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  • ZISK

What is Moving the Price of Dairy Commodities that are used to Price Producer Milk?

Producer milk prices are low. They are down because the commodities used to price producer milk are low. Why are they low? The commodity prices are based on actual transactions of purchases and disappearance from wholesale inventories of these products. The milk pricing process is managed by surveys conducted by the Agricultural Marketing Services (AMS). The commodity prices are influenced by the availability of these commodities. This post will examine the wholesale inventories, production of the commodities, and the exports as well as domestic commercial withdrawals.

Below are the most current data on butter, cheese, nonfat dry milk (NDM), and dry whey.


Butter is maintaining its price and the price is decent. As shown in Chart I below, butter inventories are normal. In 2023 May inventories were 5% higher than 2022 and 16% lower than 2021. This is consistent with the pricing in 2021 and 2022. In 2021, butter prices dipped when butter inventories were high. In 2022, inventories fell, and prices escalated. By 2023, inventories of butter are midway between 2021 and 2022 levels and so are the butter prices.

August 13, 2023 by John Geuss



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