Whole Milk Price Analysis – United States (April 2025)

Summary

• Current average retail price for whole milk (March 2025): $4.05/gallon
• 12-month change: +4.0% (+$0.16)
• Short-term trend: Modest monthly increase (+0.6%), but a slight decline over the last quarter (-1.2%)
• Market context: Prices are stabilizing after significant volatility in recent years, with global and domestic supply factors, trade policy shifts, and consumer sentiment all influencing trends.

“Whole milk prices have risen modestly year-over-year but remain below recent peaks as U.S. dairy production expands and global market dynamics shift.”

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Trends

Recent Price Movements

Month	Avg Retail Price ($/gal)	Monthly Change (%)	Annual Change (%)
Mar 2025	4.05	+0.6	+4.0
Feb 2025	4.03	~0	+2.2
Jan 2025	4.03	-1.9	+1.7
Dec 2024	4.10	-0.9	+2.3

• The price of whole milk has increased by about $0.16 per gallon over the past year.
• After peaking in late summer/fall of 2024, prices softened slightly before rebounding in early spring.

Longer-Term Perspective

• From March 2018 to March 2025, the average retail price for whole milk rose from approximately $2.90 to $4+ per gallon—a cumulative increase of nearly 40%.
• The most dramatic increases occurred during periods of high feed costs (notably mid-2021 through mid-2023), followed by stabilization as input costs eased.

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Key Factors Affecting Prices

Supply-Side Dynamics

• U.S Dairy Herd Expansion: After several years of contraction, the U.S dairy herd is expected to expand gradually in response to improved margins and lower feed costs[5][6].

  • Feed prices—especially corn and soybean meal—have dropped significantly from their highs in previous years[6].
  • Improved weather conditions have boosted forage supplies, reducing on-farm feed expenses[5][6].
  • However, growth is limited by a tight supply of bred heifers; producers are retaining productive cows longer rather than expanding rapidly[5].

• Milk Production Growth: USDA forecasts higher national output due to both more cows and better yields per cow[1][6]. This supports stable or slightly lower farmgate prices despite firm retail demand.

Demand-Side Dynamics

• Fluid milk demand remains steady overall; whole milk retains its position as the largest segment (~41% market share)[9].
  • Health-conscious consumers continue to value nutrient-rich products like whole milk.
  • Organic and specialty milks are growing faster than conventional segments but remain smaller overall[9].

Trade & Policy Environment

• Recent tariff escalations between the U.S., China, and other trading partners have created uncertainty for export markets—particularly for processed dairy products—but fluid/whole milk exports play a minor direct role due to perishability constraints[10].
  • Tariffs on cheese/butter may indirectly affect domestic pricing if excess product stays within U.S borders.
  • Mexico remains an important export destination under USMCA with no new tariffs imposed on dairy trade so far[10].

Global Market Context

• Internationally, European Union production is tightening due to environmental regulations while New Zealand’s output is stable/slightly down; this could support firmer global dairy commodity prices if demand rebounds overseas[2][6].
• Chinese import demand may improve later in the year after three years of contraction—a potential positive for global powder/butterfat markets but less direct impact on fluid/whole milk pricing domestically.[6]

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Correlations With External Events

• Feed Cost Declines: Lower grain/feed costs since late-2023 have helped stabilize farm-level margins even as retail inflation persists at moderate levels.[1][2][5]

"Affordable feed costs and improved weather are supporting continued growth in US (and global) raw milk supply." [6]

• Tariff Volatility & Trade Tensions: Ongoing tariff disputes with China raise risks for certain processed dairy exports but do not directly impact fluid/whole-milk pricing given limited cross-border movement.[10]

"US cheese/butter trades at a discount globally... stimulating stronger export demand where possible." [10]

• Consumer Sentiment/Economic Uncertainty: High household debt levels combined with economic volatility could temper future consumer spending power—even though