U.S. dairy futures rebounded over the past couple of sessions as prices fought off recent multi-year lows. January Class III dairy milk futures rallied nearly 4 percent to about 16 cents a pound before taking back some of those gains Monday morning. Prices had been pressured for much of 2025 after reaching multi-year highs last September.

Much of the bearish pressure has come from supply outstripping demand. Globally, production has also been higher in Latin America, New Zealand, and Europe, according to Fonterra, a large dairy cooperative based in New Zealand. 

Global fluid milk production has grown 16 percent over the past decade and is forecast to hit a record for 2025, according to USDA data. Butter and cheese production have seen similar growth amid expanded dairy processing. 

Large increases in the number of milk cows in the U.S. have been a primary driver of increased production. U.S. producers increased the U.S. herd by about 220,000 head throughout 2025.

Butter prices have fallen 9 percent since the start of October and 24 percent below the peak from earlier this year, according to Rabobank. Cheese prices are sitting about 7 percent lower than the previous quarter.

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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS.