Benchmark up a dime
Farm milk prices continue to rebound, slowly. The May Federal order Class III benchmark price was announced by the USDA at $16.92 per hundredweight (cwt.), up 10 cents from April, $1.65 below May 2025. It is the highest Class III price since Nov. 2025 and put the five month average at $15.89, down from $19.04 at this time a year ago, and compares to $16.33 in 2024.
Late Friday, June 5, morning Class III futures portended a June price at $16.12; July, $16.76; August, $17.22; September, $17.76; with a peak at $18.45 in November.
The May Class IV price is $22.32, up $2.10 from April, $4.19 above May 2025, and the highest Class IV price since Nov. 2022. Its five month average is at $18.26, down from $18.98 a year ago, and compares to $19.99 in 2024.
Another increase in the All Milk Price was again tempered by increased feed prices in April, however the month’s feed price ratio inched a little higher, the third consecutive gain. The USDA’s latest Ag Prices report showed April at 2.26, up from 2.25 in March, and compares to 2.28 in April 2025.
The All Milk Price was $20.80 per cwt., with a 4.34% butterfat test, up $1.10 from March’s $19.70 on a 4.39% test, and up for the third month in a row, topping $20 for the first time since Sept. 2025, but compares to $21.10 a year ago, which had a 4.32% test.
The national corn price averaged $4.31 per bushel, up 4 cents from March but was still 31 cents below April 2025. Soybeans averaged $11.20 per bushel, up a dime from March, and $1 per bushel above a year ago. Alfalfa hay averaged $185 per ton, up $19 from March, and $5 above a year ago.
The March cull price for beef and dairy combined averaged $168 per cwt., up $4 from March, $26 above April 2025, and $96.40 above the 2011 base.
Happy June Dairy Month. Thankfully, it looks like June will remain Dairy Month for a long time to come as a continually growing dairy herd and increasing milk output per cow kept U.S. milk production above a year ago for the 14th consecutive month.
The Agriculture Department’s latest data put April output at 19.960 billion pounds, up 2.7% from April 2025, and followed a 2.7% rise in March. The 24 State total came in at 19.176 billion pounds, up 2.8%.
March output in the 50 States was revised up 71 million pounds to 20.462 billion, up 2.7% from a year ago, instead of the 2.3% originally reported. The 24 State total was revised up 71 million pounds, to 19.662 billion, up 2.8% instead of the 2.4% originally reported.
April cow numbers totaled 9.645 million head, up 10,000 from the March count, which was revised up 14,000 head, and was up 190,000 or 2.0% above a year ago. The 24 State count, at 9.210 million, was up 12,000 from the March total, which was revised up 15,000 head, and was 193,000 or 2.1% above a year ago. The U.S. dairy herd is the largest since Mid-1993, said the Daily Dairy Report.
April milk per cow averaged 2,069 pounds in the 50 States, up 14 pounds or 0.7% from a year ago. The 24 state average, at 2,082 pounds, was up 13 pounds or 0.6% from 2025. The March average was revised up 5 pounds in both.
California milk output was just under 3.6 billion pounds, up a whopping 79 million pounds or 2.3% from a year ago, following a 1.8% gain in March. Cow numbers were up 5,000 head and output per cow was up 40 pounds from a year ago.
Wisconsin produced just under 2.8 billion pounds, also up 79 million, up 2.9% from a year ago, which followed a 3.2% gain in March. Cow numbers were up 31,000 head, with a 10 pound gain per cow.
Idaho was up 45 million pounds or 3.0% on 23,000 more cows. Output per cow was off 5 pounds. Indiana was up 5.6%, thanks to 10,000 more cows, and a 5 pound gain per cow.
Kansas again recorded the biggest percentage gain, up 23.7% from a year ago, on 44,000 more cows and a 20 pound gain per cow. Michigan was up 4.1% on 19,000 more cows. Output per cow was down 5 pounds. Minnesota was up 2.3%, on 10,000 more cows. Output per cow was unchanged.
New Mexico, one of five states showing a decline in milk output, was off 0.4%, due to 2,000 fewer cows milked. Output per cow was up 10 pounds however. New York was up 0.9% on 9,000 more cows, though output per cow was down 10 pounds. Ohio was up 1.9% on 2,000 more cows and 20 pounds more per cow. Oregon was up 7.4% on 8,000 more cows and a 5 pound gain per cow.
Pennsylvania was down 2.0% due to 12,000 fewer cows milked, though output per cow was up 10 pounds. South Dakota was up 6.3%, on 13,000 more cows and a 15 pound gain per cow.
Texas put 1.6 billion pounds in the tank, up 67 million or 4.3% from a year ago, thanks to 29,000 more cows and a 5 pound gain per cow.
Washington State showed the biggest decline again, down 7.0% on 17,000 fewer cows, and a 5 pound drop per cow.
StoneX said there is still available capacity at some of the new plants that have been built in the U.S. and there are likely still new farms or existing farm expansions that will be coming online during 2026 to fill those plants.
