Thursday Morning Dairy Market Update - Bearish Milk Production Report Should Influence Trade

OPENING CALLS:

Class III Milk Futures:	10 to 15 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Higher
Soybean Futures:	3 to 6 Higher
Soybean Meal Futures:	$0.50 to $3 Higher
Wheat Futures:	1 to 2 Higher

MILK:

Milk futures are expected to be under pressure in response to the negative June Milk Production report. Higher milk production and the substantial increase in cow numbers will influence trade ahead of spot trading. Milk production from June has already been absorbed into the market and we have seen higher cheese prices since then, indicating good demand. However, the report indicates milk supplies will be plentiful for bottling and manufacturing demand. This may reduce any supply concerns buyers may have.

CHEESE:

Cheese prices have been supported as buyers have been aggressive in their purchases, looking ahead to fall demand. Buyers have not been leapfrogging over each other, but have been purchasing steadily. There may be a limit to their aggressiveness as continued strong milk production will keep plants running on full schedules.

BUTTER:

There is no indication of the butter price finding a bottom. It has not been very long since the price was at or below this level. Buyers should turn more aggressive soon as they look ahead to fall demand. Low prices, cure low prices, and the market may be near that level. 

Wednesday Closing Dairy Market Update - June Milk Production Was Up 2.3%

GENERAL OVERVIEW:

Class III futures closed higher while Class IV futures closed lower. Butter and nonfat dry milk are unable to find a bottom. June milk production was 2.3% higher than June 2025. Cow numbers increased 19,000 head from May.

MILK:

The June Milk Production report showed continued strong milk output and higher cow numbers. Milk production in the top 24 states was 2.4% higher than in June 2025, totaling 18.9 billion pounds. May milk production was revised 0.2% lower than the initial report. Milk output per cow averaged 2,051 pounds, up 7 pounds from a year ago. Cow numbers increased by 18,000 head from May, totaling 9.23 million. U.S. milk production was 2.3% above June 2025, reaching 19.7 billion pounds. Milk output per cow was 10 pounds higher, totaling 2,036 pounds. Cow numbers increased by 19,000 head from May. The nation's dairy herd totaled 9.677 million head. This is a bearish report. Second quarter milk production totaled 60.2 billion pounds, up 2.4% from the same period last year. The advanced Class I price for August is $18.76, down $2.57 per cwt from July and down $0.17 from August 2025.

AVERAGE CLASS III PRICES:

3 Month:	$17.10
6 Month:	$17.44
9 Month:	$17.46
12 Month:	$17.48

CHEESE:

The block cheese price has moved to the highest level since October 31, 2025. The continued strength has been welcomed and has pushed the August Class III futures contract nearly $2.00 higher than July. Farmers will breathe a little easier if spot prices can hold. Continued strong milk production will ensure sufficient cheese is available for demand, which may limit upside price potential.

BUTTER:

The weakness of the butter price has been more than anticipated. The price is near the bottom end of the trading range and has eliminated much of what was gained since the low on June 23. Cream supplies to churns are tighter, as more cream is being diverted to higher-value products such as ice cream.

OUTSIDE MARKETS SUMMARY:

December corn closed up 9.50 cents per bushel at $4.8475, November soybeans closed up 16.25 cents at $12.3900, and December soybean meal closed up $5.60 per ton at $332.90. September Chicago wheat closed up 27.75 cents at $7.0575. October live cattle closed down $4.03 at $219.20. September crude oil is up $2.11 per barrel at $86.45. The Dow Jones Industrial Average is down 6 points at 52,219, with the NASDAQ down 146 points at 25,691.

June Milk Production up 2.4 Percent

June Milk Production up 2.4 Percent        

Milk production in the 24 major States during June totaled 18.9 billion pounds, up 2.4 percent from June 2025. May revised production, at 19.7 billion pounds, was up 2.2 percent from May 2025. The May revision represented a decrease of 43 million pounds or 0.2 percent from last month's preliminary production estimate.  Production per cow in the 24 major States averaged 2,051 pounds for June, 7 pounds above June 2025.   The number of milk cows on farms in the 24 major States was 9.23 million head, 185,000 head more than June 2025, and 18,000 head more than May 2026.   

April-June Milk Production up 2.4 Percent  

Milk production in the United States during the April - June quarter totaled 60.2 billion pounds, up 2.4 percent from the April - June quarter last year.  The average number of milk cows in the United States during the quarter was 9.67 million head, 44,000 head more than the January - March quarter, and 192,000 head more than the same period last year.