Milk prices are influenced by national and international supply and demand; not only for liquid milk, but for all milk-based products, such as dry milk, butter and cheese, explains DairyReporter.com. The international demand for dairy products has become increasingly important as exports grow, as of 2015.
There are many factors that influence milk prices in the United States, including state and federal programs designed to ensure that milk prices don't fall so low that dairy producers can't cover the cost of production, explains the US Department of Agriculture. Non-governmental organizations, such as dairy cooperatives, also play a role in determining minimum pricing. However, market prices are often already higher than these minimum prices. Fluctuation is then the result of supply and demand, with international demand increasing in influence, states DairyReporter.com.