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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Strong cheese and butter prices propelled the futures to new highs. U.S. milk output dropped to just over 17.5 billion pounds in February, 1% less than the year before and the fourth straight year-over-year decline. The January and February milk production shortfalls represent the steepest U.S. deficits since 2009.
View reportDemand is robust from both manufacturers and bottlers though Class I demand is expected to wane in the coming weeks as schools begin to rotate through spring breaks. More universally, however, a persistent shortage of truck drivers and escalating fuel costs are exacerbating logistical challenges.
View reportDairy producers cannot afford to pay this much for feed unless milk prices remain high. The market is well aware that global dairy stocks are relatively low, and that output is shrinking. So, for now, milk prices are climbing nearly step for step with the feed market to deter further declines in milk production.
View reportHigh feed costs and pricey energy will quickly add up on the farm. Feed and energy costs are even higher in Europe, which will further deter growth on the continent.
View reportIn December, milk production among the world’s five largest dairy exporters fell 1.3% below December 2020, the steepest decline in five years. At 19 billion pounds, U.S. milk production was 1.6% lower than in January 2021, the steepest decline since March 2004.
View reportButter and Cheddar reached all-time highs at the Global Dairy Trade (GDT) auction on Tuesday, while both skim milk powder (SMP) and whole milk powder (WMP) prices climbed to fresh seven-year highs.
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