The FAO Dairy Price Index declined by 5.9 points (4.4 percent) in December. Butter prices fell sharply, driven by seasonally higher cream availability in Europe and stock accumulation following strong production earlier in the year. Whole milk powder (WMP) prices also declined, reflecting peak seasonal milk output in Oceania and subdued buying interest from major importing regions. By contrast, skim milk powder (SMP) and cheese prices eased more moderately. SMP prices edged down amid ample export availability and stable market fundamentals, while cheese prices declined overall. Well supplied markets and slower export demand in Europe outweighed firmer cheese prices in New Zealand, where peak milk supplies are mainly absorbed by products with greater processing flexibility, notably butter and milk powders. Despite the recent declines, the FAO Dairy Price Index averaged 146.9 points in 2025, 13.2 percent above the 2024 average, reflecting strong price increases during the first half of the year. The annual rise was driven primarily by cheese, WMP and butter, underpinned by strong global import demand and limited exportable supplies earlier in the year, while SMP prices increased only marginally, reflecting ample availability and comparatively subdued demand growth.