot of it, but Easter’s now in the rear view mirror. Since our runup, late January, early February, the cheese market seems to have settled into a price somewhere in the $1.60s, the butter market’s been $1.70s, $1.80s, it popped up over $2 and it seems to have faded since.

Is it in its sweet spot yet, or where do you think the butter market will go over the next three to four months?

Joe Maixner: I think there’s a lot of factors that go into where the butter market’s gonna price over the next few months. Obviously, we’ve got the macro events going on, the conflict in the Middle East, that’s pulled a lot of export opportunity out, as we’ve talked about at length in the past few podcasts.

But there’s been a lot of product trading in this 15¢ to 20¢ range that we’ve been in over the past couple of weeks, and it seems that we’ve found a good range where buyers and sellers are happy to move product.

There’s probably not much more downside potential at this price. But it’s a very real possibility that we could just stagnate here for the next few months until we see any type of real demand shift and production dies off into the summer.

Ted Jacoby III: Are we gonna continue to be exporting butter?

Joe Maixner: Yeah, absolutely. We’re still seeing exports move. Obviously we’ve lost some of our largest growth markets with this conflict, at least temporarily. But we’re still exporting to other regions, and all of those markets are growing.

Will it be enough to offset the losses? I’m not sure, but we’re still moving product out of the country.

Ted Jacoby III: The cheese export numbers have been phenomenal for about the last six months.

We’ve been up over 30% year over year, almost to the extent of being a little bit surprising. Are we gonna be able to keep that up, do you think? Or is this market going to peter out a little bit ?

Jacob Menge: You gotta suspect that you stop getting the blockbuster export numbers before too long because it has been two months now since we’ve come off of kind of those rock bottom prices that we were at.

I think that will certainly take the top off of those export numbers. Cheese in general has probably been one of the quieter of the dairy markets, probably the quietest. It’s been sneaky though. There’s been these moments where it’s been hard to find product.

There’s been moments where you can find product and I think it definitely is a tale of exactly what cheese you’re looking for. I don’t think colored cheddar has been particularly hard to come by. Meanwhile, white, for export has been pretty tough. All of that has resulted in this really nice gentle climb higher on cheese prices.

We’re starting to see some cracks in the floor, especially internationally. We’re hearing mozz prices starting to get some pushback outta Europe. Those blockbuster export numbers on the cheese side are probably nearing an end.

And if not then I think that’s gonna be the only thing that can keep driving the cheese price appreciably higher from where it’s at. If we can keep getting these pretty impressive numbers, sure, I don’t see why we couldn’t keeps stair stepping higher.

Ted Jacoby III: Where the export numbers go, the price of cheese goes.

Is that a fair way to put it?

Jacob Menge: It certainly seems like an export driven market right now. Our opinion kinda long term is that’s U.S. cheese. This last year or so, maybe more 18 months, reflecting back on it, been the coming of age era for a serious export driven cheese price in the U.S. Historically, obviously export have played a factor, but it seems like that’s going to be the dominant force today and in the future.

Ted Jacoby III: Yeah, I think I’d have to agree with that.

And then there’s nonfat. Josh, this nonfat market, it sure went a lot higher than anybody expected. Even when it started to rally, we thought it could go up into the $1.50s, $1.60s, but I don’t think we expected the $1.90s. Is this market gonna stay here? Where does this market feel like it’s at today? And how does play out from here?

Josh White: It’s still a tight market, Ted. Seems like there’s some commitments that are still behind. On the manufacturing level, it seems like demand’s been very strong. Let’s be clear, the West Coast is running a lot of nonfat right now, and it’s not changing the climate. Where we’re really seeing the vacancy in production is in the middle part of the country.

It’s pretty well reported now. Everyone’s clueing in on this idea that there’s just been a lot of growth in the protein beverage market and in the UF space, and that seems to have kept a lid on our production growth for nonfat dry milk relative to the milk production growth and the protein growth that we’re experiencing in the milk.

