The Nonfat Short Squeeze

The Nonfat Short Squeeze

From The Milk Check by T.C. Jacoby & Co. - Dairy Traders

February 6, 2026 · 25 min

About this episode

The episode discusses the recent surge in nonfat prices driven by supply chain issues rather than demand.

Nonfat prices have moved sharply higher in recent weeks. But the rally isn’t being driven by a sudden surge in demand. It’s being driven by a breakdown in where milk is actually flowing. In this episode of The Milk Check, Ted Jacoby III and the Jacoby team unpack insights coming out of the IDFA Dairy Forum in Palm Springs and explain why nonfat prices have surged nearly 25 cents in just weeks, even as milk production remains strong. The issue isn’t price resistance. It’s availability. Milk that the market expected to move into dryers is instead being diverted into cheese plants, ultra-filtration, whey proteins and other higher-value protein streams. As a result, powder supply is far tighter than headline production numbers suggest. Layer in heavy short positioning, processing disruptions, and new offtake agreements, and the market begins to resemble a classic short squeeze. In this conversation, the team breaks down what’s actually driving NDFM and why higher prices haven’t unlocked new supply. We cover: How protein economics are pulling milk away from powder Why rising milk production hasn’t translated into greater availability Key…

People in this episode

Host: Ted Jacoby III

Topics covered

  • nonfat prices
  • milk production
  • market dynamics
  • protein economics
  • supply chain
  • short squeeze

Keywords

  • nonfat prices
  • milk production
  • supply chain
  • short squeeze
  • protein economics
  • IDFA
  • dairy market

Mentioned in this episode

Organizations: IDFA

Products: NDFM

Places: Palm Springs, U.S., Europe, New Zealand

More episodes of The Milk Check

Explore listener stats, chart rankings, contacts and more on the The Milk Check podcast page.