Benchmark Prices Up from October, Down from '24
Published: Friday, December 12, 2025
The November federal order benchmark Class III milk price was announced by the USDA at $17.18 per hundredweight, up 27 cents from October, but is $2.77 below November 2024. That put the 11-month average at $18.20, down from $18.92 a year ago, and compares to $17.11 in 2023.
Last Friday morning, Class III futures showed December at $16.01; January, $15.24; February, $15.37; March, $15.77; April, $16.21; May, $16.59, with a peak at $16.85 per hundredweight in June.
The November Class IV price is $13.89, down 41 cents from October, $7.23 below a year ago, and the lowest Class IV price since February 2021. Its 11-month average is $17.72, down from $20.75 a year ago, and $19.11 in 2023.
Global dairy prices continued to fall as fat lowered the boom in last week's Global Dairy Trade, the eighth consecutive event of decline. The weighted average fell 4.3%, biggest drop since Sept. 2, and followed a 3% decline on Nov. 18 and 2.4% on Nov. 4. Volume dropped to 75.6 million pounds, lowest since July 15, and down from 85.1 million on Nov. 18. The average metric ton price slipped to $3,507, lowest since March 19, 2024, and down from $3,678 on Nov. 18.
Butter again led the declines, plunging 12.4%, following a 7.6% drop on Nov. 18. Anhydrous milkfat was down 9.8%, after dropping 5%. Cheddar was up 7.2%, after falling 2.7%. Mozzarella was off 1%, after dropping 2.8%. Skim milk powder was down 1.6% after slipping .6%. Whole milk powder was down 2.4%, following a 1.9% decline. Buttermilk powder was up 1.8% and lactose was up 4.2%.
StoneX says the GDT 80% butterfat butter price equates to $2.2874 per pound, down from $2.6045, and compares to CME butter which closed last Friday at a dirt cheap $1.4775. GDT Cheddar equated to $2.1043, up from $1.9632 last time, and compares to last Friday's CME block Cheddar at a bargain $1.38. GDT skim milk powder averaged $1.1331 per pound, down from $1.1529, and whole milk powder averaged $1.5259, down from $1.5657, while CME Grade A nonfat dry milk closed last Friday at $1.17 per pound.
Analyst Dustin Winston stated, "Volume sold in this GDT auction was down over 4,000 metric tons from the last event. As a result, every region had lower overall purchase volume compared to the previous week. North Asia, which includes China, total purchases was very close to last year's purchase volume. While most other regions declined in purchase volume, the biggest surprise was the Middle East growing more than 50% from last year's levels."
HighGround Dairy's Cara Murphy called the GDT "a massive price correction, especially on milkfat," in the Dec. 8 Dairy Radio Now broadcast, and said New Zealand butter is below EU pricing, but both are still above the U.S. so we will continue to see exports. She added that New Zealand Cheddar is still holding at $2.08 per pound or about 60 cents per pound more than the U.S. and EU so the U.S. will remain competitive in the Asiatic region in 2026.
She adds the caveat that there's a lot of milk coming out of New Zealand and the rest of the world so the market is over supplied and prices are definitely showing it. "Supply is driving the boat," she said, even while "demand isn't overly bad." "We're really paying attention to the supply side of things as there's a lot of milk coming out of every place across the globe and that will impact the amount of dairy commodities we make and the prices that we get for them," she concluded.
HighGround Dairy also posted its report of China's October dairy imports, stating that they were flat, compared to October 2024, although significantly lighter than volumes recorded in October 2023. "New Zealand retained market share at a third of the total volume, while many European destinations lost share. The U.S. and Australian portions stepped slightly higher."
Whole milk powder imports were up 4% from a year ago, while skim milk powder was down 9.4%. Whey imports were up 14.4%, with U.S. product accounting for 48% of the total, an 18% gain from a year ago, according to HGD.
Cheese imports totaled 28.4 million pounds, up 30.7%, while butter, at 12.5 million, was down 4.4%. New Zealand and Australian cheese accounted for 71.5% of October's imports, says HGD.