“Production per cow is slowing down with seasonal declines in fat and protein content and tougher year-on-year comparisons,” said StoneX. “Producers have been adjusting feed rations for some time now to lower input costs against the weaker milkfat prices. Protein was up 3.4% which is being incentivized by strong whey and nonfat dry milk prices. This put component-adjusted milk production up 3.4%, which helps explain the downtrend in Class III,” according to StoneX.
Meanwhile, we have plenty of dairy in the cooler. U.S. butter stocks jumped in April, as they did in March, but were still well below a year ago, thanks to good domestic demand and strong exports.
The Agriculture Department’s latest Cold Storage report shows April butter stocks at 308.2 million pounds, up 18.3 million pounds or 6.3% from March, but 28.8 million or 8.5% below April 2025. The March total was revised up 1.1 million pounds from last month’s report.
American type cheese stocks grew to 817.6 million pounds, up 12.0 million or 1.5% from the March level, which was revised up 3.9 million pounds. But, they were down 11.9 million pounds or 1.4% from a year ago.
The “other” cheese holdings totaled 575.2 million pounds, up 243,000 pounds or 0.04% from March, but were down 3.4 million or 0.6% from a year ago. The March total was unchanged.
The total cheese inventory hit 1.418 billion pounds, up 12.4 million or 0.9% from March, but still 13.4 million pounds or 0.9% below a year ago. Revisions added 3.9 million pounds to the March total.
StoneX said, “The higher milk production appeared to have helped build inventories.” The May 22 Daily Dairy Report warned “The steep increase in American-style cheese stocks in both March and April suggests that, while exports are helping to clean up supplies of other cheese varieties, international buyers are not interested in U.S. Cheddar. If American-style cheese continues to pile up, some will wind up in Chicago and weigh on the CME spot price.”
CME block Cheddar closed the first Friday of June Dairy Month at $1.4725 per pound, down a quarter-cent on the week, sixth consecutive week of decline, and 38.50 cents below a year ago. The barrels held all week at $1.44, 42 cents below a year ago. Trading consisted of 39 loads of block on the week and three of barrel.
Milk production is steady in the Central region, according to Dairy Market News, and up year over year. Class III spot trades were lighter last week and prices ranged $1-under to $2-over Class at mid-week. Cheese output was strong and plants were running full schedules though some reported downtime for maintenance. Domestic cheese demand was unchanged. Export demand was strong though lighter than earlier in the year.
Milk production is ticking down from peak spring output in the West but cheese manufacturers reported more than sufficient volumes. Cheese production and domestic demand was steady. Some sellers indicated that sales have shifted from food service to retail, but domestic demand has not changed overall. Demand from international buyers is mixed, according to DMN.
CME butter hit $1.71 per pound Tuesday, June 2, highest since April 21, but closed Friday, June 5, at $1.6925, 2.50 cents higher on the week but 86.25 cents below a year ago. There were 72 sales on the week, down from 104 the previous week.
Central region cream production remains strong but strong demand from Class II and Class III processors was keeping inventories snug. Some butter makers said they were exclusively using cream from within their network, while others in the Southwest purchased cream at favorable multiples from other regions. Butter makers were running full production. Retail sales are strong, while food service demand remains light. Export interest is strong, said DMN.
Western butter makers reported that milk and cream was meeting needs despite spring peak milk output sliding into the rearview mirror. Butter production was generally stable. Domestic demand was steady. International buying was mixed.
Grade A nonfat dry milk made it to $2.15 per pound Tuesday, June 2, but closed Friday at $2.0450, 4.50 cents lower on the week, but 78.25 cents above a year ago. There were 27 sales on the week.
Dry whey saw its Friday, June 5, finish at 67 cents per pound, down 3 cents on the week but 9 cents above a year ago. There were seven CME sales on the week.
New World screwworm (NWS) has entered the US. The Agriculture Department confirmed detection in a 3-week-old calf in Zavala County, Texas last week. The National Milk Producers Federation stated “The return of NWS to the U.S. decades after its initial eradication is a disappointing milestone, but it’s also one for which dairy producers have been preparing for more than a year, in collaboration with USDA and across agriculture. It’s important to remember that this development has no effect on food safety, and that measures to combat both the screwworm and its spread are in place and time-tested.”
There was good news for the dairy industry and consumers just in time for June Dairy Month, in a new study from the University of Reading. The study found “Trans-fats found naturally in dairy foods such as milk, butter and cheese do not increase the risk of heart disease or type 2 diabetes,” according to a university press release.
“Researchers analyzed evidence from 22 studies involving thousands of people across Europe, Canada and the United States and found that natural trans-fats behave very differently in the body from the industrial kind.
Unlike industrial trans-fats, which are strongly linked to heart disease, those found in dairy appear to pose no risk,” according to the study.
“The first-of-its-kind research, published in the journal Nutrition Research, will also raise consumer’s awareness of this topic and provide clarity on trans-fat labelling policies which may cause confusion.”
Professor Ian Givens, one of lead authors, and from the University of Reading, said, “People hear the words ‘trans-fats’ and assume the worst, but the trans-fats in your morning milk, yogurt, butter or cheese are not the same as the ones from industrial partially hydrogenated fats. This research should give people reassurance that dairy, eaten as part of a balanced diet, is not something to worry about for your heart,” Given said.
