IFCN Combined World
Milk Price Update

Butter hits a 24-month low as production outpaces demand; cheese rises on holiday buying

Global milk prices continued their downward march in December, marking the seventh consecutive month of declines. The IFCN World Milk Price fell by 2.2% in December, extending a trend that began in June 2025. Key drivers remain oversupply and resilient production across major regions, shaping a challenging year for dairy farmers and producers.

Oversupply Drives the Decline

• Butter at a 24-month low: Global butter production from the US, EU, and Oceania outpaced demand, weighing on prices.
• Cheese nudges higher: Holiday demand provided a temporary lift, offering a counterpoint to broader price pressures.
• Milk powders subdued: The market for milk powders remained soft during the holiday season, contributing to the overall price slide.

Market Outlook

• What to watch next: Seasonal factors vs. structural oversupply—will the current oversupply ease with seasonal demand, or is a longer-term supply adjustment underway?
• Potential price catalysts: Policy changes, herd dynamics, feed costs, and export trends could influence the pace of any supply rebalancing.