Butter is down. Powder is heavy. Cheese is struggling.

But whey proteins? They’re the shining star.

In this episode of The Milk Check, host Ted Jacoby III sits down with Josh White, Gus Jacoby, Diego Carvallo, and Jacob Menge to break down what’s really moving the dairy market this fall.

We cover:

• Why WPC 80 and whey protein isolate remain in tight supply


• How weak butter, powder, and cheese are reshaping herd economics


• What today’s demand means for dairy markets heading into 2026

They’re the shining star now, but can whey proteins hold at $10/lb without burning out?

Listen now to hear Jacoby’s take on what’s in the stars for dairy this year and beyond.

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: Welcome, everybody, to the September edition of the Jacoby Market discussion on our Milk Check podcast. Today, we’ve got Josh White, head of our dairy ingredients group. We’ve got my brother Gus to talk about what’s going on with milk, cream, and UF milk. We have Diego Carvallo on our international business and nonfat business teams.

And then we got Jacob Menge with risk management and trading strategy. So, Gus, let’s go ahead and start with you. It’s September. This is usually the time of year when everybody is shipping a lot of milk into the Southeast. How do things look in milk, and what’s going on in cheese and UF right now?

Gus Jacoby: Certainly, Ted, milk has gotten tight as it typically does this time of year. I wouldn’t say, though, relatively speaking, for mid-September that we’re all that tight. Obviously, milk production reports have been up recently; there’s more milk than we had last year. Yes, we’ve added processing capacity in [00:01:00 ] certain regions of the country, like the western portion of the upper Midwest, and, of course, the Southwest.

However, in many areas, early fall tightness does exist. But it’s a bit longer than last year. Where we really need to look at, though, is the component area and some of the products, such as sweet cream. That’s certainly very long.

We know about butterfat being much higher today than it was just a couple of years ago. And I would say the cream markets, which typically in early fall draw some pretty high multiples, those multiples are tempered to a fair amount. Cream can be had at a time when it is typically tough to find.

So, there’s no doubt that what we’re seeing out in the marketplace, and I would say from coast to coast, is more cream than what we’re used to. And certainly, more of a buyer’s market in the fall than it ever has been, at least in the history of the industry that I’ve seen.

 Now, on the flip side, the protein markets are a bit interesting. I wanna let Josh speak on the powder side, but we are seeing that UF milk is having a strong comeback. People need protein, whether it be for fortification [00:02:00 ] needs and natural cheese, whether it be for health and wellness shakes, whether it be for what have you. That product is getting a lot of attention. And certainly, the one area that I’m seeing this fall that’s got some tightness to it.

Ted Jacoby III: Josh, what are you seeing on the protein side in your neck of the woods? Is what Gus is seeing with UF milk translating all the way over into dried proteins?

Josh White: The most interesting of the product categories right now and the one gaining the most attention is in the whey protein sector. We’re feeling pressure across a lot of the storable dairy products right now, but the one that remains very tight are the WPCs, in particular WPC 80 and whey protein isolate.

The storyline hasn’t changed a whole lot from prior discussions. We went into the year, and there was some trade disruption that masked how tight the market was. We knew a lot of capacity was coming online this year to respond to the demand signals that we’ve been seeing unfold over the last several years.

But where we stand today, in September, with a line sight to the end of the year, is [00:03:00 ] it doesn’t feel like our production out of the U.S. is meeting not only the U.S. demand, but the global demand. This is more of a global situation than just a U.S. situation. The key production regions for the higher whey proteins suitable for sports, nutrition, health, and wellness applications, and others come from Europe and the United States.

And in both markets, prices are very high right now. Whey protein isolate had stabilized as we went into the third quarter, somewhere on either side, at $10 a pound for WPI instant. Today, there’s a lot more discussion anecdotally that we’re seeing prices closer to $10.25 or even $10.50 per pound in certain instances.

Whether it’s the driver or it’s the entire market, that certainly had an effect on WPC 80 prices. WPC 80 is a product that we have seen more production come online. Whereas, with WPI, we’ve seen people really trying to drive yields, trying to [00:04:00 ] just push as much product through their whey protein isolate dryers as they can.

Whereas, WPC 80, again, new production coming online, but that hasn’t gone smoothly in every case. As a result of that, the market is now really responding with prices above $5 a pound. If we go back in history, that’s a demand-killing price. The question is, is that still a demand-killing price?

As the majority of market participants would argue that the per unit value of protein in whey protein products is continuing to appreciate, and the demand we’re seeing is that. The demand is not only strong demand in the sectors we’ve been selling to, but we’re also seeing a lot of inquiries for WPI and WPC 80 going into like consumer packaged good applications and a lot for trials, which suggests to me that people are really looking for new product development in that space to capture some of this demand movement that we’ve seen out there.

And that’s [00:05:00 ] also gonna change a little bit the elasticity of the product. Some of these products that it’s going into, protein is a very important price element, but it’s not as high an inclusion rate as you might see in protein shakes or something along those lines. So, it’s a bit unclear to me how that unfolds.

But right now, we’re staring into a market where the U.S. is driving prices higher. Europe is at a higher price, and the rest of the world is scrambling to catch up and get the protein that they want. What that means and how that drives decision-making for the dairy processor, in particular, the cheese plants, is yet to be seen, but it’s certainly impacting their interest in bringing milk in or making cheese in order to get to this whey protein. And so, I would kind of volley that back to you guys. How important is that from a cheese processor, as we look right now, in September, when milk is seasonally at its lower annual levels, and some of these plants can decide whether or not to remain full.

 How [00:06:00 ] are the cheese plants handling this when they want the whey protein? But cheese feels like it’s a little heavy?

Jacob Menge: Ted, you wanna take that hot potato?

Ted Jacoby III: I look at it this way. When milk is plentiful, like it has been this year, they’ll grab the milk where they can, because worst-case scenario, you can dump the cheese onto the CME if you’re a big cheddar plant. And you can discount it at least to some extent as a mozzarella plant.

I think it’s been harder for the mozzarella guys this year because historically, you’re making low-moisture part-skim mozzarella, you’re spinning off all this cream, you’re getting $3 plus a pound on the cream. That makes it a little bit easier to make sure you still extract the value from the milk when you’re selling off the cream.

But now, the butter price is $1.85, $1.82 after today. And so, it’s a little bit of a different equation. There’s a limit to how much you can discount the mozzarella to make sure it clears. This year, however, I think there’s been an opportunity in that the export market has been strong enough, so they’ve been able to go ahead and move that [00:07:00 ] mozzarella into the export market, so they can keep clearing it and then continue to make money making WPC 80 or WPI. I think the bigger issue may be next year, 12 months from now, because if the cheese price and the butter price stay low, ’cause right now at 3.4% milk production increases and even more on the top of that in terms of components, I think there’s a very real concern that we’re gonna see some really low cheese and butter prices in Q1 and Q2 of next year.

And given how valuable those dairy cows are if they sell them for beef, I think we could see some very high slaughter rates, which will lead to some pretty significant decreases in milk. You may, by this time next year, have some very real competition for milk in certain sectors of the country.

In that environment, what’s a cheese plant gonna do if the cheese market is still relatively weak, but they can