Butter Prices Fall to their Lowest Levels in 3 Years

USDA/FPAC photo by Preston Keres

U.S. butter prices have fallen to their lowest levels in over three years as booming production outpaces demand. After several seasons of strong consumer appetite and investment in high-fat milk and new processing facilities, the industry faces oversupply. USDA data shows July output exceeded 180 million pounds — the highest for that month in over a decade — driving futures prices down nearly 30% since midsummer.

Industry analysts emphasize that demand remains healthy, with Americans consuming more butter and global buyers taking advantage of lower prices. In fact, U.S. exports have surged, even reaching European producers, as domestic disappearance stays well above average. However, the glut of American-style butter contrasts with tight supplies of premium European-style products, where demand for higher-fat, specialty butters such as Irish imports continues to grow.

Analysts caution that the downturn may persist as milk production remains strong and food service demand softens. While cheaper prices have boosted exports in the short term, the imbalance between supply and consumption could weigh on the broader dairy market, with cheese and fluid milk prices also under pressure. Many experts suggest the industry has reached a tipping point, where sustained oversupply is reshaping expectations well into 2026.