10/28/2025
📉 Dairy Market Update: Production Up, Prices Down
The U.S. dairy industry is seeing a notable shift: producers added more cows and boosted per-cow output this year. According to recent USDA data, the national herd hit about 9.52 million dairy cows — the highest since 1993 — and average production per cow in August reached a record figure.
At the same time, key dairy commodity prices — cheddar, butter, and non-fat dry milk — have declined sharply, with butter falling from ~$2.50 to ~$1.70 per pound and NFDM reaching its lowest point this year (~$1.14 per pound).
This mismatch — rising supply + falling prices — could ripple out in a few ways:
Dairy farmers may face tighter margins 🧾
Culling of dairy cows may increase, which could impact beef markets 🥩
Downstream effects for feed suppliers, processors, and grocery pricing may follow 🛒
🔍 Why it matters for business & broader markets
Whether you’re engaged in agriculture, food supply chains, commodity trading, or rural real estate, these trends point to structural change: production capacity is growing, but pricing power is under pressure.
For investors and professionals tracking ag markets, this signals potential shifts in input costs, farmland values, and supply-chain stress points.
📌 Takeaway
More milk is flowing 🥛 — less revenue per unit is coming in
Dairy operations must scale efficiently or pivot strategically
Now’s the time for those in ag-finance, land, or production to re-evaluate profitability and resource allocation
