Fluid Milk and Cream - Western U.S. Report 29

California milk production changes are mixed for week 29. Some processors report milk intakes are above expectations for July. Yearover-year milk production is up. Manufacturers in the state report some facilities are running into production issues, which is making spot milk loads more available. In the Central Valley, open processing capacity is tight. 

In Arizona and New Mexico farm level milk output is lighter. Open processing capacity is tighter as some equipment issues are being worked through. 

Week-to-week milk production in the Pacific Northwest varies from steady to lighter. According to the latest milk production report from the National Agricultural Statistics Service, the number of milk cows increased for Oregon and decreased for Washington in May 2026 compared to the same month last year. The report also shows a 7.1 percent milk production increase for Oregon. 

Handlers in the mountain states of Idaho, Utah, and Colorado, report farm level milk output is past peak volumes. Idaho had its hottest weekend of 2026, which processors indicate take a toll on cow comfort, milk output, and milk components. Spot milk loads are tighter. Some manufacturers' production schedules are lighter this week in the mountain states. 

Class demands are steady throughout the region. Cream loads are available. Demand is mixed. Multiples moved higher at the top of both ranges this week. Stakeholders indicate condensed skim milk loads are more available in the West compared to the rest of the country. Demand is stronger, particularly from buyers in the Central and East regions.

Thursday Closing Dairy Market Update - Class III and Class IV Futures Diverge

GENERAL OVERVIEW:

Class III futures showed a solid day with August, September, and October contracts up sharply. Class IV futures moved in the other direction from weakness in spot butter and nonfat dry milk. Cheese prices seem to have found support for the time being.

MILK:

Milk production has slowed due to the hot weather, but lower temperatures are forecast, which should improve cow comfort. Whether milk production will rebound near the levels it had been ahead of the hot weather remains to be seen. The decrease in milk production during this time of year is usual and not a surprise. It does seem to have provided support to cheese prices, which will support higher milk prices. There remains uncertainty over the upside potential of prices. The July Class III contract is mostly priced at $15.73. The current August price is nearly $2.00 higher and hopefully will maintain that level. The July Class IV futures are $18.40, with the August price nearly $1.00 lower. The significant increase in futures today with minimal price movement in spot prices may trigger some profit taking on Friday as traders position ahead of the weekend.

AVERAGE CLASS III PRICES:

3 Month:	$17.11
6 Month:	$17.55
9 Month:	$17.52
12 Month:	$17.52

CHEESE:

Even though milk production has declined, cheese production remains steady. Some plants are making up the decline by purchasing spot milk to supplement lower milk receipts, even though they may need to pay prices above class. Keeping plants running near full capacity maintains efficiency.

BUTTER:

Cream supplies have decreased due to lower butterfat content and increased production of Class II products such as ice cream. Unsalted butter inventories have tightened while salted butter supplies are sufficient. Some plants are scheduling downtime for maintenance as production levels decline.

OUTSIDE MARKETS SUMMARY:

December corn closed down 5.50 cents per bushel at $4.6400, November soybeans closed down 6.75 cents at $11.9500, and December soybean meal closed up $2.40 per ton at $322.40. September Chicago wheat closed down 2.75 cents at $6.7475. August live cattle closed down $3.05 at $227.08. August crude oil is down $0.05 per barrel at $79.55. The Dow Jones Industrial Average is down 106 points at 52,553, with the NASDAQ down 3,867 points at 25,882.

Thursday Midday Dairy Market Summary - Nonfat Dry Milk Moves to a New Low

OUTSIDE MARKETS SUMMARY:

CORN:	7 Lower
SOYBEANS:	7 Lower
SOYBEAN MEAL:	$2.90 Higher
LIVE CATTLE:	$3.22 Lower
DOW JONES:	104 Points Lower
NASDAQ:	302 Points Lower
CRUDE OIL:	$0.62 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 0.50 cent to close at $1.6000 with no loads traded. The barrel cheese price increased 0.25 cent to close at $1.6025 with no loads traded. Prices were moved higher on bids, with only one offer posted for blocks with no interest in lowering the offer to accomplish business. The dry whey price decreased 0.50 cent to close at 69.50 cents with no loads traded. Class III futures were higher before spot trading and maintained the strength after trading concluded. Futures are steady to 58 cents higher, with August showing the greatest strength. The butter price increased 0.25 cent to close at $1.5875 with 16 loads traded. The price initially increased to $1.6000 before selling pressure caused the price to slide back. Grade A nonfat dry milk decreased 2.75 cents to close at $1.4725 with 13 loads traded. The price moved below the previous low of last week to move to the lowest level since February 2nd. Class IV futures are 14-29 cents lower. Butter futures are 1.00 cent lower to 0.82 cent higher. Dry whey futures are 0.35 -- 1.25 cents higher. Cheese futures are steady to 5.10 cents higher. Nonfat dry milk futures are 2.50 cents lower to 0.82 cent higher