Price of milk

The price of milk in the United States is expected to fall to $19.3 per hundredweight (cwt) in 2026, marking a significant 8.6% dip from the previous year. Global milk production has outpaced demand, leaving the market with surplus milk and dairy products and pushing down commodity and farm-gate prices. Domestic per capita dairy consumption has remained steady, indicating a stable base level of demand. Government price controls, enacted through mechanisms such as the 2008 Farm Bill subsidy, continue to underpin a price floor at $16.94/cwt, preventing further downside price swings.

Over the past five years, the price has risen at a 0.8% CAGR, but year by year, the price of milk exhibited notable volatility, shaped by a combination of supply chain disruptions, input cost fluctuations and macroeconomic trends. The economic reopening in 2021 spurred a partial rebound in milk prices, advancing by 2.2% as production resumed and demand normalized. However, feed prices surged in 2021, reflecting broader inflationary pressures across commodity markets and intensifying cost burdens on dairy producers. This inflationary momentum contributed to a dramatic 36.8% increase in milk prices in 2022. Weather-induced supply constraints, including widespread droughts, further exacerbated feed shortages and cost pressures. Milk prices corrected by 19.8% in 2023 as both feed prices and overall inflationary momentum eased, yet price levels remained above pre-pandemic averages due to lingering cost structures and elevated production. Prices rebounded 11.3% in 2024 despite easing feed costs.

Additional macroeconomic factors, such as persistent inflation, fluctuations in oil prices and global shifts in dairy demand, have been decisive in shaping US milk prices. Notably, global demand for dairy products from developing countries in Asia, South America and the Middle East has added upward pressure to prices. Conversely, international trade volatility and tariff imposition have introduced uncertainty about market access, further amplifying price swings. Domestic droughts, by restricting forage availability, have also increased reliance on purchased feed, thereby driving up production costs and shaping price trends.