Dairy Industry News Roundup: Week of December 6-12, 2025

# Dairy Industry News Roundup: Week of December 6-12, 2025 Welcome to this week's roundup of the most important news and developments in the dairy industry. Here are the top stories from December 6-12, 2025. --- ## 1. Global Dairy Trade Index Plummets 4.3% as Oversupply Continues The **Global Dairy Trade (GDT) auction** on December 3 recorded its biggest single decline since early September, with the overall index falling **4.3%**. This marks the **8th consecutive auction decline** as global milk production continues to outpace demand. Key results from GDT Event 393: - **Butter**: -12.4% (the steepest drop, now at $5,169/metric ton) - **Anhydrous Milk Fat (AMF)**: -9.8% - **Whole Milk Powder (WMP)**: -2.4% - **Skim Milk Powder (SMP)**: -1.6% - **Cheddar**: +7.2% (the only bright spot, at $4,639/metric ton) Industry analysts note that all major dairy-exporting regions—the U.S., EU, New Zealand, and South America—are experiencing simultaneous production growth, a rare "wall of milk" situation that continues to pressure global prices. *Read more:* [Global Dairy Trade](https://www.globaldairytrade.info/) --- ## 2. House Expected to Pass Whole Milk for Healthy Kids Act Following the **Senate's unanimous passage** on November 20, the House of Representatives is expected to vote on the **Whole Milk for Healthy Kids Act** soon. The bipartisan legislation (H.R. 649/S. 222) would allow schools to serve whole and 2% milk in addition to the currently permitted fat-free and low-fat options. Key provisions: - Allows schools to offer whole milk (3.25% fat) and reduced-fat milk (2%) - Excludes milk's saturated fat from USDA's 10% cap for school meals - Maintains availability of all milk fat levels as parental choice The House Education & Workforce Committee passed the bill 24-10 in February 2025. A similar bill passed the House 330-71 in 2023, suggesting strong bipartisan support. Industry observers expect the bill to reach President Trump's desk in December 2025 or early 2026. *Read more:* [Congress.gov - H.R. 649](https://www.congress.gov/bill/119th-congress/house-bill/649) --- ## 3. Dairy Margins Continue to Erode as Milk Prices Hit New Lows Dairy margins continued their decline through late November and into December as milk prices reached new lows for the year. The **November Class IV price** dropped to **$13.89/cwt**—the lowest since February 2021—while component values showed significant weakness. November 2025 pricing: - **Class II**: $14.54/cwt (down $1.48 from October, down $6.98 year-over-year) - **Class IV**: $13.89/cwt (lowest since February 2021) - **Butterfat**: $1.7061/lb (down $1.20 year-over-year, lowest since February 2021) - **Protein**: $3.0143/lb (up $0.14 from October—a rare bright spot) - **Nonfat Solids**: $0.91/lb (second lowest since November 2020) Despite lower prices, most dairy farmers remain above cost of production due to historically low feed costs, with corn around $4.60/bushel and soybean meal near $290/ton. *Read more:* [USDA Dairy Market Outlook](https://www.ers.usda.gov/topics/animal-products/dairy/market-outlook) --- ## 4. Hiland Dairy Tyler Plant Expansion 70% Complete **Hiland Dairy's $100+ million expansion** of its Tyler, Texas processing facility is now 70% complete and on track to begin operations in April 2026. The 96,000-square-foot expansion will quadruple the plant's output to over **1 million gallons of milk per week**. Expansion details: - Adding automated packaging technology - Installing 4 new milk silos - Creating 80 new jobs - Building new administrative facilities This project is part of the **over $8 billion in dairy processing infrastructure investments** happening nationwide, representing one of the largest periods of capacity expansion in U.S. dairy history. *Read more:* [KLTV News](https://www.kltv.com/2025/12/09/hiland-dairy-tyler-plant-expansion-set-begin-operations-april/) --- ## 