Tuesday Closing Dairy Market Update - August Milk Production Up 1.7%

GENERAL OVERVIEW:

Class IV futures were higher with double-digit gains in the traded contracts. The strength in nonfat dry milk continues to support the market. The August Milk Production report was bearish, with milk production up 1.7% and cow numbers increasing substantially.

MILK:

The August Milk Production report was released and did not provide a positive outlook for prices. Milk production in the top 24 states was 1.8% higher than August 2025. Production totaled 19.2 billion pounds. Milk output per cow averaged 2,070 pounds, or 4 pounds higher than August 2025. Cow numbers increased by 15,000 head from July and were 151,000 head more than a year ago. U.S. milk production totaled 19.9 billion pounds, up 1.7% from August 2025. Milk output per cow averaged 1 pound below a year ago. Cow numbers reached 9.71 million head, up 167,000 from a year ago and 15,000 more than July. This is a bearish report as cow numbers continue to expand. The hot weather in August impacted milk output per cow, but should rebound in the coming months. Of the top 24 states, seven states showed reduced milk production. Utah was down 3.6%; Arizona was down 3.1%; Idaho was down 0.8%; California was down 0.7%; Vermont was down 0.5%; New Mexico was down 0.4%; and Washington was down 0.2%. Kansas showed the largest increase of 13.9% from a year ago, followed by South Dakota with a gain of 8.4%.

AVERAGE CLASS III PRICES:

3 Month:	$15.95
6 Month:	$16.21
9 Month:	$16.49
12 Month:	$16.71

CHEESE:

The increasing milk supply will keep cheese production strong. Time is running out to see a seasonal increase in prices, as the strong buying activity usually peaks in October. Cheese production is outpacing demand. Buyers see no need to be concerned over supplies and will continue to purchase for later demand and as needed without chasing the market higher.

BUTTER:

The butter price may revisit the low from early January before it finds support. The price at the close of today is just 4 cents above that level. The low butter price has not been enough to stimulate sufficient demand and tighten the supply.

OUTSIDE MARKETS SUMMARY:

December corn closed down 6.25 cents per bushel at $5.3675, November soybeans closed down 2.50 cents at $13.2550, and December soybean meal closed up $2.30 per ton at $370.70. December Chicago wheat closed down 9.50 cents at $7.1725. December live cattle closed down $2.55 at $219.45. November crude oil is down $2.56 per barrel at $89.81. The Dow Jones Industrial Average is down 185 points at 51,864 with the NASDAQ up 122 points at 27,244.

August Milk Production in the United States up 1.7 Percent

August Milk Production up 1.8 Percent        

Milk production in the 24 major States during August totaled 19.2 billion pounds, up 1.8 percent from August 2025. July revised production, at 19.3 billion pounds, was also up 1.8 percent from July 2025. The July revision represented a decrease of 100 million pounds or 0.5 percent from last month's preliminary production estimate.  Production per cow in the 24 major States averaged 2,070 pounds for August, 4 pounds above August 2025.   The number of milk cows on farms in the 24 major States was 9.26 million head, 151,000 head more than August 2025, and 15,000 head more than July 2026.   

August Milk Production in the United States up 1.7 Percent  

Milk production in the United States during August totaled 19.9 billion pounds, up 1.7 percent from August 2025.  Production per cow in the United States averaged 2,049 pounds for August, 1 pound below August 2025.  The number of milk cows on farms in the United States was 9.71 million head, 167,000 head more than August 2025, and 15,000 head more than July 2026. 

Tuesday Midday Dairy Market Summary - Nonfat Dry Milk Continues Higher

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	1 Higher
SOYBEAN MEAL:	$3.80 Higher
LIVE CATTLE:	$2.35 Lower
DOW JONES:	208 Points Lower
NASDAQ:	67 Points Higher
CRUDE OIL:	$1.53 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remain unchanged at $1.3650 and $1.4525, respectively. There were two loads of blocks traded and none of barrels. The dry whey price increased 0.75 cent to close at 78.75 with no loads traded. Class III futures are mixed, from 5 cents lower to 5 cents higher. The butter price decreased 2.00 cents to close at $1.3400 with 14 loads traded. There were six unfilled bids and 18 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk increased 3.25 cents to close at $2.1250 with six loads traded. This is the highest price since June 3 and has nearly regained the entire losses since early May. Class IV futures are 5 to 19 cents higher. Butter futures are 4.05 cents to 2.25 cents higher. Dry whey futures are 0.20 to 0.45 cent higher. Cheese futures are steady to 0.60 cent lower. Nonfat dry milk futures are 0.72 to 1.52 cents higher. The August Milk Production report will be released this afternoon. I estimate milk production to be 1.6% above a year ago and cow numbers down 4,000 head from July.