New Zealand-based Fonterra dropped its 2025-26 forecast milk price to a range of $9-$10 per kilograms of milk solids (kgMS), with a midpoint of $9.50 per kgMS, down from its earlier published $9-11 range, according to HGD. "The co-op cited strong global milk production and declining dairy prices as reasons for the lower estimates. Season-to-date through October, New Zealand has produced 2.8% more milk solids than during the same period in 2024."
Back home, the USDA's latest weekly slaughter report showed 54,100 head of dairy cows culled the week ending Nov. 22, up 2,900, or 5.7%, from a year ago. Total to date, 2,367,700 head have left the dairy business, down 90,800, or 3.7%, from 2024.
CME dairy prices started December mixed. The Cheddar blocks closed last Friday at $1.38 per pound, down 9 cents on the week, lowest CME price since July 6, 2023, and 32 cents below a year ago.
The Cheddar barrels finished at $1.4125, 17 cents lower, lowest since Jan. 5, 2024, 27.75 cents below a year ago, yet 3.25 cents above the blocks. CME sales totaled 34 loads of block on the week and one of barrel.
HighGround Dairy stated in its Monday Morning Huddle, "While U.S. fundamental data has not been readily available over the past two months due to the government shutdown, both market chatter and the information that was published indicated more milk and fat, combined with less milkfat going into other cream uses like sour cream and ice cream, means butter churns have made a lot of product. Heavy inventories are dragging prices down, particularly as manufacturers work to unwind old crop product."
"With the Thanksgiving holiday in the rearview mirror, cheese producers are resuming normal operations in the Central region," said Dairy Market News. "Bulk cheese production is increasing for some manufacturers while others remain focused on curds and retail products. Demand for milk from bottlers was stronger than last week, but still lighter than previous weeks, leaving a large amount of spot loads available to cheesemakers. Class III spot prices dropped some last week with prices ranging from $2-under to 50 cents-over class. Retail demand for cheese is strong, and contacts say demand will continue throughout the remainder of the month. Export interest is steady to strong, and inventories are balanced," reports DMN.
Strong milk production continues to provide plenty for cheese manufacturers in the West but Class II and IV manufacturers are placing heavier demands on spot milk in some cases. Cheese production was steady to stronger following the holiday week. Domestic demand is steady but reports are that the holidays are not bringing the usual big upticks in demand so far, particularly concerning domestic food service demand. Export demand is steady to strong, says DMN.
Cash butter fell to $1.4450 per pound last Monday, lowest CME price since Feb. 12, 2021, but it rallied some last Tuesday, Wednesday, Thursday and Friday and closed at $1.4775, up 2.75 cents on the week, but $1.0675 below a year ago. There were 25 sales recorded for the week.
Cream was widely available in the Central region. Component levels continue to be higher this year than previous years. Butter makers are seeing large volumes of cream on the spot market. Cream multiples for Class IV were mixed this week, but higher than last week, with most of the sales ranging from flat to 1.15. Many facilities resumed full production after the holiday, operating butter churns seven days a week to keep up with strong retail demand. Retail orders are very strong, says DMN, and exports of 82% butterfat butter remain strong. Inventory levels are "balanced."
Strong milk production and components continue to make spot cream widely available in the West.
Cream demand from butter manufacturers is steady to stronger. Some manufacturers were taking in spot loads along with their contractual volumes. Butter churns are reportedly at or near capacity. Retail butter demand is stronger. Some butter producers note food retailers are wanting to increase the quantity of loads ordered. Food service demand is steady. Butter manufacturers report stable or decreasing inventories. Many butter producers are prioritizing output as export demand is easily exceeding forecasts, according to DMN.
Grade A nonfat dry milk also saw strength this week and closed last Friday at $1.17 per pound, 2.75 cents higher on the week but 22 cents below a year ago. There were 14 CME sales on the week.
StoneX Dec. 3 Early Morning Update stated, "Powder production has been down since June, and exports we feel have started to pick up, especially to Mexico. August skim milk and nonfat dry milk powder exports from the U.S. to Mexico were down 21.5% year over year, but we are estimating a seasonal increase through October. Mexico has a blackout period during the month of December, so imports typically pick up before then. However, we still have no guidance from the USDA as to when this export data will be released."
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