5. California Bird Flu Reinfections Challenge Containment Efforts California's dairy industry continues battling **H5N1 highly pathogenic avian influenza (HPAI)**, with a concerning new development: **43 reinfections** have been confirmed—dairies that were previously cleared but tested positive again after being released from quarantine. Current status (as of December 2025): - **771+ affected herds** in California - **43 reinfections** confirmed - **38 human cases** in California (mostly mild symptoms in farmworkers) - All recovered dairies remain on bi-monthly surveillance testing The reinfections have prompted continued restrictions, including the ongoing **ban on dairy cattle exhibitions** at fairs and shows. USDA's National Milk Testing Strategy, implemented in early December, requires mandatory bulk tank testing in affected areas. *Read more:* [CDFA HPAI Information](https://www.cdfa.ca.gov/AHFSS/Animal_Health/HPAI.html) --- ## 6. FMMO Skim Milk Composition Changes Take Effect December 1 Updated **Federal Milk Marketing Order (FMMO) skim milk composition factors** went into effect on December 1, 2025, completing the final phase of the most comprehensive FMMO reform in over 20 years. New milk composition standards (effective December 1): | Component | Previous Standard | New Standard | |-----------|------------------|--------------| | Protein | 3.1% | 3.3% | | Other Solids | 5.9% | 6.0% | | Nonfat Solids | 9.0% | 9.3% | These updated factors better reflect modern milk composition, which has increased significantly since the previous factors were adopted in 2000. Producers in skim milk-based pricing orders (Appalachian, Southeast, Florida, Arizona) will see increased skim milk values. *Read more:* [USDA AMS Federal Milk Marketing Orders](https://www.ams.usda.gov/rules-regulations/moa/dairy) --- ## 7. Replacement Dairy Cow Prices Reach Record Highs Replacement dairy cow prices continue setting records, reaching **$2,660/head** nationally in January 2025—up **$770 (+29%)** from a year earlier. December auction reports show top-quality Holstein dairy cows commanding **$3,000-$4,100** per head. Driving factors: - U.S. dairy heifer inventory (over 500 lbs) down ~40,000 head year-over-year - Increased beef-on-dairy crossbreeding reducing available dairy replacements - Strong beef prices making cull cows more valuable - Tightening heifer supply nationwide This trend is offsetting some of the margin pressure from lower milk prices, as dairy farmers find additional value through beef genetics and replacement sales. *Read more:* [USDA Dairy Comprehensive Report](https://www.ams.usda.gov/mnreports/lsmdairycomp.pdf) --- ## Market Snapshot: Week Ending December 12, 2025 | Indicator | Price/Value | Change | |-----------|-------------|--------| | Class III Milk (Dec futures) | $15.39/cwt | ↓ 6¢ (Dec 11) | | Class IV Milk (November) | $13.89/cwt | Lowest since Feb 2021 | | December Class I Base | $18.21/cwt | ↑ $1.46 from Nov | | GDT Price Index | -4.3% | 8th consecutive decline | | CME Butter | ~$2.52/lb | Down from $3.70+ last year | | CME Dry Whey | $0.745/lb | Strong demand for protein | | Corn (Feed) | ~$4.60/bu | Favorable for margins | | Replacement Dairy Cow | $2,660+/head | Record highs | --- ## Looking Ahead **Key dates to watch:** - **December 16:** Next Global Dairy Trade auction (Event 394) - **December 31:** USDA announces final December class and component prices - **Early 2026:** House expected to vote on Whole Milk for Healthy Kids Act **Industry priorities:** - Navigating tightening margins as milk prices decline but feed costs remain low - Continued biosecurity measures and HPAI monitoring - Managing oversupply conditions across all major exporting regions - Positioning for new processing capacity coming online in 2026 --- *Stay informed with Therio's weekly dairy industry roundups. Subscribe to our newsletter for the latest updates delivered to your inbox.*