FMMO Milk Prices Fall Below $20, Impacting U.S. Dairy Producers

The Federal Milk Marketing Order (FMMO) for November 2025 has reported that Uniform Milk Prices (UMP) have dropped below the $20 per hundredweight mark in several U.S. regions. This marks a continuation of the downward trend seen earlier in the year, significantly impacting dairy producers' profitability.

The primary factor influencing these lower UMPs is the interaction between component values and inter-class differentials, notably the negative or narrowing Producer Price Differential (PPD). The disparity between Class III prices, reflecting cheese markets, and Class IV prices for butter and powder has contributed to the revenue distribution challenges across the FMMO pool.

Producers are experiencing intense pressure on margins due to persistent high input costs for feed, fuel, and labor. This financial strain forces difficult decisions regarding capital expenditures and herd management, potentially affecting long-term sustainability and growth within the dairy sector.

Regional variations in UMPs are evident, with areas producing high milk volumes but lower utilization in the premium Class I segment witnessing the largest declines. The oversupply in certain regions remains a critical issue, influencing current dairy prices.

Industry analysts indicate that any significant recovery in milk prices will depend on increased demand or a decrease in U.S. milk supply. The recent FMMO report emphasizes the need for operational efficiency and responsive strategies to navigate the prevailing market volatility.