Milk Production Rises 7% in Indiana, 4% in Michigan
Published: Friday, October 30, 2026
Milk is flowing on US farms as cow numbers and output per cow keep climbing. The Agriculture Department's latest data puts September output at 19.4 billion pounds, up 2.6% from September 2025, which followed a 2.4% rise in August. The 24-state total came in at 18.7 billion pounds, up 2.7% from a year ago.
The report is bearish. StoneX says, "With strong component growth still continuing, component adjusted production was up 3.5% from last year. The Oct. 22 Daily Dairy Report says, "Major investments in processing capacity have given producers the green light to expand in most dairy regions, and recent ups and downs in profit margins have not deterred their appetite for growth."
August output in the 50 states was revised up 139 million pounds to 20 billion, up 2.4% from a year ago, instead of the 1.7% originally announced. The 24-state total was revised up 132 million pounds, to 19.3 billion, up 2.5%, instead of the 1.8% originally reported.
September cow numbers totaled 9.743 million, up a whopping 26,000 from the August count, which was revised up 7,000 head, and was up 169,000, or 1.8%, from a year ago, biggest herd since 1993, according to the Daily Dairy Report. The 24-state count, at 9.304 million, was up 24,000 from the August total which was revised up 16,000 head, and up 162,000, or 1.8%, from a year ago.
September milk per cow averaged 1,996 pounds in the 50 states, up 18 pounds, or .9% from a year ago. The 24 state average, at 2,012 pounds, was up 18 pounds, or .9%, from 2025. The August average was revised up 13 pounds in the 50 states and 10 pounds higher in the top 24.
California output, at 3.3 billion pounds, was virtually unchanged from a year ago. Cow numbers were up 5,000 head but output per cow was down 5 pounds. Wisconsin produced 2.8 billion pounds, up 88 million, or 3.3%, from a year ago. Cow numbers were up 26,000 and output per cow was up 25 pounds. . Indiana was up 7.4% on 11,000 more cows and a 30 pound gain per cow.
Michigan produced 1.1 billion pounds, up 39 million, or 3.7%, from a year ago, thanks to 12,000 more cows and 25 pounds more per cow.
USDA's latest weekly slaughter data showed 52,400 dairy cows sent to slaughter the week ending Oct. 10, up 500, or 1%, from a year ago. Year to date 2,130,800 cows, had been culled, up 80,600 head, or 3.9%, from a year ago.
"Dairy margins improved around $1 per hundredweight in nearby periods with slightly less strength further out on the curve," according to the latest Margin Watch (MW) from Chicago-based Commodity and Ingredient Hedging LLC. "A combination of a sharp rally in Class 3 milk futures along with a sharp decline in the corn market were the contributing factors behind the margin strength over the first half of October," the MW stated. "With strength in the block cheese market boosting milk futures while a bearish October crop report weighed on corn. USDA's latest WASDE report featured a 282-million-bushel increase to corn ending stocks as a 407-million-bushel increase to total supply due to larger stocks reported in the quarterly report at the end of September combined with higher yield and production estimates to deliver a bearish shock to the market."
The November federal order Class I base milk price was announced at $20.27 per hundredweight, up $1.39 from October and $3.52 above a year ago. That put the nine month average at $18.53, down from $19.01 a year ago, and compares to $20.25 in 2024. It equates to $1.74 per gallon, up from $1.44 a year ago.
China's dairy imports continue to tell a story. For example, September whole milk powder (WMP) totaled 58 million pounds up 79.8% from a year ago.
HighGround Dairy reports that imports rose counter-seasonally month-over-month to the highest September volume since 2022. "Domestic milk production has fallen to multi-year lows," says HGD, "and China continues efforts to rebalance its dairy market, tightening local milk availability. Anecdotally, elevated domestic spot milk prices may have made imported WMP a more economical alternative for some buyers. Chinese WMP inventories began declining in June as consumption outpaced limited production, prompting increased purchasing on the Global Dairy Trade platform through August, above 2025 levels."
Skim milk powder imports however, fell to 13.5 million pounds, down 26.9%, and the lowest since October 2010, according to the Daily Dairy Report, and they have fallen for 15 consecutive months.
Whey imports totaled 113.4 million, down 3.4% from a year ago. The US has maintained a 45% market share, says the DDR, but were down 7.1% from 2025.
Butter imports, at 28 million pounds, were up 18%, and also moved counter-seasonally higher from August to September, according to HGD, with increased shipments from New Zealand, France, and Belgium. HighGround says, "Strong Chinese demand for Kiwi milkfat has extended into October, with North Asian buyers, presumably led by China, purchasing a record volume of anhydrous milkfat at the Oct. 20 Global Dairy Trade auction." Interestingly, HighGround says "China's growing appetite for milkfat, supported by demand from the confectionery and bakery sectors, continues to underpin import demand."
