DAIRY MARKET REPORT
11/26/2025
EDITOR’S NOTE
Some of the data normally reported in the Dairy Market Report is still not available or is reported on a delayed schedule due to the recent government shutdown. This issue reports on the latest available dairy data.
OVERVIEW
U.S. fluid milk sales in September were 2.5% higher than a year earlier. Exports during June-August were significantly higher than during the same period a year earlier. The recent expansion of U.S. milk production may be cresting; USDA reported October production and dairy cow numbers were up over a year earlier by slightly smaller percentages than during September.
The NDPSR-reported dairy product prices were almost all lower in October than a month earlier, as were all the federal order class prices.
COMMERCIAL USE OF DAIRY PRODUCTS
U.S. fluid milk sales in September were 2.5% higher than in September a year earlier, following a 4% annual drop the previous month.
U.S. DAIRY TRADE
U.S. dairy exports during August were lower than in June and July but above a year ago, as measured in milk solids equivalent. June-August exports were significantly higher than during the same period a year earlier by the same measure and as a percentage of U.S. milk solids production, despite the strong growth of the latter. Exports of butter, other dairy fats, and American-type cheese were up significantly from a year earlier during the June-August
period, which saw industry-funded export assistance resume via the NEXT program inaugurated by NMPF.
Changes in domestic-world price relationships contributed to large drops in butter and cheese imports from a year earlier during June-August. Imports of concentrated milk proteins, MPC and casein, were down in total on the year. Total imports were significantly lower during the period than a year ago.
MILK PRODUCTION
USDA has made more than one revision to its monthly U.S. milk production estimates during the current growth spurt, starting with its May numbers. This appears to have stabilized with its report through October, which now shows U.S. milk production was up 3.6% year-over-year during August-October, a slower pace than July’s 4.1% growth. The department’s preliminary dairy cow numbers reported the U.S. dairy cow herd was up over a year ago by 2.2% in October, down from 2.4% growth the month before.
DAIRY PRODUCTS
U.S. cheddar cheese production rose 6.2% year-over-year during June-August, a reduction from its 8.4% growth during May-July. Butter production annual growth, by contrast, increased to 9.7% from 8.1% during the same
respective periods. Nonfat dry milk production showed similar acceleration, reflecting overall milk production growth, while export-focused skim milk powder production continued to drop by double-digit percentages.
DAIRY PRODUCT INVENTORIES
Despite the continued fast pace of overall milk production growth, August-ending stocks of dry skim milk and whey
products were nevertheless reported as mostly lower compared with both a month as well as a year earlier.
DAIRY PRODUCT AND FEDERAL ORDER CLASS PRICES
The NDPSR-reported prices for October were down relative to both the prior month and the prior year, except for dry whey, which bucked both trends. All federal order class
prices for October were, correspondingly, lower in both cases, especially on the year.
LOOKING AHEAD
USDA’s monthly World Agricultural Supply and Demand Estimates (WASDE) report for November continued its multi-month string of increasing its estimates of U.S. milk production this year and next. USDA now projects this year’s annual milk production will be up by 2.4% over 2024’s, with next year’s production 1.3% higher than this year’s. These bullish production forecasts are coupled with corresponding reductions in its milk price estimates for both years. The November WASDE estimates the U.S. all-milk price will be $1.50/cwt lower this year than the 2024 average, and it will drop further by $1.80/cwt next year.
As of the last week of November, USDA had not yet announced the DMC margin for September nor most of the milk and feed prices needed to determine it. However, the DMC Decision Tool on the USDA website at that time estimated the September margin at $10.42/cwt, which would be $1.10/cwt lower than the August margin. The tool also showed the margin declining steadily from there through the end of the year, dropping below $9.50/cwt in November and December and averaging $10.91/cwt for the year.
Dairy Management Inc.™ and state, regional, and international organizations work together to drive demand for dairy products on behalf of America’s dairy farmers, through the programs of the American Dairy Association®, the National Dairy Council®, and the U.S. Dairy Export Council®
Peter Vitaliano, National Milk Producers Federation pvitaliano@nmpf.org www.nmpf.org
The National Milk Producers Federation (NMPF) develops and carries out policies that advance dairy producers and the cooperatives they own. NMPF’s member cooperatives produce more than two-thirds of U.S. milk, making NMPF dairy’s voice on Capitol Hill and with government agencies.