Benchmark Milk Price Down Compared to 2025
Published: Friday, August 14, 2026
The July federal order Class III benchmark milk price was announced at $15.52 per hundredweight, down 46 cents from June, $1.80 below July 2025, and the lowest Class III since February. The seven-month average stands at $15.85, down from $18.76 a year ago, and compares to $17.33 in 2024. Last Thursday's futures settlements portend an August price at $16.70; September, $17.22; October, $17.52; November, $17.55; and December at $17.58 per hundredweight.
The July Class IV price is $18.34, down $2.62 from June, 55 cents below a year ago, and also the lowest since February. The seven-month Class IV average is $18.66, down from $18.87 a year ago, and compares to $20.33 in 2024.
You'll recall June milk production was up 2.3% from a year ago, leaving plenty to process. Starting with cheese, USDA's latest Dairy Products report shows production hit 1.231 billion pounds, down 4.1% from May, but 1.1% above June 2025. Output for the six month period hit 7.5 billion pounds, up 2.4% from 2025.
Wisconsin produced 307 million pounds of the June total, off .2% from May, but up 4.1% from June 2025. California provided 197.6 million pounds, down 5.3% from May, and 9.1% less than a year ago. Idaho cheese, at 86.1 million, was down 4.4% from May, but 1.4% more than a year ago.
Italian-style cheese totaled 521.6 million pounds, down 6.8% from May, and off .3% from a year ago, putting YTD output at 3.2 billion pounds, up 4.2%. Mozzarella totaled 405.7 million pounds, down 2.4% from a year ago. Year to date, 2.5 billion pounds had been produced, up 2.3% from 2025.
American cheese, at 484.9 million pounds, was down 2.6% from May, but up 1.1% from a year ago. YTD 2.9 billion pounds had been produced, up .2%.
Cheddar output fell to 338.1 million pounds, down 8.3 million, or 2.4%, from May's total which was revised down 4.1 million pounds, but was up 3.2 million, or 1%, from a year ago. YTD Cheddar hit 2 billion pounds, up .3% from a year ago.
Butter production dropped to 208.2 million pounds, down 16.1 million pounds, or 7.2%, from May, but up 16.4 million pounds, or 8.5%, from a year ago. YTD, 1.3 billion pounds had been churned, up 6% from a year ago.
Yogurt production totaled 446.3 million pounds, up 2.2% from a year ago, with YTD output hitting 2.8 billion pounds, up 5.5%. Hard ice cream came in at 68.7 million pounds, up 5.2% from a year ago, with YTD output hitting 381.6 million pounds, up 3.9%.
Dry whey production slipped to 80.9 million pounds, down 1.3 million pounds, or 1.6%, from May, but was up 5.5 million pounds, or 7.3%, from a year ago, due to the higher cheese output. YTD 463.6 million pounds had been produced, up 6.9%. Whey stocks grew to 65 million pounds, up 1.9 million, or 3.1%, from May, and up 7.7 million pounds, or 13.5%, from a year ago.
Nonfat dry milk output fell to 164.9 million pounds, down 8.4 million pounds, or 4.8%, from May, but was up 20.5 million, or 14.2%, from a year ago. YTD output hit 997.6 million pounds, up 8.5%. Stocks slipped to 243.2 million pounds, down 1.8 million, or .8%, from May, and down 900,000 pounds, or .4%, from 2025.
Skim milk powder production dipped to 28.7 million pounds, down 800,000 pounds, or 2.7%, from May, and down 25.2 million, or 46.8%, from a year ago.
U.S. dairy farmers can be mighty grateful for the export market as 547.8 million pounds left our shores in June, though it was down, 4.6%, from the near all-time high in May, according to HighGround Dairy. Exports to China were down 37%.
Cheese exports totaled a record 142.4 million pounds, up 23.9% from June 2025, and up 89.9% year to date. Mexican cheese imports were up 49% in June.
Butter exports, at 19.2 million pounds, were up 35.4%, and up 89.9% year to date. HighGround points out, "Butter exports slipped to their lowest mark since October 2025, but historically speaking, were still quite impressive." Imports dropped from May, but were well above the prior year and moving back toward the big volumes seen in second half 2024.
The overall export decline came from nonfat dry milk (NFDM) and skim milk (SMP), whey protein concentrates, and lactose. NFDM/SMP shipments, at 105.8 million pounds, were down 19.1% and down 3% year to date. These sales would have been booked in March and April, says HGD, when U.S. prices were "wildly out of sync with world prices and global buyers shopped elsewhere."
Dry whey exports totaled 56.5 million pounds, up 47.3% from a year ago, and up 54.1% year to date.
