Strong milk production remains the central driver of milk markets, with Sept.-Nov. 2025 production up 4 percent year-over-year on a
Butter, anhydrous milk fat (AMF) and cheese export growth are providing some relief, but excess supply continues to weigh on producer prices. As milk prices fall, feed costs are rising, leading NMPF to anticipate that DMC payments to fall below the $9.50/cwt coverage level in December and continue at lower levels into 2026.
The Consumer Price Index held steady at 2.7 percent annually in December, with grocery prices rising 2.4 percent, meanwhile, retail dairy product prices moved in the opposite direction, falling slightly in December compared to a year ago. However, commercial use of most dairy products fell slightly year-over year as food service foot traffic falls and retail gains fail to bridge the gap.
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