The Latest: October - 2026
Tidal Wave of Milk
The dairy markets are awash in a tidal wave of milk. USDA’s latest Milk Production report showed that August milk output was notably higher than previously thought, and the agency pegged September milk production at 19.4 billion pounds, up 2.6% year over year, far higher than LaSalle Street expected. The recent ups and downs in the dairy markets did not diminish dairy producers’ appetite for growth. They added 26,000 cows last month, lifting the dairy herd to 9.74 million head.
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High 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.
View reportBuyers and sellers jockeyed to exert their influence on the trade. The action in the cheese markets was relatively subdued, however important movements in the nonfat dry milk, whey, and especially butter markets, kept observers on their toes.
View reportThe phenomenon is certainly not limited to the United States. Market observers watched the Global Dairy Trade index climb on Tuesday by 4.1%, with the index reaching the highest level seen since February 2014.
View reportNearly every product lost ground at the CME as market participants challenged the high product prices seen in recent weeks. However, the butter markets really stole the show.
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