US farmers get over 50% of butter’s retail price - USDA
Ice cream farmers receive under 20%, USDA finds
27 June 2025
1 minute read
By: According to a USDA Economic Research Service (ERS) chart of note, dairy farmers in the US received just over half of consumers’ retail spending on butter in 2024, but considerably less when it comes to ice cream.
While butter was estimated to be 80.3% milk fat, offering a substantial return to dairy producers, farmers still captured only 57 % of the final retail price after processing and marketing costs. In contrast, ice cream—which blends milk, cream, sugar, egg yolks, and often additional flavourings like fruit or chocolate—yielded just 19 % of its retail price back to the farm level.
The ERS emphasizes that the farm share reflects the portion of consumer spending that goes directly to farmers for the milk used in a product. Remaining costs stem from processing, packaging, distribution, and retail overhead.
These figures are drawn from the USDA’s “Price Spreads from Farm to Consumer” data, which was last updated in May 2025. The data highlights how additional ingredients and processing-intensive dairy products can significantly reduce the farm share of the retail price—even when they originate from the same underlying commodity.
Implications for the dairy sector
- Butter: High-fat content keeps farmers’ share above 50%.
- Ice cream: Complex processing and extra ingredients weigh down the farm share.
- Market insight: Price spread data underscores how downstream processing impacts farmer returns.
