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DairyTalk 176: From Arbitrage to Oversupply - The Structural Reset of Dairy Markets - by Helmut Demmelhuber
The global dairy market crashed in mid-December 2025 - even as U.S. exports hit record levels. Historically low feed costs are preventing the usual supply correction, keeping production high despite collapsing prices. Butter and cheese markets fell simultaneously across regions, signaling that traditional arbitrage mechanisms have broken down. With processors pivoting from butter to cheese and inventories set to collide with the 2026 spring milk flush, the industry faces a structural reset. Survival will depend on cost discipline, component optimization, and adapting to permanently lower…
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