U.S. Dairy Producers Face Mixed Market Signals as Global Demand Strengthens but Domestic Butterfat Supplies Weigh on Prices

May 21, 2026

U.S. dairy producers are facing a complex price environment in 2026 as global markets show renewed strength while domestic butterfat supplies continue to pressure prices. The latest Global Dairy Trade (GDT) auction 404 reported a 0.6 percent increase in the overall price index, marking the first rise after two consecutive declines. The weighted average price reached $4,198 per metric ton, with 12,972 tons of product sold, led by gains in butter, mozzarella, whole milk powder (WMP), skim milk powder (SMP). WMP rose 1.2 percent, SMP 0.2 percent, and lactose 0.5 percent, while butter declined 2.6 percent, anhydrous milk fat (AMF) declined1.6 percent and cheddar dropped 1.3 percent reflecting ongoing weakness in global fat markets.

These global trends intersect with significant domestic supply-side pressures. From 2021 to 2025, CME spot butter prices averaged $2.44/lb, but since August 2025, prices have remained well below that benchmark. A key driver is the surge in U.S. butterfat production: the national average fat test climbed to 4.32 percent in 2025, up 1.9 percentage points from 2024. Combined with last year’s strong milk output, the U.S. produced over 400 million more pounds of butterfat than the prior year. Churns have been running at full capacity, with January butter production hitting a record 241.9 million pounds, and March output reaching 231.5 million pounds, the second‑highest on record. The abundant cream supply continues to depress domestic butter prices.

Source : iastate.edu

Video: 2026 T.K. Cheung Lecture in Animal Science - Dan Weary

T.K. Cheung Lecture in Animal Science: "Using science to assess and improve the welfare of dairy cattle"

Dan Weary is a Professor at the University of British Columbia. Dan did his BSc and MSc at McGill and Doctorate at Oxford before co-founding UBC’s Animal Welfare Program where he now co-directs this active research group. His research focuses on understanding the perspectives of animals and applying these insights to develop methods of assessing animal welfare and improving the lives of animals. His work has helped drive changes in practices (including the adoption of higher milk rations for calves and pain management for disbudding) and housing methods (including the adoption of social housing for pre-weaned calves). He also studies cow comfort and lameness, social interactions among cows, and interactions between cows, human handlers and technologies like automated millking systems that are increasingly used on farms. His presentation will outline key questions in cattle welfare, highlight recent UBC research addressing them, and showcase innovative methods for improving the lives of cattle and their caretakers.