Dramatic Decline in U.S. Class I Milk Prices for 2026
The Federal Milk Marketing Order (FMMO) has announced a sharp decline in the Class I base milk price, starting 2026 at $16.35 per hundredweight (cwt). This price represents a $1.86 drop from December 2025 and a $4.03 decrease compared to the same time the previous year. This is the lowest price record since April 2021, undoing the post-pandemic recovery gains.
Regional disparities continue to affect manufacturers and cooperatives, with the national average across all FMMOs projected to be approximately $20.47 per cwt for January. Florida maintains the highest regional price at $23.15 per cwt, contrasted by Arizona’s low of $18.95 per cwt. These variations will require immediate operational adjustments to maintain margins.
The components of the milk check, such as skim and butterfat, are also experiencing downward trends. The base skim milk price is now $11.17 per cwt, reflecting a $1.57 decrease from the previous month. Additionally, the butterfat pricing factor declined by 10 cents, now at $1.59 per pound.
In the technical pricing formula, Class III milk, priced at $11.17 per cwt, has surpassed Class IV at $8.43 per cwt by $2.74, making Class III the primary mover for January's calculations. These figures are critical for determining the regional FMMO uniform milk prices, which will be announced between February 11 and 14.
The 2025 annual average milk price was $18.94 per cwt, already indicating market weakness by finishing $1.41 lower than in 2024. With the start of 2026 significantly below this average, the industry faces its most restrictive pricing environment in five years.
