After her conversation with Katie Burgess, Stephanie Hoff saw this sign in the Starbucks drive thru.
USDA data released this week showed continued high butterfat content in milk, adding to an already robust supply. Analysts hope the early price dip will encourage retailers to lock in promotional sales ahead of the high-demand holiday season.
“There’s a lot of fat coming off the farm,” says Ever.Ag Dairy Broker Katie Burgess. “We need to find folks to eat it.”
Butter prices have dropped sharply, falling from $2.62 to $1.62 per pound over the past three months due to the surge in milk fat levels.
Meanwhile, shifting consumer preferences are reshaping dairy markets. As demand for fat-heavy products like cream cheese and ice cream declines, the popularity of high-protein options is surging, Burgess says, fueled in part by the rise of GLP-1 drugs like Ozempic, which are driving consumers toward leaner diets.
“Protein is king right now,” she says, noting that values for high-protein whey are “through the roof,” and even major brands like Starbucks are launching higher-protein offerings.
Looking ahead, dairy producers may need to reassess their approach. While it’s easier to increase milk fat than protein, the industry is now facing questions about how to better balance the two, especially in cheese-heavy states like Wisconsin.
“The proportion is getting a little skewed toward fat,” Burgess warned. “There’s definitely discussion among manufacturers about focusing more on protein going forward.”
As the dairy sector heads into the critical holiday quarter, all eyes will be on global markets, domestic buying patterns, and how producers adapt to the shifting supply-and-demand landscape.
Cheese
After hitting recent lows, cheese prices in the U.S. are showing signs of a rebound this week. This bounce follows a familiar pattern seen throughout the year: prices dip into the low $1.60s per pound before renewed buying activity nudges them higher.
“It’s good to see prices come up off the lows,” Burgess says, highlighting the seasonal strength expected during the fall months, such as for cheese-heavy foods like pizza and football-season snacks.
Class III milk futures are also trending slightly higher. However, U.S. producers may soon face increased global competition. European cheese prices are now starting to fall, following improved milk production across the continent in the third quarter.
“Exports have been fantastic this year, even hitting record levels, largely because U.S. cheese has been priced lower than the rest of the world,” Burgess explains. “But with European prices coming down, we could face more competition in the months ahead.”
Domestically, however, cheese demand remains mixed. While seasonal factors should support consumption, overall demand has been soft in 2025. Consumers are increasingly price-conscious, both at restaurants and in grocery aisles.
“Some food service chains offering value menus are seeing better traffic,” Burgess says. “But broadly, people are watching their spending, and dairy isn’t always making it into the cart.”
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