Milk Prices Chill as Temperatures Heat Up for July
Published: Friday, July 10, 2026
A large heat dome covered much of the Midwest and northeast sending temperatures soaring, as the nation prepared to celebrate 250 years on July 4. The temperatures do not bow well for milk output or components.
Milk prices were chilling however, as the Agriculture Department announced the June federal order Class III milk price at $15.98 per hundredweight, down 94 cents from May, and $2.84 below June 2025. It is the lowest Class III price since February and put the six-month average at $15.90, down from $19 a year ago, and compares to $16.92 in 2024.
Last Thursday's Class III futures settlements portended July at $15.55; August, $16.12; September, $16.79; October, $17.23; November, $17.56 and December at $17.53.
The June Class IV price was $20.96, down $1.36 from May, but is $2.66 above a year ago. The six-month average sits at $18.71, down from $18.87 a year ago, and compares to $20.17 in 2024.
You'll recall May milk production was up 2.3% from a year ago. The USDA's latest Dairy Products report shows where it was used. Cheese output hit 1.282 billion pounds, up 1.1% from April, and 2% above May 2025. Output for the five-month period totaled 6.3 billion pounds, up 2.7% from 2025.
Mozzarella production totaled 441.5 million pounds, up 6.2% from a year ago. Year to date, 2.1 billion pounds had been produced, up 3.3% from 2025.
American cheese, at 498.9 million pounds, was up 1.5% from April, but down 2.6% from a year ago. YTD 2.4 billion pounds had been produced, up .1%.
Italian-style cheeses jumped to 559.6 million pounds, up .7% from April, and up 6.5% from a year ago, pushing YTD output to 2.7 billion pounds, up 5.2%.
Cheddar output climbed to 350.5 million pounds, up 20.4 million, or 6.2%, from April, but was down 4.2 million pounds, or 1.2%, from a year ago.
Butter production, at 224.3 million pounds, was down 32,000 pounds from April, but up 7.6 million pounds, or 3.5%, from a year ago. YTD, 1.1 billion pounds had come out of U.S. churns, up 5.6% from a year ago.
Yogurt production totaled 463.8 million pounds, up 5% from a year ago, with YTD output hitting 2.3 billion pounds, up 5.5%. Hard ice cream came in at 69.2 million pounds, up 7.1% from a year ago, with YTD output hit 312.9 million pounds, up 3.6%.
Dry whey production climbed to 82.6 million pounds, up 5.7 million pounds, or 7.4%, from April, and up 9 million, or 12.2%, from a year ago. YTD whey hit 383.1 million pounds, up 6.9%. Stocks jumped to 63 million pounds, up 2.1 million, or 3.5%, from April, and up 6 million pounds, or .9%, from a year ago.
Nonfat dry milk output fell to 173.3 million pounds, down 6.9 million pounds, or 3.8%, from April, but up 16.2 million, or 10.3%, from a year ago. YTD output hit 832.7 million pounds, up 7.4%. Stocks inched up to 246.8 million pounds, up 1.1 million, or .4%, from April, but were down 10 million, or 3.9%, from a year ago.
Skim milk powder production dropped to 29.4 million pounds, down 6.1 million pounds, or 17.4%, from April, and down 19.3 million, or 39.7%, from a year ago. YTD skim milk powder stands at 177.1 million pounds, down 3.5% from 2025.
China Customs Statistic's May data shows dairy imports remain "fragmented," said HighGround Dairy, "With fat outperforming while other key ingredients continue to struggle. New Zealand continues to be the big winner regardless as the country's market share keeps expanding despite any slowdown in imports."
"Domestic milk oversupply is easing after years of capacity reductions, reportedly reducing pressure on local producers. However, domestic production is moving away from whole milk powder and more toward the 'other category' as well as skim milk powder," according to HighGround.
"Consumer caution remains a big concern for dairy imports. China has battled economy-wide deflation since 2023. Although price declines have moderated, consumers and businesses remain highly price-sensitive."
Cheese imports totaled 37.3 million pounds, down 7.8% from May 2025, while up 21.2% year to date. Butter, at 23.2 million pounds, was up 38.3%.
Whole milk powder imports totaled 79.5 million, up 17.5%, while skim milk powder amounted to 40.4 million, down 5.8%. Whey product imports came in at 113.7 million pounds, up .7%, but down 7.5%, YTD.
Back home, planted corn was estimated at 95.3 million acres, down 3% from a year ago, according to USDA's Acreage report issued June 30, and represents the fourth highest in the U.S. since 1944. Acreage was down or unchanged in 40 of the 48 estimating states, according to USDA. June 1 corn stocks hit 5.29 billion bushels, up 14% from June 1, 2025, according to the Grain Stocks report.
Soybean plantings were estimated at 85.4 million acres, up 5%. Acreage is up or unchanged in 23 of the 29 estimating states. Soybean holdings totaled 1.06 billion bushels, up 5% from a year ago.
The latest Crop Progress report showed 9% of the U.S. corn crop was silking, as of the week ending June 28, up 4% from the previous week, 2% ahead of a year ago, and 3% ahead of the five-year average. Sixty-seven percent of the corn was rated good to excellent, down 1% from the previous week, and 6% behind a year ago.
Soybeans were 96% emerged, 3% ahead of a year ago, and 1% ahead of the average. Nineteen percent were blooming, up from 9% the previous week, 3% ahead of a year ago, and 4% ahead of the average. Sixty-five percent were rated good to excellent, down 1% from a week ago, and 1% behind a year ago.
The markets were closed last Friday in honor of the 4th of July. Cash block Cheddar closed last Thursday at $1.4325 per pound, up 1.25 cents on the week, 4.25 cents below where it was on June 1, and 25.25 cents below where it was a year ago. The barrels finished at $1.4750, a half-cent lower, 3.50 cents above their June 1 print, and 24.50 cents below a year ago. Sales totaled 36 loads of block on the week, and 181 for the month of June, up from 133 in May. There were no barrel sales last week and nine for the month of June, up from four in May.
Dairy Market News reports that Central region milk output is steady to lighter, as a few days of high temperatures negatively impacted production. Strong demand from Class II processors was keeping spot availability somewhat limited. Some cheesemakers were purchasing milk from nearby plants with scheduled downtime last week and at below-class prices. Spot prices at mid-week ranged from $3 under to 50 cents over class. Cheesemakers ran busy schedules through last Thursday as some closed last Friday for Independence Day. Domestic cheese demand from retail and food service was lackluster, says DMN, while export interest was unchanged, but down from earlier in the year.
Milk and cream production continue to show seasonal decreases in the West but needs are being met, according to DMN. Demand for spot milk loads from cheese manufacturers was moderate. Cheese production was stable. Domestic cheese demand is steady to lighter. Export demand is steady. Cheese manufacturers in the region report production is pacing well with demand.
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