Business Environment Profiles - United States
Published: 17 July 2025
Price of milk
20 $ per hundredweight (cwt)
1.7 %
The price of milk represents the price of raw, unprocessed milk received by dairy farmers. Raw milk is sold to processors for the manufacturing of final dairy products, such as fluid milk and cream, butter, cheese and powdered milk and cream. Data is sourced and forecasted from the US Department of Agriculture's National Agricultural Statistics Service.
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The price of milk in the United States is expected to reach $20.55 per hundredweight (cwt) in 2025, marking a modest annual increase of 1.0% over the previous year. This slight rebound in price is primarily attributable to continued volatility in feed prices and production volumes. The recent decline in feed costs has provided some relief to producers following sharp input price escalations in preceding years. 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.
The price of milk exhibited notable volatility over the five years to 2025, shaped by a combination of supply chain disruptions, input cost fluctuations, and macroeconomic trends. The onset of the COVID-19 pandemic in 2020 led to a 3.2% contraction in milk prices owing to reduced demand from export and food service markets, particularly those linked to institutional buyers such as schools. 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 declining 19.0% in 2023 as both the price of feed and overall inflationary momentum eased, yet price levels remained above pre-pandemic averages due to lingering cost structures and elevated production. Prices edged down a further 0.7% in 2024 in response to easing feed costs, but overall market dynamics kept prices at relatively high levels compared with the years prior to the pandemic.
Additional macroeconomic factors like persistent inflation, fluctuations in oil prices, and global shifts in dairy demand have been decisive in influencing 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 the imposition of tariffs have introduced uncertainty regarding market access, further amplifying price swings. Domestic droughts, by restricting forage availability, have also increased reliance on purchased feed, feeding directly into higher production costs and thereby shaping price trends.
The market has remained characterized by price volatility through the five years to 2025, with supply and demand shocks, offsetting the stabilizing impact of domestic consumption and government price interventions. The interplay between input cost pressures, supply chain constraints, global export demand, and climate-related disruptions has created a challenging and unpredictable pricing environment for US milk.
The price of milk is forecast to rise to $21.44 per hundredweight in 2026, an increase of 4.3% fr...
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