The wholesale prices of cheese, butter, nonfat dry milk (NDM), and dry whey drive the prices of producer milk. They are calculated weekly and then consolidated for the 4-week and 5-week months used for calculating producer milk prices. The most current data on the wholesale prices of these four commodities are available in the weekly prices announcements.
BUTTER
Butter wholesale prices reached a weekly high of $3.33 per pound in October 2023 (Chart I). Weekly butter prices then dropped to a low of $2.14 in March 2025, a 36% drop. Since then, the price of butter has increased and is stable around $2.36 per pound. With the current lower price of butter, it is still worth significantly more than cheese, which will keep milk protein prices low. (See this post for more details on the protein pricing formula.)
CHEESE
With the start of June, cheese prices used in the USDA formulas will be based on blocks of cheddar cheese only. Chart II below follows the weekly movement of wholesale cheddar cheese block prices. In July of 2023, prices fell from a high of $2.40 per pound in May of 2022 to $1.41 in July of 2023, a fall of 41%. Currently cheese is valued at $1.88 per pound, a mid-point in the 41 months covered.
NDM
NDM prices have also been very volatile (Chart III). Prices have fallen from a high of $1.84 per pound in July of 2022 to $1.10 in September of 2023, a 41% drop. Prices for NDM have remained low and are currently at $1.20 per pound. NDM is a byproduct of butter production. With the increase in butter production, more NDM must find a home. Expect the low prices to continue.
of DRY WHEY
Dry whey is a byproduct of cheese making. Cheese making is the largest use of U.S. milk. Prices have been very volatile ranging from a high of $.80 per pound in May of 2022 to a low of $.25 in August of 2023, a fall of 69%. Dry whey is largely an export item, and the whey exports are primarily to China for swine diets. With the tariff negotiations in process, finding a home for this byproduct may be difficult and prices may drop further.
SUMMARY
None of the commodities covered above show strong signs of significant increases in prices. Cheese is the only commodity showing some recent signs of price increases, but the prices are currently only in a midrange. For a significant gain in the price of milk protein, cheese would have to become higher priced than butter. Currently butter is at $2.36 per pound and cheese is at $1.88.
June is the first month using the new USDA pricing formulas and as June producer prices become available, they will be reviewed in future posts. The wholesale value of the dairy commodities covered in this post are not altered by the new USDA pricing, but the new USDA formulas will lower producer prices.
