Inflation for U.S. consumers is above the 2% guideline. Is the price of food contributing? Is the price of dairy products contributing to high prices? This subject was covered one year ago in this “Milk Pay” blog. A year later retail Cheese prices are up a little, fluid milk prices have not changed much, and butter prices have declined.
This post will also cover the prices in the U.S. food price index. All data is through March 2026.
U.S. FOOD PRICES
The price of food has continued with steady increases (Chart I). Over the span of 63 months, food prices have increased by 26%. Most of the increase (20%) occurred in 2021 and 2022 when inflation was out of control. Chart II shows the percent increases by month. In the month of August 2022, the increase was 11.4% vs. the prior year. Currently the consumer food price index is increasing at 2% annually.
Cheese is the largest user of milk in the U.S. Producer payments are linked to Cheddar cheese wholesale prices, so only cheddar retail pricing is used here.
Wholesale cheese prices have gone down as production is exceeding domestic consumption. However, the retail prices are relatively high (Chart III).
Chart IV shows the volatility in the Cheddar cheese retail prices in terms of percent annual change. Over the 62 months in Chart IV retail prices of Cheddar cheese has increased by only 5%. In 2022, the high inflation in the U.S. increased Cheddar cheese retail prices at an annual increase of 14% in December of 2022. The monthly price changes since then have varied by only 6%.
There is really no retail inflation in Cheddar cheese prices since the 2022 increases which have remained.
Chart VI tracks the annual percent changes in retail milk prices. As with other dairy products the prices came to highs in 2022 with price gains of 22%. Since then, prices have fallen slightly and are stable.
There is no inflation in milk prices in the last two years.
Butter retail Prices have risen and fallen as domestic consumption has increased. With the increase in production, wholesale and retail prices have fallen in 2025 and 2026 YTD. Currently butter retail prices are in a decline and are at the lowest prices in five years. The price of butter will likely continue to decline.
There is no inflation since 2022 in retail milk prices.
All food index prices are currently stable around 2% annually. However, the huge increases in 2022 are still in the prices and will continue hold prices well above pre 2022 levels. The same is generally true for all individual dairy products.
Cheese is the biggest user of milk. Like the other products, 2022 prices of Cheddar cheese shoot up. They have since fallen a little since 2022 but are still more that pre 2022 prices.
Whole milk retail prices went up in 2022 and are now stable with minimal price increases. The 2022 price increases are still in current prices. There have been no major corrections.
Butter went through the huge 2022 price increases and stayed there until mid 2025. Prices are coming down with the current ample butter inventories. Will they reach the pre 2022 prices levels?
Retail dairy prices will continue to be followed in future blog posts.