So yeah, it still remains pretty strong. There’s still good demand. Yeah, there’s a lot more conversations and we’re having a lot of conversations with customers across all the different industries that consume dairy products about what these higher prices mean.

Are they real? Are they here to stay? If you look at the futures curve though, we’re way higher than that current futures price, and it’s an inverted curve, so we’re gonna have to pay a lot of attention to how that plays out, particularly as we get into these heavier milk production months, domestically and in Europe. But to be clear, there’s a lot of milk; that milk’s being processed into a lot of products; but in the U.S. side, we’re not seeing huge nonfat increases. I think across the pond though, they’re making a lot more skim milk powder, and they’re the beneficiaries of this tight market right now.

Clearing a lot of that product into the international clients that, historically may have been looking to the U.S. as well.

Ted Jacoby III: Do you think that means we’re gonna be export handicapped for the next three to four months that might just weaken the demand side of the equation for U.S. nonfat?

Josh White: Yeah. The trade’s not as free as we all hope and expect it to be, and what I mean by that is there’s barriers to entry for bringing, like European product into Mexico. Approved brands across the world that might make it more difficult to exchange one supplier for another.

But I think the answer to your question, the longer we maintain this type of premium, the less likely we are to export into some contestable markets. And it’s really tough when you’re talking about managing supply chain over the course of a year to get that right. There’s a real possibility that, we could miss some business that we wished we had later in the year.

But, as it stands right now, it’s not like we’re sitting on a lot of extra product to move.

Ted Jacoby III: So, when we look to the next, 1, 2, 3 months, things are tight enough. The nonfat market’s still coming from a place of overcommitment and then still trying to work through that.

And there’s No reason to think that we’re gonna be trading nonfat in the $1.20s by Memorial Day.

Josh White: No reason to think that. I think that we’re putting ourselves in a position where now’s the moment where we can take a little bit of the pressure off the market.

We’re starting to see a little bit more seasonal milk in the middle part of the country. Nothing compared to what we saw a year ago going through the dryers, but we are starting to see maybe some signs of some relief.

Ted Jacoby III: Proteins is the other market that seems to be shooting for the moon, up there with Artemis II. Are those protein prices gonna stay there or are they gonna come down?

Josh White: Pointed question. Not for the second quarter, it sure doesn’t feel like they’re coming down. Every spot load that I see offered trades almost in the air. There still seems to be really good demand despite higher prices. And also despite a lot of customers asking about substitution. The answer to that question is maybe different for the next quarter than it might be for the next year.

We’ll have to see. But as it stands right now as it relates to whey proteins, no slowdown in demand. Price strength remains, loads are very expensive. Conversations are less about the willingness to buy product than they are about the credit worthiness to sell that product to the clients because of just how expensive a load of WPC 80 or WPI cost today.

We’re also starting to see some momentum in the MPC markets. Shouldn’t be a surprise. MPC 85 prices have been increasing. We’re starting to see customers that have the flexibility to do some substitution between WPCs and MPCs, considering it. More conversations about alternatives within the dairy complex like caseins and caseinate.

But then, I have to imagine there’s also conversations happening about substitution outside of the dairy complex for plant proteins and alternative proteins. It’s a challenging market. Certainly a good sign that the consumer, particularly in the U.S. is paying a lot of attention not to just wanting more protein in their diet, but also the quality of the protein that they’re consuming.

And it’ll be really interesting over the next year to see that tug of war: the valorization of high-quality, highly digestible dairy proteins, versus cheaper proteins going into certain applications and how the consumer responds to those economies.

Ted Jacoby III: What’s the one product in the dairy complex right now that you’re really worried about? Because right now we just went through all the major commodities and there seems to be at least stability in the short term. Which one do you think breaks first in terms of price? What market should we be paying attention to if this dairy complex is gonna start to weaken on us?

