Milk Production Increasing at 2% Rate in August
Published: Friday, October 2, 2026
August U.S. milk production remained well above a year ago but the gain slowed. The Agriculture Department's latest data shows output at 19.9 billion pounds, up 1.7% from August 2025, which followed a 1.7% rise in July. The 24 state August total came in at 19.17 billion pounds, up 1.8% from a year ago. The gains will likely be enhanced when adjusted for rising component levels.
July output in the 50 states was revised down 100 million pounds to 20.0 billion, up 1.7% from a year ago, instead of the 2.2% originally announced. The 24 state total was revised down 100 million pounds, to 19.3 billion, up 1.8%, instead of the 2.3% originally reported.
August cow numbers totaled 9.710 million, up 15,000 from the July count, which was revised down 15,000 head, but was up 167,000 or 1.7% from a year ago. The 24 state count, at 9.264 million, was up 15,000 head from July's total which was revised down 18,000, but was up 151,000, or 1.7%, from a year ago.
August milk per cow averaged 2,049 pounds in the 50 States, down 1 pound or .05% from a year ago. The 24 state average, at 2,070 pounds, was up 4 pounds or .2% from 2025. The July average was revised down 7 pounds in the 50 states and 6 pounds lower in the top 24 states.
California produced just under 3.4 billion pounds of milk, down 24 million, or .7%, from a year ago, and was one of seven states showing a decline in output. Cow numbers were up 1,000 head but output per cow was down 15 pounds, as hot weather took a toll there.
Wisconsin produced 2.8 billion pounds of milk, up 43 million, or 1.5%, from a year ago. Cow numbers were up 20,000 head but output per cow was unchanged.
Idaho output hit 1.6 billion pounds, up 26 million, or 1.6%, from a year ago, thanks to 12,000 more cows. Output per cow was unchanged.
Indiana was up 4.8% on 8,000 more cows and a 10- pound gain per cow. Kansas was up 13.9%, on 29,000 more cows and a 10 pound gain per cow.
Michigan put 1.1 billion pounds in the tank, up 28 million or 2.6%
StoneX called the report "bullish" but added; "We have a massive herd today, and while it's not apparent from today's Milk Production report, all metrics to the beef-on-dairy dynamic established in the last five to seven years and venerated over the last couple years is under some duress over the past month. Milk prices are under pressure, specifically Class III, beef prices are weakening and feed prices are firming. The financial models still suggest the producer ought to continue doing what he/she has been doing. Do more of what works, and beef on dairy still works. But financial models sometimes fail."
Speaking of cow numbers, the USDA's latest weekly data showed 50,100 dairy cows sent to slaughter the week ending Sept. 12, down 3,800, or 7.1%, from a year ago. Year to date 1,916,200 cows, have been culled, up 77,200, or 4.2%, from a year ago.
One of the big events in Washington last week was President Trump's address to the United Nations, followed by the arrival of Chinese President Xi Jinping for a three-day visit. Topics of discussion included the ongoing trade spat, AI or Super Intelligence, Iran, rare earth mineral trade, and agricultural purchases, particularly soybeans, which China has not lived up to its previous commitments.
China's latest dairy import data also continued to disappoint and trail year ago levels. August imports were down 14% from August 2025 on a volume basis. HighGround Dairy said this was the smallest import volume for the month of August since 2015, with powder imports the key driver of the decline.
Whey imports totaled 110 million pounds, down 24.3% from a year ago, with volume from the U.S. down 38%, although 2025 imports were very strong, according to HighGround.
StoneX says, "There was some optimism that the hog market was starting to turn around in China, and it probably is in the very early stages, but the market remains oversupplied in the short-term."
"That has pushed piglet prices down again," says StoneX, "and margins for producing piglets tipped negative in early September. That could keep low protein whey imports on the soft side until the margins or expectations improve."
Whole milk powder (WMP) imports fell to 40 million pounds, down 40.7%. HighGround says "While this is the smallest WMP import volume since 2015, the seasonality of the decline is not unusual."
Skim milk powder (SMP) imports totaled 16.8 million pounds, down 22.7%, the lowest in 13 years, according to HGD, which blamed domestic SMP production being up 46% through July.
On a brighter note, China's butter imports hit 20.4 million pounds, up 118.6%, though the gain was partly due to weak imports a year ago, according to HGD. Imports have been more consistent this year and most were from New Zealand.
