Dairy Market News at a Glance

BUTTER: Grade AA closed at $1.6050. The weekly average for Grade AA is $1.6440 (-0.0950).

CHEESE: Barrels closed at $1.7100 and 40# blocks at $1.7000. The weekly average for barrels is $1.7400 (+0.0300) and blocks $1.7365 (-0.0045).

NONFAT DRY MILK: Grade A closed at $1.1275. The weekly average for Grade A is $1.1445 (-0.0135). DRY WHEY: Extra grade dry whey closed at $0.6350. The weekly average for dry whey is $0.6310 (-0.0100).

BUTTER HIGHLIGHTS: Domestic butter demand remains mixed nationwide. Retail sales continue to be more robust than food service sales. Export demand is strong. Cream volumes are more than adequate as both milk output and fat levels are increasing seasonally. Cream multiples declined slightly compared to last week. Cream demand is being met by contractual volumes, resulting in light spot market activity. Due to some reported downtime for butter churns, production schedules vary from capacity to lighter. Although the latest Weekly Cold Storage Holdings show increasing butter stocks some stakeholders report slightly decreasing butter inventories. Plenty of loads are available to meet demands. Bulk butter overages range from 2 cents below to 5 cents above market across all regions.

CHEESE HIGHLIGHTS: Cheese production across the East varied this week, as some plants continued to run at limited capacity, while others increased output ahead of the holidays. Facilities are keeping pace with seasonal orders, and spot milk remains available for Class III use. Export interest is improving, and manufacturers report steady movement on contracted volumes. Inventories are balanced and in good shape heading into the fourth quarter. Milk production across the Central region is trending steady to stronger as cooler weather supports yields. Processors are keeping cheese output consistent, while balancing spot milk costs and availability. Retail demand is steady to higher, but food service sales remain soft. Spot loads are moving, and export demand continues to lend support to the market. In the West, cheesemakers are keeping production active as milk supplies strengthen. Contract volumes are covered, and mozzarella loads are moving steadily to buyers. Domestic demand is flat, though retail interest is stable, and export sales remain the stronger outlet. Falling European prices are eroding the competitive edge for U.S. cheese abroad.

FLUID MILK HIGHLIGHTS: Seasonal temperature declines are contributing to higher milk volumes throughout the country. In addition to higher volumes, milk components remain high, contributing to higher volumes of cream on the market. Demand for Class I remains steady to strong. In some regions, bottlers are taking spot loads of milk to fulfill increased demand. Class II production is increasing as manufacturers begin fulfilling holiday orders. Class III demand is lighter this week. Some cheesemakers are acquiring spot loads of milk from facilities that are in limited production. Class IV production is increasing. Cream is plentiful nationwide, but spot sales are limited as contract loads of cream are sufficient to meet demand. Butter manufacturers are focusing efforts on retail size packaging to meet anticipated holiday demand. Condensed skim production is heavy in the East and steady in the West. Reported sales of condensed skim are mixed. Some spot loads are selling under class value while others are selling over class price. Cream multiples for all Classes range: 1.00 – 1.20 in the East; 0.85 – 1.20 in the Midwest; 0.85 – 1.18 in the West.

DRY PRODUCTS HIGHLIGHTS: Low/medium heat nonfat dry milk (NDM) prices are steady to lower in the Central and East regions this week and high heat NDM prices decreased. In the West, the price ranges for both low/medium heat and high heat NDM narrowed as prices increased modestly at the bottom of the range and decreased at the top of the range. Central and East region buttermilk prices are down, amid increasing production and growing inventories. The price range for dry buttermilk tightened in the West, as prices increased at the bottom of the range and decreased at the top.

Both ends of the dry whole milk price range moved slightly higher this week. Central region dry whey prices decreased at the bottom of the price range. The bottom of the West region price range and both ends of the Northeast range were unchanged, but the top of the Central range pushed higher. Lactose prices are unchanged at the top of the range and the mostly price series but increased at the bottom of both. The price range for whey protein concentrate 34% shifted higher, while both ends of the mostly price series moved lower. Acid and rennet casein prices are unchanged.

INTERNATIONAL DAIRY MARKET NEWS: WEST EUROPE: The Bluetongue Virus (BTV) surged in the UK in early October 2025, confirming numerous new cases in both sheep and dairy cows. The Irish Department of Agriculture, Food and the Marine implemented new regulations in September requiring farmers to test their entire farm’s soil every four years to ensure they are meeting phosphorus level thresholds. EAST EUROPE: Russia is successfully shifting its dairy export focus, driving overseas sales up 16% in volume year to date. OCEANIA: AUSTRALIA: Milk production data from Australia for August 2025 were recently released by Dairy Australia. These data show total August 2025 milk production was 661.5 million liters, down 20.4 million liters (3.0 percent) year over year. Dairy Australia recently released export data for Australia showing milk export volumes in July and August 2025 totaled 28,367 metric tons, an increase of 13.0 percent compared to export volume totals in July and August 2024. NEW ZEALAND: A large New Zealand cooperative announced a final farmgate milk price of $10.16 per kilogram milk solids (kgMS) for the 2024/2025 season. This resulted in $15.3 billion in payments to dairy farmers, a $3.8 billion increase in revenue over the prior season. The cooperative also announced an organic milk price of $12.35/kgMS, setting a new record for the cooperative over the 2023-2024 organic milk price of $10.92/kgMS. SOUTH AMERICA: Milk production in South America is stronger as it ticks towards seasonal peaks. Milk production is up year over year throughout South America. Stakeholder sentiment concerning milk prices is on the bearish side. The National Oceanic and Atmospheric Administration forecasts a 71% chance for La Nina conditions during the remaining months of 2025. Dairy processing capacity in Uruguay has taken a hit due to a plant closure and labor disputes leading to decreased milk intakes for some Uruguayan processing plants.

NATIONAL RETAIL REPORT: In the week 41 retail dairy survey, conventional dairy ads grew 25 percent, and organic ads are up 6 percent. Ice cream overtook cheese as the most advertised conventional commodity this week. In the organic aisle, milk remains the most advertised commodity. Cheese appeared in 13 percent fewer ads this week, dropping to the second most advertised conventional commodity this week. Organic cheese ads are down 16 percent. Gallon conventional milk ads increased 145 percent in this week’s survey, and the average price is up 56 cents to $3.46. The organic premium for this item is $4.63.