Butter Prices Decline

This time last year, butter prices hit record highs on the Chicago Mercantile Exchange. But as 2025 winds down, Chris Galen, American Butter Institute executive director says the pendulum has swung the other way with prices now on the decline.

“It's a matter of supply and demand. We've seen a rebound of milk production, and I think that's continuing, and more important than just overall milk output, what's really been happening is that the milk coming from the cows here in America has much more protein and butter fat in it than maybe a decade ago. But what has really been increasing has been the amount of protein and fat in that milk, the cows are more efficient in turning grain and feed into the things that are really valuable in milk, which includes protein, and that also includes the cream or the butter fat.”

Galen says there's now a larger butter fat supply, and not all of it is being absorbed by cheese, ice cream or whole milk. The excess is going into butter, building supply and putting down more pressure on prices.

“There will be probably some more price increases we get into the fall, because this is our the start of our big demand season, people buying up butter and cooking with butter for the holidays, which are far off, but it's just it's a little bit different. And just goes to show you that when we had high prices, there was a strong incentive for farmers to feed more ingredients in their cows' rations to increase butter fat output.”

Bringing an abundance of cream to the market.