Butter’s slipping, cheese feels heavy, but the protein complex is flexing hard.

In this Milk Check market roundtable, Ted Jacoby III brings together Diego Carvallo, Jacob Menge, Joe Maixner and Josh White to unpack what’s driving the mixed messages in the markets.

Listen to hear:

• Why butter could fall below $1.50 before year-end


• How global health trends are powering whey protein demand


• Why cheese exports are getting harder to move


• Whether dairy’s bearish mood could trigger a short squeeze

It’s a classic Milk Check market roundtable. Listen now to The Milk Check episode 86: Bears in Butter, Bulls in Protein.

Got questions?

Got questions for The Milk Check team? We’ve got answers. Submit your questions below and we’d be happy to get back to you or answer your question on the podcast.

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Ted Jacoby III: Hey everybody, welcome to The Milk Check. We’re gonna have an old-fashioned market discussion today. We’ve got a lot going on in dairy markets right now.

It’s the middle of October. Markets are moving, but not in the direction that they usually move in October. It seems like everything wants to go down right now, and we’ll start with the product that seems to be most bearish today, the one we’ve been talking about a lot lately. Joe, what is going on with butter?

Joe Maixner: Butter is interesting today because we’re actually up. Long-term Sentiment really hasn’t changed. There’s not really a whole lot new to talk about on the butter. Markets aren’t linear, so we’re gonna have these choppy trades here and there where some buying comes in and things get pushed. But there’s plenty of butter still out there. There’s plenty of butter being offered out there. Right now, there’s a good amount of demand, but we’re anticipating that that’s fairly short-lived. We’ve got [00:01:00 ] holiday demand for another couple of weeks here, and then that should probably tail off. We’ll see what happens after that.

Ted Jacoby III: So we’re a $1.60 and a $1.65 today. It’s Friday, October 10th. Felt like a little bit of a dead cat bounce after really dropping pretty hard earlier in the week. Is that what it is? Is it a dead cat bounce?

Joe Maixner: I wouldn’t call a quarter of a cent on spot a dead cat bounce.

The moves on the futures are 3¢ to 5¢ moves with a 10¢ plus move intraday. There’s no shortage of volatility.

Ted Jacoby III: What do you think will be happening in the next month? You think maybe we’ll bounce off this, go up a little bit for the next couple of weeks? Then all the orders that need to get filled for the holidays get filled? And then what?

Joe Maixner: I think we take another leg lower. I think we’ll be sub $1.50 before the end of the year.

Ted Jacoby III: I agree. We’re at prices so low that a year ago it would’ve been really hard to imagine we’d ever get here.

And the idea that we could even go lower from here just seems unbelievable, but that’s the market we’re in right now.

Joe Maixner: Less than 24 months ago, we were all talking about $4 butter [00:02:00 ] coming, and there was not enough fat to keep up with demand. And now we’re potentially going to the $1.40s. There’s so much fat that we can’t consume it all. But we also have to remember that this is all cyclical, and at some point, these low prices are gonna cure the low prices.

Ted Jacoby III: Meanwhile, let’s talk a little bit about protein. The more bearish we get on butter, the more bullish the protein markets seem to get. What’s going on in the protein markets right now?

Josh White: I think we gotta define which we’re talking about with protein because if it’s protein with over 34% protein, it’s pretty hard to find, particularly with the whey proteins. If it’s 34% or under, most unstandardized non-fat dry milk is quite a bit above 34%, so maybe let’s say 40%, it seems like we can’t find a bottom. So, really, two very different markets at the moment. So, if we start on the high end of the market, we’ve experienced over the past two years now a continued move higher and the appreciation per unit [00:03:00 ] protein for whey protein products, in particular WPC 80 and WPI. We want to credit certain things as catalysts, like GLP-1 adoption in the U.S., but I think we gotta be even bigger than that.

 Health and wellness are worldwide. We’re seeing strong growth in demand. People are paying attention to what they eat. Clearly, they’re concluding that whey proteins supplemented in many, many products is a good way of increasing your protein intake. That doesn’t seem to be changing, and although we’re talking about very, very high prices in the U.S., Europe also has very, very high prices.

Josh White: And as of late, it’s leaving additional markets, other markets, the import markets for these products, wanting more. We’ll see an additional load or two of product available in the U.S., and it’s sold to a U.S. customer before the international customer even gets a look at the price.

I don’t see that changing. And the reason I can confidently say that is because we’ve got customers who are looking for purchases further out than they traditionally would. Normally, that’s a quarterly [00:04:00 ] traded product. About a month from now, in November, that’s typically when we’d be talking about Q1 prices, and as of today, we’ve got customers that are asking for any product available and willing to commit to the second quarter of 2026.

In addition to that, there are things that have disrupted the supply chain. In 2025, we had several new facilities coming online, and not all of them have come online as expected, so we’re anticipating some additional supply of WPC 80 and WPI. Some of it is materialized, and some of it has not yet. But this isn’t a supply-shortage-driven issue. This is truly a demand, new demand creation, and we’re seeing that in a lot of different areas. We’re seeing incremental growth in the normal segments like sports, nutrition, shakes, things like that.

We’re seeing inquiries on a weekly basis from consumer packaged goods products, looking to infuse protein into some of their traditional snack foods and products like that. Even this week, the headlines coming out like [00:05:00 ] Starbucks introducing new protein coffees. These are all new drivers.

This is all happening at the same time that we’re seeing increasing demand for acidified whey proteins going into beverages. There’s just more demand right now than we have supply. It’s gonna take the market a while to cure that issue. We have a lot of cheese production in the U.S., so it’s not an issue that we don’t have the whey solids available, but do we have enough processing of these high whey protein products?

Not yet. Also, when you’re in a very, very tight market, just like Joe mentioned, “low prices will cure low prices,” at some moment, lack of supply, high prices will cure high prices. I’m not sure how that’s gonna shake out as we go into 2026, but right now it feels like, at least for the first half of the year, we’re gonna remain very, very tight whey proteins.

Now let’s shift down the complex a little bit. Anybody who can’t afford to pay for WPI with these new applications is looking to trade down. WPC 80 is, as mentioned, very, very firm [00:06:00 ] and in very, very tight supply. Those that might have traditionally used WPC 80, maybe not instantized WPC 80, but regular WPC 80, are finding that they can’t compete with the new demand creation in that category, and they’re trading down. That’s already impacting alternative proteins. We’re seeing more inquiries for vegetable protein and other products in high concentration. The other half of that story right now is we are big producer in this country, traditionally of WPC 34 and then shifting out of the way complex into the milk protein complex, we are increasing our production of MPC 70s, MPC 85, MPI, but we still make a lot of non-fat dry milk, and that is a totally different story.

Diego Carvallo: When it comes to the non-fat complex, I think it follows the same story as most of the other products. There’s a lot of milk in the U.S. and in other milk sheds, and a lot of that product is ending up in non-fat or skim. We’re expecting that the price during the [00:07:00 ] first quarter of next year is gonna be heavily under pressure because the U.S. is probably gonna have 10% or 15% more nonfat production than it had in 2024 just because of what happened in California, right? It’s almost inevitable unless we go into a steep discount to European and New Zealand products that we start building inventory. Because Mexico itself cannot sustain the U.S. from building inventories if we have such growth. A lot of discussion around how much milk are the cheese plants gonna take out of that strong growth that we’re seeing?

And as a summary, the conclusion where we have arrived is that even with the cheese plants growing and taking 3% to 4% more milk this year, we’re still gonna have double digit grow