USA: Has butterfat production begun to outpace consumer demand?

This January, U.S. butterfat levels reached a record 4.46%, a significant increase from 4.03% in January 2020 according to USDA’s Agricultural Marketing Service. The U.S. produced a record 2.2 billion pounds of butter in 2024, though domestic demand remains unmet, suggesting production may exceed consumption.

Corey Geiger, lead dairy economist for CoBank, notes the current market might be oversupplied with butterfat. Despite ample supply, long-term trends indicate a continued demand for full-fat products. The U.S. previously increased its butter imports significantly, from 10.2 million pounds in 2010 to 172.6 million pounds in 2024, mainly from Ireland due to its higher butterfat content, which are favored in high-end pastries.

Despite the increase in production, the U.S. butter market remains inadequately supplied domestically and internationally. The U.S. only exported 4.7% of its milk production on a milk-fat basis in recent data, essentially unchanged from 2011 levels, whereas skim-solids basis exports increased substantially, highlighting disparities in butterfat market alignment.