US butter markets have proven considerably tighter than initially anticipated heading into 2026. January production came in at 231 million pounds, up 6% year-on-year, but strong domestic demand and increased exports have more than absorbed that output. Stocks are down 17% versus a year ago, around 15% below the five-year average, and at their lowest level in five years.
An additional technical factor tightened the market in early March: the annual CME “new crop” rollover, which from 1 March restricts eligible butter on the CME Call to product manufactured after December of the prior year, effectively reducing eligible supply overnight and contributing to a sharp price increase.
Cream multiples remain low, limiting how aggressively processors can increase churning output. The combination of lean stocks, active exports, and the new crop dynamic means the US butter market is pointing upward for the foreseeable future, through at least the first half of 2026.
On the powder side, the NFDM outlook has shifted materially. Rather than abundant production, US NFDM production has been running at multi-year lows as processors redirect capacity toward higher-value alternatives including cheese, fresh milk, and protein concentrates. January NFDM/SMP production came in below year-ago levels, and stocks of around 215 million pounds have barely moved since December. With the US sidelined as a reliable exporter, international buyers have shifted toward European and New Zealand origins.
In the whey complex, WPC80 remains the tightest product: Q2 volumes are close to being fully sold out, US safety stocks have fallen to below one month of production, and negotiations are increasingly about securing any volume rather than optimising price. US WPI production growth was up 12.4% year-on-year in January, though this is running slower than WPC80 growth, confirming WPC80 as the more acutely constrained market.
Read the full US Dairy market outlook in Vesper’s free download:l https://vespertool.com/downloads/
