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.