Cheese imports climbed to 37.9 million pounds, up 28.9% from July, and up 39.4% from a year ago. New Zealand cheese volumes grew 58%, according to HGD, "holding 60% market share, alongside growth from Australia, the UK, and the US, while some European origins slipped."
Cash block Cheddar crept up to $1.3650 per pound last Monday, but it closed the last Friday of September at $1.3075, lowest since Jan. 16, down 4.25 cents on the week, the sixth consecutive week of decline, and 34.75 cents below a year ago. The barrels were unchanged on the week, holding at $1.4525, 17 cents below a year ago. Sales totaled 16 loads of block on the week and no barrel.
Central region milk supplies remain tight, according to Dairy Market News. Contacts cite ongoing distribution challenges influenced by diesel price pressures across much of the U.S. as well as concerns over poor corn silage conditions. Several processing plants in the region were actively seeking milk. Class III prices at mid-week were holding steady at flat class to $2 over. Bulk cheese is described as abundant. Mozzarella sales were reported as strong, though some contacts note scaled back production. International interest is steady.
DMN says demand for cheese manufacturing in the West is strong, predominantly due to high demand for whey and whey derivatives. Cheese manufacturers are receiving contracted milk loads but they are tighter. Facilities report stable schedules, though limited milk availability may make maintaining full production a long-term challenge. Spot loads of cheese remain readily available. No changes were reported in food service or export demand. Retail ads for conventional 6-8 ounce shredded cheese in the West show prices 32 to 35 cents below the national weighted average advertised price of $2.79, with the Southwest averaging $2.47 and the Northwest averaging $2.44. Some contacts report rising freight costs are expected to affect fourth quarter contracts.
Cash butter fell to $1.34 per pound last Tuesday, lowest CME price since Jan. 15, but it closed Friday at $1.40, 3 cents higher on the week, and 32 cents below a year ago. There were 82 trades on the week.
The Central region butter market tone is generally quiet, according to DMN. Cream supplies are steady, with spot loads accessible to regional buyers. Butter manufacturers report active churning, supported by consistent contracted cream. Several contacts note holiday butter discounts may be implemented to facilitate product movement, as current inventories are ample. Some participants reported improved retail sales this week. International demand remains strong, with year-over-year increases in exports. Interest in 82% unsalted butter continues to grow, and contacts emphasize sustained demand for it, according to DMN.
The West is seeing tighter milk supplies but cream remains heavy and readily available. Facilities across the region are well supplied and churns are running at full capacity with no reported outages or unplanned downtime. Inventories are balanced as manufacturers continue moving product to customers. Domestic retail demand is steady to light, though contacts report increasing buyer interest. Food service demand was unchanged week over week but continues to trend soft. Export demand is strong and growing, particularly for unsalted 82% butter. Butter sales are flat and in line with market expectations, says DMN.
Grade A nonfat dry milk continued to skyrocket this week, hitting $2.17 per pound Thursday, highest since May 20. It stayed there Friday, 9 cents higher on the week, and $1.0150 per pound above a year ago, on 18 sales for the week.
Dry whey hit 80.50 cents per pound Thursday, highest CME price since Feb. 23, 2022. It stayed there Friday to close the week 2.50 cents higher, and 15.75 cents above a year ago. There were 2 CME sales on the week.
The Agriculture Department announced the October federal order Class I base milk price at $18.88 per hundredweight, up $1.84 from September, 84 cents above October 2025, and equates to $1.62 per gallon, up from $1.55 a year ago. The 10-month Class I average stands at $18.35, down from $19.24 a year ago, and compares to $20.02 in 2024.
Meanwhile, last Thursday's Class III futures portend a September price at $16.12 per hundredweight; October, $15.30; November, $15.88; December, $16.08; January, $16.40; February, $16.75; and March at $17 per hundredweight.
The International Dairy Foods Assn.) joined U.S. Secretary of Agriculture Brooke Rollins and U.S. Secretary of Health and Human Services Robert F. Kennedy Jr. at USDA headquarters to celebrate what it called "America's ice cream makers' swift action to meet their commitment to eliminate certified artificial colors from ice cream products made with real milk and sold at food retail by the end of 2027."
"The IDFA Ice Cream Commitment is the third in a series of industry-wide, voluntary commitments that bring companies across the U.S. dairy sector together around common, measurable goals to respond to consumers and advance shared health and nutrition priorities," a press release stated. "The effort follows two successful commitments to reduce added sugar and eliminate certified artificial colors in milk, cheese and yogurt served in schools, creating a record of coordinated action across the industry rather than individual company pledges alone," says the IDFA.
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