Thursday, July 2, 2026

Thursday Closing Dairy Market Update - American Cheese Production Declined From May 2025

GENERAL OVERVIEW:

It certainly was not an exciting close to the holiday-shortened week. Class IV futures have lost nearly all of their gains of last week, with Class III futures again making new contract lows. The May Dairy Products report showed production gains in butter and cheese except for American cheese.

MILK:

Class III milk futures continue to eliminate the price premium contracts have maintained as traders see little reason to keep prices higher. Subsequent contracts continue to roll down as they move in line with the underlying cash. Even though milk production has passed its peak and has been decreasing, overall output remains higher than a year ago. This keeps sufficient milk available for bottling and processing needs. The summer weather is expected to have an impact on milk production as it usually does, but the impact may not be sufficient to cause any supply shortage. It may reduce the level of spot milk that is available and raise the price of spot milk, but it may not raise the farm milk price.

AVERAGE CLASS III PRICES:

3 Month: $16.16
6 Month: $16.80
9 Month: $16.98
12 Month: $17.07

CHEESE:

For the week, block increased 1.25 cents with 36 loads traded. The weekly average price is $1.4288. Barrels decreased 0.50 cent with no loads traded. The weekly average price is $1.4763. Dry whey remained unchanged with no loads traded. The weekly average price is 68.50 cents. Cheese is having difficulty finding any upward price momentum. Manufacturers continue to move supplies to the market to limit the buildup of inventory. Buyers are not concerned over the supply tightening anytime soon. This keeps them less aggressive in the spot market. The May Dairy Products report showed American cheese production down 2.6 percent from May 2025, totaling 499 million pounds. Italian type cheese production totaled 560 million pounds, up 6.5 percent from the previous year. Total cheese production was 1.28 billion pounds, up 2.0 percent. Dry whey output totaled 82.6 million pounds up 12.2 percent.

BUTTER:

For the week, butter decreased 1.25 cents with 71 loads traded. The weekly average price is $1.6788. Grade A nonfat dry milk decreased 9.25 cents with 73 loads traded. This is the first time that the volume of nonfat dry milk exceeded the volume of butter traded in a single week. The weekly average price is $1.5919. Butter production in May totaled 224 million pounds, up 3.5 percent from May 2025. Nonfat dry milk production totaled 173 million pounds, up 10.2 percent.

OUTSIDE MARKETS SUMMARY:

December corn closed down 0.75 cent per bushel at $4.4150, November soybeans closed down 1.50 cents at $11.4775, and December soybean meal closed down $.30 per ton at $304.40. September Chicago wheat closed down 0.25 cent at $5.9975. August live cattle closed down $2.60 at $239.23. August crude oil is down $0.08 per barrel at $68.50. The Dow Jones Industrial Average is up 595 points at 52,900, with the NASDAQ down 207 points at 25,833.




Fluid Milk and Cream - Western U.S. Report 27

California milk production is lighter. Handlers report June 2026 milk output is down from May 2026 but remained up year-over-year. Spot milk loads are available. Among manufacturers in the state, some scattered downtime is planned during Q3. 

Farm level milk output in Arizona is lighter. Spot load availability is looser as some facility equipment issues are causing unplanned downtime. 

Milk production in New Mexico and the Pacific Northwest is seeing some seasonal decreases, but manufacturers indicate volumes are sufficient for their production needs. 

Handlers in the mountain states report temperatures are rising after a slower than expected pace to seasonal increases, especially with nighttime temperatures. Week-to-week milk production is lighter. Idaho and Utah stakeholders note spot load availability is tighter. 

No changes in Class I, II, III, or IV demands are reported this week. 

Cream loads are available. Demand varies from somewhat lighter to somewhat stronger. Cream multiples are stable. Some stakeholders note condensed skim milk availability is tighter than it was at this time last year. 

Condensed skim milk demand is steady.







Thursday Midday Dairy Market Summary - Butter and Nonfat Dry Milk Show Further Weakness

OUTSIDE MARKETS SUMMARY:

CORN: 5 Higher
SOYBEANS: 6 Higher
SOYBEAN MEAL: $1.10 Higher
LIVE CATTLE: $2.52 Lower
DOW JONES: 189 Points Higher
NASDAQ: 383 Points Lower
CRUDE OIL: $0.14 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 0.25 cent to close at $1.4325 with 5 loads traded. The barrel cheese price remained unchanged at $1.4750 with no loads traded. The dry whey price remained unchanged at 68.50 cents with no loads traded. Class III futures are 7 cents lower to 5 cents higher, with trading confined to the July through November contracts. The butter price declined 4.25 cents to close at $1.6375 with 11 loads traded. There was 1 unfilled bid and 49 uncovered offers remaining at the close, suggesting further weakness next week as sellers continue to move product aggressively. Grade A nonfat dry milk declined 3.00 cents to close at $1.5050 with 16 loads traded. There were 6 unfilled bids and 5 uncovered offers remaining. Class IV futures have only traded in the July and August contracts. Butter futures are steady to 2.67 cents lower. Dry whey futures are 1.75 cents lower to 0.05 cent higher. Nonfat dry milk futures are steady to 0.97 cent higher. Cheese futures are steady to 0.90 cent higher. The May Dairy Products report will be released this afternoon. Production of cheese and butter is expected to be higher than a year ago. There will not be prices released for Dairy Revenue Protection due to the report.




Thursday Closing Dairy Market Update - American Cheese Production Declined From May 2025

GENERAL OVERVIEW: It certainly was not an exciting close to the holiday-shortened week. Class IV futures have lost nearly all of thei...