U.S. dairy margins were flat to slightly stronger the last half of July, with mixed trends in both milk prices and feed costs, according to the latest Margin Watch from Chicago-based Commodity and Ingredient Hedging LLC. "Class III milk prices rose initially in late July before selling off at the end of the month, while Class IV milk displayed the opposite trend," the MW stated.
The MW reported June milk production data and warned the milking herd is the largest in 33 years. "Growth in the U.S. dairy herd along with higher component output from the milk being produced has led to strong growth in both cheese and butter production in particular, which is starting to weigh on dairy product prices."
The Margin Watch also stated that June Cold Storage numbers showed that cheese stocks grew 1.1% from May, "A larger seasonal increase than normal and the highest inventory build between the two months since 2015."
Meanwhile, lower corn and soybean prices prompted a slight increase in the June milk-feed ratio, despite a drop in the All-Milk price. The Ag Prices report showed June at 2.23, up from May's 2.21, but down from 2.34 in June 2025.
The All-Milk Price averaged $21.10 per hundredweight, with a 4.23% butterfat test, down 20 cents from May's $21.30 on a 4.31% test. That compares to $21.30 a year ago, which had a 4.19% test.
The national corn price averaged $4.28 per bushel, down 20 cents from May, and 19 cents below June 2025. Soybeans averaged $11.30 per bushel, down 30 cents from May, but 90 cents per bushel above a year ago. Alfalfa hay averaged $198 per ton, up $3 from May, and $21 above a year ago.
The June cull price for beef and dairy combined averaged $175 per hundredweight, up $3 from May, $25 above June 2025, and $103.40 above the 2011 base.
Economist Bill Brooks, of Stoneheart Consulting in Dearborn, Mo., says milk production margins decreased for the first time since January, losing 4 cents per hundredweight, and was above $11 per hundredweight for the third month running at $11.64.
"Income over feed costs in June were above the $8 per hundredweight level needed for steady to higher milk production for the 34th month in a row," he said. "Input prices were mostly lower in June with one of the three input commodities inside of the top 10 for June all-time. Feed costs were the ninth highest ever for the month of June and decreased 16 cents per hundredweight from May."
"Milk income over feed costs for 2026 (using July 31 CME settling futures prices for Class III milk, corn and soybeans plus the Stoneheart forecast for alfalfa hay) are expected to be $11.19 per hundredweight," according to Brooks, a loss of 25 cents per hundredweight versus last month's estimate. Income over feed costs in 2026 would be above the level needed to maintain or grow milk output, down $1.25 per hundredweight from 2025, and 49 cents higher than the 2021-25 average.
Milk income over feed costs for 2027 are expected to be $11.12 per hundredweight, a loss of 7 cents versus 2025, Brooks concludes, and would be above the level needed to maintain or grow milk production, up 41 cents per hundredweight from the 2021-25 average and down 70 cents from the previous month.
Farm real estate value averaged $4,500 per acre for 2026, up $150, or 3.4%, from 2025, according to the USDA's latest Land Values Summary. Cropland value averaged $6,020 per acre, an increase of $190, or 3.3%. Pasture value averaged $2,000 per acre, up $80, or 4.2%, from 2025.
CME Cheddar block cheese fell to $1.52 per pound last Wednesday, lowest since July 8, but closed the first Friday of August at $1.5550, 1.75 cents lower on the week, and 29.50 cents below a year ago. The barrels were unchanged at $1.5475, 25 cents below a year ago. Sales for the week totaled 23 loads of block.
The Daily Dairy Report's Sarina Sharp reported in the July 31 Milk Producers Council newsletter, "Processors were dumping some milk in California, where production has overwhelmed local capacity. Elsewhere there are more than enough cheese vats, butter churns and dryers to absorb summer milk volumes. However, processors are making more dairy products than consumers absorb, putting pressure on prices. American dairy commodities must remain cheap enough to attract international buyers," she warned.
Dairy Market News reported that milk production is still rebounding from the recent heat-wave in the Central region. Spot prices at mid-week ranged $1-under to $5-over class. Interest in barrels is on the rise. Mozzarella continues to be in strong demand ahead of Cheddar but exports were slowing.
Cheese production is steady in the West. Milk production is good, with some contacts reporting availability tightening. The West was experiencing hot, seasonal weather and smoke. Cheese inventory is steady, with output matching demand. Retail and domestic demand remain steady. Strong exports continue.
CME butter fell to $1.4825 per pound last Wednesday, but closed last Friday at $1.5125, a quarter-cent lower on the week, and 84.25 cents below a year ago. There were 94 sales on the week, 79 on Thursday alone.
Cream is readily available in the Central region, says DMN, and churns are maintaining busy schedules.
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