The Latest: October - 2026
Dairy Market Continues to Diverge
The dairy markets continue to diverge. Strong demand for proteins is lifting powder values. This week, CME spot whey powder gained another 2ȼ and reached 82.5ȼ per pound, a fresh 4.5-year high. Spot nonfat dry milk added a nickel, climbing to $2.22, just 7.5ȼ below the all-time high reached this spring. Asian buyers are eager to import U.S. whey powder, propping up prices despite robust production. For NDM, both domestic and international demand are strong, while production remains restrained. Other dairy processors are lapping up much of the milk supply, spot milk prices are rising, and dryers are running light in the Southwest. U.S. milk powder exports to Mexico are formidable.
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The bulls and bears squared off in Chicago this week, and the dairy markets lurched this way and that as the two sides fought for control. By Wednesday and Thursday, the bears won the upper hand, fueled by news that the U.S. economy contracted in the first half of the year, and that the Federal Reserve hoped to tamp down inflation by raising interest rates yet again.
View reportAfter seven months in the red, U.S. milk production exceeded year-ago volumes in June, topping June 2021 by 0.2%.
View reportU.S. inflation accelerated to 9.1% last month, reducing Americans’ purchasing power at the fastest rate since 1981. The dairy markets suffered too.
View reportPrices for dairy commodities moved lower both at home and abroad as the markets sort through supply and demand dynamics. Concerns about economic cooling, inflation, and the resulting impact on dairy demand seems to have been sufficient to push back on pricing.
View reportCME spot butter leapt 9.5ȼ to $3.01 per pound. That’s the highest spot butter price since 2015. The other spot products also climbed, however milk futures struggled.
View reportRed ink flowed on LaSalle Street this week as the trade reckoned with the fact that, although milk production continues to shrink, cheese abounds. Ongoing concerns about demand also pressured the markets.
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