Jacob Menge: I’m paying most attention to butter right now, because I think the butter price has made these kind of violent moves. Not nonfat, violent, but more like consistently trending lower all last year. And then it’s made a pretty good recovery with that new crop, old crop switch. And then it’s trended lower from there. I think that’s important because that’s gonna have a big impact on that Class III, Class IV spread.

And I think that Class III, Class IV spread is gonna ultimately drive some decisions at the fluid level, which is gonna have knock on effects for export markets, not just for butter, right? This is for all of these products. Because of that butter price , I think the math can be swayed one way or the other depending on where that goes.

We have these kind of baked in assumptions on, okay, nonfat’s probably not staying at $2 through 2026, okay. We have some baked in assumptions on cheese. I think that means that decision maker is butter. And would anybody be shocked if it went up 50¢?

Probably not. Would anybody be shocked if it went down another 10¢ or so? Probably not. I think you certainly would have debates around this, but that changes that Class III, Class IV spread enough that I think that has a lot of knock on effects.

Ted Jacoby III: That makes a lot of sense. Josh, what about you? Which market are you paying attention to the most?

Josh White: I would just say just the market. I think nonfat’s the obvious answer to that, but our entire dairy markets have been really changed this year by this protein movement.

And what I can’t get my head around is the GLP-1 and cheaper GLP-1 catalyst. At what moment does a hundred dollars to fill a gas tank on a sedan start to change what people are willing to spend? That’s the one that I can’t really get my head around because it would be very easy to say, “Look out: these high protein products are here to stay.” The science backs it; people are eating less calories, but better calories. And that absolutely works for dairy proteins. But then on the other side, when you’re forced to make a decision about how you spend your money are you gonna get to a point where it’s choosing whether or not to fill your gas tank or whether or not to buy the powdered isolate.

I wonder if we find that threshold at some moment this year.

Ted Jacoby III: Yeah, I think that’s a great answer. Which market do you think is affecting the dairy markets the most right now? It’s the gas market. I think that’s fair.

Joe, how about you?

Joe Maixner: I’m clearly watching butter for obvious reasons. But I echo what Josh is saying. It’s really watching the energy markets because it’s going to affect literally everything over the course of this year. Jake brought up a great point about the Class III, Class IV spread, though. With the strength in nonfat, I hadn’t given a whole lot of thought process to butter’s impact in Class IV because you’re seeing Class IV through the rest of the year and into 27 at a minimum in the mid eighteens level which is a dollar premium to Class III, even with an inverted nonfat market.

That’s definitely one to keep an eye on as well. But again, as a whole, just energy, energy’s going to affect everything all the way down to the consumer level.

Ted Jacoby III: Yeah, I guess I agree. Gus, what are your thoughts on this market?

Gus Jacoby: It’s hard not to talk about energy right now. That’s pretty obvious. Certainly when you’re hauling milk it has a big impact. Those fuel surcharges, hiking up to the degree that they have has made hauling milk quite a bit more expensive, considering the amount of water that’s being hauled and how much more expensive it is.

 That is something we can’t control. None of these markets are anything we can control. But when it comes to the dairy markets, I think the skim solids is something that has been very interesting to me.

Gus Jacoby: How tight that market gets, the limitation that cheese has in getting fortification solids, are we gonna start turning to powder to fortify, and can cheese plants afford it with the Class III, Class IV spread as we shift, obviously with this protein demand continuing to increase and all the other areas that skin solids are required. I think it’s going to have a ripple effect on our industry that’s gonna take a while for us to get used to as skim continues to, find more and more demand. So, for me, it’s an interesting marketplace and I’ve been paying a lot of attention to that lately.

Ted Jacoby III: Sounds good. Awesome. Thanks guys very much. I thought that was a nice summary of what’s going on in our markets right now. We’ll see how the next few months play out.

Appreciate the time. Thanks for joining us today, and everybody stay safe out there.