Cheese imports hit 40.2 million pounds, up 27.9%, and up 19.2% year to date. The U.S. increased its cheese market share to 5.6%, according to the DDR.
CME block Cheddar climbed to $1.80 per pound last Tuesday, highest since Oct. 30, 2025, but it closed last Friday at $1.7350, 5.25 cents higher on the week after jumping almost 30 cents the previous week, but are still 4.25 cents below a year ago. The barrels shot up to $1.72 last Tuesday, highest since Nov. 3, 2025, and that's where they remained last Friday, 10 cents higher on the week, but a nickel below a year ago. There were 19 loads of block sold on the week and no barrel.
Cooler weather seasonally increases milk output, which remains steady in the Central region, according to Dairy Market News. Southwest contacts report milk supplies are improving somewhat. However, market conditions remain tight. Spot load availability remains limited for Class III producers as Class I and Class IV production increases. Contacts continue to report distribution constraints across the region. Class III spot milk at mid-week ran flat-class to $4-over. Cheese makers continue to report good Mozzarella demand and steady output. Cheddar output slowed due to plant downtime and quality issues. Retail cheese sales remain firm, while food service demand remains below expectations, says DMN.
Milk and cream production is meeting cheese manufacturer needs in the West. Some reported upticks in cost to secure spot milk. Cheese production is steady. Strengthened pricing for whey commodities this year has been a counter to sluggish movements for cheese. While CME prices have strengthened, sellers in the West report no big changes in demand. Retail demand is stable, while food service demand continues to be down. Exports are mostly reported as strong.
Butter fell to $1.33 per pound last Wednesday but closed last Friday at $1.34, down 2.50 cents on the week and 26.25 cents below a year ago. There were 30 sales.
Cream supplies are steady to slightly tighter in the Central region, says DMN. Class II and cream cheese production continues to tighten availability. Reports continue of distribution and freight challenges affecting both milk and cream hauling. A notable volume of cream continues to move to Mexican buyers.
California and Arizona remain the tightest area for spot cream, says DMN, but is available throughout the West. Churns remain busy to cover holiday demand and buyer requests from outside the country. Domestic demand is stronger. Retail interest is picking up and export demand is steady, according to DMN.
Grade A nonfat dry milk reached $2.21 per pound last Tuesday, but fell back last Wednesday and closed last Friday at $2.0950, 6.75 cents lower on the week but still 93.50 cents above a year ago. There were 17 CME sales on the week.
Dry whey dropped 5.25 cents last Wednesday, dipping to 84.25 cents per pound, and that's where it stayed, but is 15.25 cents above a year ago. There was one sale.
The USDA's Livestock, Dairy and Poultry Outlook stated "Restaurant Performance Index published by the National Restaurant Assn., showed restaurant performance improved from May through August compared with the same period in 2025. The U.S. Department of Commerce, Bureau of the Census, says food service sales have grown faster than grocery store sales, which may help explain some of the restaurant expansion. Seasonally adjusted food service sales increased 4.1% from January through August 2026 compared with the same period in 2025, while grocery store sales rose .9%. Year-to-date growth in the production of yogurt, cottage cheese and ice cream also suggests stronger consumer demand for these dairy products," according to the outlook.
There was more good food for thought on dairy products in a recent study. The Oct. 19 Daily Dairy Report stated, "Studies the past decade have shown that consuming full-fat dairy products does not increase one's risk of heart disease or stroke. A new study shows that consuming the natural trans fats found in dairy products also is not associated with an increased risk of heart disease, stroke, cardiovascular death or type 2 diabetes. The findings challenge the assumption that industrial trans-fats and natural trans-fats affect health in the same way," the DDR stated, and was published in Nutrition Research.
In politics, President Trump announced last Monday that the Agriculture Department will make $8 billion available for one-time payments to American farmers this harvest season to "provide relief during temporary market disruptions and increased input costs," according to a USDA press release.
Agriculture Secretary Brooke Rollins said, "More targeted relief is coming to our farmers through the Harvest Fuel Relief program. This $8 billion dollar investment will help bring certainty to our farmers during this harvest so they can continue to feed our nation." Commodity-specific payment rates for Title I commodities will be released in November, says USDA, and payment methodology for other eligible commodities will be announced at a later date. There was nothing specific to dairy mentioned.
Rollins also announced an update to the USDA's Agricultural Marketing Service's Livestock Mandatory Reporting cash cattle reports "to bring greater transparency to cattle market cash reporting," according to a USDA press release. Maintaining reliable and transparent price information is critical to a well-functioning cattle market," Rollins said. "We are making these changes to address those challenges and make the best use possible of the market information that AMS gathers."
The Chicago Mercantile Exchange announced it will launch new European dairy futures and options contracts before the end of 2026, pending regulatory reviews. A CME press release stated that the contracts will be for European skimmed milk powder, European butter, European whey powder and European liquid milk.
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