Farm milk prices continue to rebound slowly. The May Federal order Class III benchmark was announced by the U.S. Department of Agriculture at $16.92 per hundredweight, up 10 cents from April, but is $1.65 below May 2025. It’s the highest Class III price since November 2025 and put the five-month average at $15.89, down from $19.04 at this time a year ago and compares to $16.33 in 2024.
Late Friday morning on June 5, Class III futures portended a June price at $16.12, July at $16.76, August at $17.22 and September at $17.76 with a peak at $18.45 in November.
The May Class IV price is $22.32, up $2.10 from April, $4.19 above May 2025 and the highest Class IV price since November 2022. Its five-month average stands at $18.26, down from $18.98 a year ago and compares to $19.99 in 2024.
You’ll recall April milk production was up 2.7% from a year ago. The USDA’s Dairy Products report shows where it ended up. Cheese output totaled 1.267 billion pounds, up 0.3% from March and 1.7% above April 2025. Output for the four-month period totaled 4.97 billion pounds, up 2.8% from 2025. March output was revised up 4 million pounds.
Wisconsin produced 305.2 million pounds of the total, down 2.5% from March and 0.1% below April 2025. California produced 202.3 million pounds, up 8.9% from March but 7.7% less than a year ago. Idaho cheese amounted to 91.3 million, up 6.7% from March but 0.1% less than a year ago.
Mozzarella production totaled 434.9 million pounds, up 2.1% from a year ago. Year to date, 1.7 billion pounds had been produced, up 2.6% from 2025.
American cheese, at 490 million pounds, was off 0.4% from the March total which was revised up 3.6 million pounds and was down 1.2% from a year ago. Year to date, 1.9 billion pounds of American had been produced, up 0.8%.
Italian style cheeses totaled 556.3 million pounds, up 2.5% from March and 4.2% above a year ago with year to date hitting 2.2 billion pounds, up 4.9%.
Cheddar output, the cheese traded at the Chicago Mercantile Exchange, dropped to 329.8 million pounds, down 10.4 million or 3.1% from the March level which was revised up 1.6 million pounds but was down 12.1 million pounds or 3.5% from a year ago.
Butter production slipped to 224.4 million pounds, down 4.1 million pounds or 1.8% from March’s level which was revised 3 million pounds lower. Output was up 9.8 million pounds or 4.5% from a year ago. Year to date, 916.1 million pounds had been churned, up 6.1% from a year ago.
Yogurt production totaled 453.8 million pounds, up 0.5% from a year ago, with year-to-date output at 1.8 billion pounds, up 5.1%. Hard ice cream, at 67 million pounds, was up 5.5% from 2025 with year to date output hitting 244.1 million pounds, up 2.8%.
Dry whey output slipped to 76.9 million pounds, down 1.8 million or 2.3% from March but was up 5.6 million pounds or 7.8% from a year ago. Year to date, whey hit 300.5 million pounds, up 5.5%. Whey stocks fell to 61.6 million pounds, down 2.4 million or 3.8% from March but up 2.4 million pounds or 4% from a year ago.
Higher prices drove nonfat dry milk output to 181.4 million pounds, up 5.5 million pounds or 3.1% from March and up 18.6 million or 11.4% from a year ago. Year to date, it hit 660.6 million pounds, up 6.9%. Stocks grew to 253.4 million pounds, up 24.7 million or 10.8% from March but were down 18.7 million or 6.9% from a year ago.
Skim milk powder production totaled 35.5 million pounds, down 1.9 million pounds or 5.1% from March but virtually even with a year ago. Year to date, skim milk powder stands at 147.7 million pounds, up 9.7% from a year ago.
Chicago Mercantile Exchange block cheddar closed the first Friday of June Dairy Month at $1.4725 per pound, down a quarter-cent on the week, sixth consecutive week of decline and 38.5 cents below a year ago. The barrels held all week at $1.44, 42 cents below a year ago. Trading consisted of 39 loads of block on the week and three of barrel.
Milk production is steady in the Central region, according to Dairy Market News, and up year over year. Class III spot trades were lighter last week and prices ranged from under $1 to over $2 Class at midweek. Cheese output was strong and plants were running full schedules though some reported downtime for maintenance. Domestic cheese demand was unchanged. Export demand was strong though lighter than earlier in the year.
Milk production is ticking down from peak spring output in the West, but cheese manufacturers reported more than sufficient volumes. Cheese production and domestic demand was steady. Some sellers indicated that sales have shifted from food service to retail, but domestic demand has not changed overall.
Demand from international buyers is mixed, according to Dairy Market News.
Chicago Mercantile Exchange butter hit $1.71 per pound on June 2, highest since April 21 but closed June 5 at $1.6925, 2.5 cents higher on the week but 86.25 cents below a year ago. There were 72 sales on the week, down from 104 the previous week.
Central region cream production remains strong but strong demand from Class II and Class III processors kept inventories snug. Some butter makers said they were exclusively using cream from within their network, while others in the Southwest purchased cream at favorable multiples from other regions. Butter makers were running full production. Retail sales are strong, while food service demand remains light. Export interest is strong, says Dairy Market News.
Western butter makers reported that milk and cream was meeting needs despite spring peak milk output sliding into the rearview mirror. Butter production was generally stable. Domestic demand was steady. International buying was mixed.
Grade A nonfat dry milk made it to $2.15 per pound on June 2 but closed June 5 at $2.045, 4.5 cents lower on the week but 78.25 cents above a year ago. There were 27 sales on the week.
Dry whey finished at 67 cents per pound on June 5, down 3 cents on the week but 9 cents above a year ago. There were seven Chicago Mercantile Exchange sales on the week.
