Butter prices in the United States have dropped to their lowest level in four years, driven by high milk output and a surplus of cream ahead of the autumn baking season.
Prices fell to $1.62 per pound in late September before recovering slightly to $1.72. Despite the rebound, values remain down 37% compared with the same time last year and 33% lower than at the start of 2025. The last time butter traded below $2 was in November 2021.
The decline follows two years of record highs, when prices exceeded $3.50 per pound in 2023. Increased milk production and higher butterfat content have expanded cream availability, reducing pressure on supply. The US Department of Agriculture reported that milk output in the top-producing states was up 1.8% in the first eight months of 2025, supported by a 1.9% increase in dairy herds and improved yields per cow.
Lower feed costs have encouraged herd expansion, and forecasts suggest continued growth through 2026. As a result, the USDA has cut its price projections for butter, cheese, and other dairy products.
Cheaper US butter and cheese have boosted exports, which reached record levels in July, but domestic use of dairy products fell slightly over the same period. With production expected to rise again in early 2026, analysts anticipate continued price pressure through next year.