December was a month of catch up for the government to resume some of the final reports missing from the market since the government shut down. The Cold Storage Report was one of the most awaited reports, released December 23rd. This brought the market up to speed on what inventory was on hand for most for butter and cheese as well as some frozen meat, fruit and vegetables.
Cheese stocks were down 1 percent from the previous report but up 2 percent from November 2024. Swiss cheese was the only product with more on hand than last month but interestingly enough, it was the only product with less than a year ago. Butter stocks were down 8 percent from last month and down 1 percent from 2024.
To put in in perspective, when comparing to 2023 stocks, butter was down 1% from 2023, while cheese stocks were down over 5 percent from two years ago. Therefore, the report could have been perceived as somewhat friendly, unfortunately, it just wasn’t enough to get the market excited, given the surplus of production seen in 2025.
While milk production has been declining from the summer highs, it is still seen to be well above previous year’s production throughout most of 2025, with the most recent report showing production up 4.5% in November when compared to 2024. Even if the market continues to slow production, the total production for the year still exceeds any domestic or foreign demand seen today.
Exports Grow, but at the Cost of Price
Foreign demand has been a bright spot in the U.S. dairy market, despite the lack of Chinese demand, there has been increases in export demand across most dairy sectors with butterfat showing the largest gains in 2025 with 150 percent increase from 2024 as of the September data released mid-December. This extra demand is a direct correlation of falling butter prices with the surplus of domestic product. Cheese sales also set a new monthly record with a 35 percent increase in export demand year over year in the month of September.
As we follow trends, we can see that U.S. cheese had more product sold in foreign markets in the first nine months of 2025 than was sold in any single year outside of 2024. Butter has been impressive to watch despite the tensions with Canada. While sales to our northern neighbor have declined, sales to The Netherlands, Australia and Saudi Arabia have exploded. Although new foreign demand was prevalent, it came at the cost of lower prices in order to open opportunities in those foreign markets.
In terms of foreign markets, the question asked most today is what impact the capture of Venezuela’s President could have on dairy markets, if any. To answer that, it is more complicated than looking at today’s import volumes. For example, the United States is the leader in supplying whey product and SMP to Venezuela, however Columbia and Brazil dominate most of the supply for liquid and condensed milk products being shipped into the country.
Venezuela’s Growing Role in U.S. Trade
When looking over the past five years, the United States has seen a large increase in demand for its products in Venezuela, becoming the second largest supplier of agricultural products for their country. Dairy and pet food have grown the most, although still a small portion of the products we ship to Venezuela. The most notable agricultural product shipped to Venezuela is soybean meal as we are their biggest supplier. For the cattle industry, our genetics have been in high demand as they work to improve their herds.
President Trump has stated that the U.S. will run Venezuela for the short term which could be beneficial to support cost effective trade with the country for many agricultural products. For dairy, they have a modest demand in the big picture for our country. Increase soybean meal demand could cause more issues for the U.S. Dairy farmers as it could increase cost of production. All of this is speculative in these early stages. What we do not know is how much instability this could bring to the Venezuelan economy or what global backlash could come in the next few months.
In conclusion, the U.S. dairy industry is fighting over supply and looking for a story to help eat through the surplus of product getting produced. While there is no near-term solution, there are a lot of unanswered questions in world trade as we navigate through tariffs, geopolitical conflict and strong global demand.
Sarah Jungman is a commodity broker with AgMarket.Net and AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Sarah’s office is located in Winterset, Iowa and she may be reached at 515-272-5799 or through the website www.agmarket.net.
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