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, but compares to $17.11 in 2023. Wednesday’s Class III futures settlements had December at $15.80; January, $15.26; February, $15.42; March, $15.74; and April at $16.17 per cwt.

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 Feb. 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 this week’s Global Dairy Trade, the eighth consecutive event of decline. The weighted average fell 4.3 percent, biggest drop since Sept. 2, and followed a 3.0 percent decline on Nov. 18 and 2.4 percent 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 U.S., lowest since March 19, 2024, and down from $3,678 on Nov. 18.

Butter again led the declines, plunging 12.4 percent, following a 7.6 percent drop on Nov. 18. Anhydrous milkfat was down 9.8 percent, after dropping 5.0 percent. Cheddar was up 7.2 percent, after falling 2.7 percent. Mozzarella was off 1.0 percent, after dropping 2.8 percent. Skim milk powder was down 1.6 percent after slipping 0.6 percent. Whole milk powder was down 2.4 percent, following a 1.9 percent decline. Buttermilk powder was up 1.8 percent and lactose was up 4.2 percent.

StoneX says the GDT 80 percent butterfat butter price equates to $2.2874 U.S. per pound, down from $2.6045. GDT Cheddar equated to $2.1043, up from $1.9632 last time. GDT skim milk powder averaged $1.1331 per pound, down from $1.1529, and whole milk powder averaged $1.5259, down from $1.5657 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 percent from last year’s levels.”

HighGround Dairy’s Cara Murphy called it “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 below 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.

Meanwhile, 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 percent more milk solids than during the same period in 2024.”

Back home, the USDA’s latest Livestock Slaughter report showed an estimated 243,000 head of dairy cows were slaughtered under federal inspection in October, up 15,800 head from September, and up 7,400 head or 3.1 percent above October 2024. Total to date, 2.19 million head have been culled, down 101,800 4.4 percent from 2024.

CME dairy prices started December mixed. The Cheddar blocks fell to $1.3950 per pound Wednesday and stayed there Thursday, holding at the lowest CME price since March 22, 2024, and 30.50 cents below a year ago. They closed Wednesday, the day before Thanksgiving, at $1.45. The barrels were trading Thursday at $1.4450, lowest since April 1, 2024, 24.50 cents below a year ago, but a nickel above the blocks. They closed last Wednesday at $1.5825.

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, meaning butter churns have made a lot of product. Heavy inventories are dragging prices down, particularly as manufacturers work to unwind old crop product.”

Dairy Market News said, “With the Thanksgiving holiday in the rearview mirror, cheese producers are resuming normal operations in the Central region. 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 this week with prices ranging from $2.00-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,” according to DMN.

Strong milk production continues to provide plenty for cheese manufacturers in the West, says DMN. 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.

Cream was widely available in the Central region this week. Component levels continue to be higher this year than in previous years. Butter makers are seeing large volumes of cream on the spot market, according to DMN. 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 Thanksgiving holiday, operating butter churns seven days a week to keep up with strong retail demand. Retail orders are very strong and exports of 82 percent butterfat butter remain strong. Inventory levels are “balanced,” says DMN.

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 spot loads along with their contractual volumes. Butter churns were reportedly at or near capacity. Retail butter demand is stronger.