The Latest: February - 2026
Product Scarcity Driving the Milk Powder Market
Product scarcity seems to be driving the gains in the milk powder market as buyers seeking product are coming up empty-handed. According to USDA’s Dairy Products report, combined output of NDM and skim milk powder (SMP) was just 170.3 million pounds in December, down 6.2% compared to the same month last year. NDM prices have been climbing since January, but the trajectory accelerated meaningfully this week. After taking a brief respite on Monday, the spot price for NDM rose every day between Tuesday and Friday, delivering an 18¢ increase, and qualifying as the commodity’s strongest week since May 2007.
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The steep December selloff was a necessary correction and was not the start of a sustained downtrend. With the exception of butter, dairy demand is outpacing supply and supporting dairy product prices.
View reportCME spot Cheddar barrels dropped to a 10-month low but came roaring back. The powder markets firmed as well.
View reportMilk yields and components remain high while an unsettled market tries to digest the holiday excess.
View reportRevenues improved throughout the year. Although not sufficient to undo years of financial distress, it is the highest revenue since 2014 and worthy of celebration.
View reportThe market did its job, encouraging production, discouraging sales, and returning to equilibrium at more sustainable values.
View reportPass the egg nog, please. USDA announced the highest Class III price in five years. That’s a lot of Christmas cheer heading for dairy producers’ mailboxes. The butter market, however, is suffering a holiday hangover.
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