In California, milk production is strong, with some reporting coops are not able to accept all the milk from handlers. Stakeholders note stronger-than-normal spot milk demand this week. According to the National Agricultural Statistics Service (NASS), in September 2026 milk production in California was stable year over year. Federal milk market order data shows producer butterfat tests increasing, rising from an average of 4.21 percent between September 2024 and September 2025 to an average of 4.25 percent between September 2025 and September 2026.
Farm-level milk output is also stronger in New Mexico and Arizona. Some downtime at a Southwest cheese facility diverted milk to balancing plants this week. In contrast to other regions, September 2026 milk production in Arizona was reported down 4.9 percent year over year, totaling 350 million pounds. Regional contacts report herd sizes are being maintained and expected to remain stable into 2027.
In the Pacific Northwest, milk production is steady. Additional farms in Washington reported positive Highly Pathogenic Avian Influenza (HPAI) tests in dairy cows. Producers are working closely with veterinary experts and regulatory agencies to ensure effective biosecurity measures to limit further transmission. No impact on overall milk output or availability is reported at this time. The Mountain States report balanced farm-level output. According to the latest NASS report, September 2026 milk production in Idaho increased 3.2 percent from September 2025. Idaho stakeholders indicate handlers plan to add cows and expand facilities in 2027.
Holiday production is shifting demand across all classes. Class I eggnog demand is growing. Class II demand is increasing with stronger heavy cream and half-and-half sales. Class III production is moving towards cream cheese and Class IV butter demand is showing an uptick over the past week. Cream availability varies by region. Higher cream demand is reported in Arizona where spot supplies are minimal. Cream availability in California continues to improve week over week and Idaho reports plentiful supplies. Cream multiples moved slightly higher at the top of both regional ranges. Demand for condensed skim milk strengthened this week, highlighting limited availability.
