But that surplus is meeting softening demand. In the September 26 weekly report, USDA Dairy Market News reported that “In all regions, prices for low/ medium heat NDM moved lower this week. Contacts report domestic demand is declining and production is strong.”
The CME Nonfat Dry Milk Grade A followed suit, closing down on Wednesday, 11/26 at 1.1425/lb.
Globally, the signal is similar.
The November 20 USDA AMS Skim Milk Powder – Oceana report says that dairy production is strong, but demand is weaker. However, there is a hint of hope in that “Producers are beginning to forward contract into Q1 and Q2 of 2026, ensuring longer-term demand.”
Mexico, a key U.S. NFDM importer, is also under macro-level pressure. Demand from that region looks muted headed into 2026.
Our take:
– Near-term: With inventories building, we’re bearish on NFDM pricing, but we do think there is still more room for storage.
– Medium-term: Expect dyers to shift toward higher-value protein streams. That may reduce NFDM output and stabilize prices.
– Long-term: Low prices will cure low prices. The question is, where is the demand-creation price threshold?
We’ll be watching the Q1 activity closely.
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