US NFDM prices dropped around $0.20/lb ($500/mt) in the space of a week, and the move travelled. At the most recent GDT pulse event, NZ SMP fell $200/mt compared to the previous week. European SMP eased alongside. The direction across major markets is the same: milk powder prices are coming off.

The sell-off is primarily supply-driven. Additional US production is coming online, and demand is shifting toward European and NZ origins as US prices trade at a premium. That spread may not close quickly. Vesper’s analysis suggests the US-EU price gap could remain relatively wide in the months ahead, even as the two converge directionally.

Butter: the export machine that holds prices up

Butter told a different story this week. CME butter closed at $1.6350/lb, up $0.11 on the week, following the cold storage report. Production is strong and imports are elevated, but stocks are only rising modestly in seasonal terms. The reason: prices at these levels are generating significant export demand, well above the typical monthly range of 5 to 10 million lbs. Without that export volume, the US would have been on track for record-high butter stocks. Exports are what’s keeping the price floor in place.

The cold storage report was less flattering for cheese. US production is at an all-time high, and so are consumption and exports, but neither is enough to offset the supply build. CME Cheddar Blocks fell $0.0525/lb on the week.

Fourteen months of growth, and the rate is slowing

Behind the price movements is a US milk supply picture that keeps expanding. April output came in at 19.960 billion pounds, up 2.72% year-on-year, the 14th consecutive month of positive growth. But the rate peaked at 4.55% in November 2025 and has been easing since, sitting at 2.72% in April. The pace has roughly halved from its peak while the volume keeps building.

Growth is concentrated in the interior. The Midwest led at +4.35% year-on-year and the South followed at +3.97%. The West, the largest producing region, grew at +1.92%. The Northeast was the only region in decline, down 0.21%. About three-quarters of the national gain comes from more cows in the barn rather than higher yield per cow: the US dairy herd reached approximately 9,645 thousand head in April, up around 2% year-on-year, while average yield per cow rose just 0.7%.

The full Vesper US Weekly covers the milk powder spread outlook, the GDT pulse results, and the butter export picture in detail: https://app.vespertool.com/market-analysis/3041