Another increase in the all-milk price was again tempered by increased feed prices in April, however the month’s feed price ratio inched a little higher for the third consecutive gain. The USDA’s Ag Prices report showed April at $2.26, up from $2.25 in March and compares to $2.28 in April 2025.
The all-milk price was $20.80 per hundredweight with a 4.34% butterfat test, up $1.10 from March’s $19.70 on a 4.39% test and up for the third month in a row, topping $20 for the first time since September 2025. It compares to $21.10 a year ago which had a 4.32% test.
The national corn price averaged $4.31 per bushel, up 4 cents from March, but was still 31 cents below April 2025. Soybeans averaged $11.20 per bushel, up a dime from March and $1 per bushel above a year ago. Alfalfa hay averaged $185 per ton, up $19 from March and $5 above a year ago.
The March cull price for beef and dairy combined averaged $168 per hundredweight, up $4 from March, $26 above April 2025 and $96.40 above the 2011 base.
Feed costs moved to the highest level since May 2025 according to dairy economist Bill Brooks of Stoneheart Consulting in Dearborn, Missouri. Milk production margins increased for the third straight month, gaining 66 cents per hundredweight and was above $11 per hundredweight for the first time in five months at $11.59.
“Income over feed costs in April were above the $8 per [hundredweight] level needed for steady to higher milk production for the 32nd month in a row,” said Brooks. “Input prices were higher with two of the three input commodities inside of the top 10 for April all-time. Feed costs were the 11th highest ever for the month of April and increased 44 cents per [hundredweight] from March. The April all-milk price was inside the top ten for the month, at the fourth highest ever recorded for the month.”
Milk income over feed costs in 2026 (using May 29 Chicago Mercantile Exchange settling futures prices for Class III milk, corn and soybeans plus the Stoneheart forecast for alfalfa hay) are expected to be $11.66 per hundredweight, said Brooks, a loss of 25 cents per hundredweight versus last month’s estimate. “Income over feed costs in 2026 would be above the level needed to maintain or grow milk production, down 78 cents per [hundredweight] from 2025’s level, and 95 cents higher than the 2021-25 average.”
“Milk income over feed costs for 2027 are expected to be $11.73 per [hundredweight], a gain of 7 cents per [hundredweight] versus 2025. Income over feed costs would also be above the level needed to maintain or grow milk production and up $1.02 per [hundredweight] from the 2021-25 average,” Brooks concluded.
“Dairy margins were relatively flat the second half of May as lower milk prices and feed costs were largely offsetting,” reported the latest Margin Watch from Chicago-based Commodity and Ingredient Hedging, LLC.
“Continued growth in both the dairy herd and milk output along with growing stocks of American-style cheese are applying pressure to the market,” warned the Margin Watch. It also detailed the April Milk Production report which I reported here last week.
“Dairy economists expect ongoing expansion in coming months as well,” said the Margin Watch. “Given the extra revenue producers are currently enjoying from the contributions of Class 1 and Class 4 milk as well as record cull cow and crossbred beef calf prices.”
Highlights were given from the April Cold Storage report, which I also detailed last week, and showed total cheese stocks of 1.42 billion pounds at the end of April, up 12.4 million from March with American-style cheeses including cheddar accounting for nearly all the increase.
“While total cheese inventories were down 0.9% from 2025, the large increase in American-style cheese stocks during March and April implies that export demand for American cheddar is weak which over time may bring more deliveries to Chicago and further weaken the [Chicago Mercantile Exchange] spot price,” warned the Margin Watch. The butter build from March to April was smaller than normal and down 8.5% from last year. It was “the lowest April stocks since 2022,” the Margin Watch concluded.
The USDA’s latest Crop Progress report showed that 93% of U.S. corn is now planted as of the week ending May 31, up 1% from a year ago and 1% ahead of the five-year average. 76% had emerged, up from 60% the previous week, dead even with a year ago but 2% ahead of the average. Sixty-seven percent of the corn was rated good to excellent, 2% behind a year ago at this time.
Soybean plantings were 87% complete, up from 79% the previous week, 4% ahead of a year ago and 7% ahead of the five-year average. Sixty-five percent emerged, up from 49% the previous week, 4% ahead of a year ago, and 8% ahead of the average. 66% were rated good to excellent, 1% behind a year ago.
The USDA’s latest weekly slaughter report showed 45,900 dairy cows sent to slaughter the week ending May 23, up 400 or 0.9% from a year ago. Year to date 1,118,500 had been culled, up 54,600 head or 5.1% from a year ago.
New World screwworm (NWS) has entered the U.S. The USDA confirmed detection in a 3-week-old calf in Zavala County, Texas.
“The return of NWS to the US decades after its initial eradication is a disappointing milestone, but it’s also one for which dairy producers have been preparing for more than a year, in collaboration with USDA and across agriculture. It’s important to remember that this development has no effect on food safety, and that measures to combat both the screwworm and its spread are in place and time-tested,” stated the National Milk Producers Federation.
Powder pulled last week’s Global Dairy Trade, Event Number 405, slightly lower. The weighted average slipped 0.6%, following a 0.6% rise on May 19. Volume jumped to 31.7 million pounds, up from 28.6 million on May 19. The average metric ton price was $4,021, down from $4,198 on May 19.
The gains were led by anhydrous milkfat, up 5.3% following a 1.6% drop last time. Butter was up 1.2%, after jumping 2.5% last time. Lactose was up 4.6% following a 0.5% advance and buttermilk powder was up 3%. Cheddar was up 4.6% after dropping 1.3% last time while Global Dairy Trade mozzarella was down 4.6% after climbing 2.9% on May 19. Skim milk powder fell 3% after inching 0.2% higher last time and whole milk powder was down 2.2% following a 1.2% rise last time.
StoneX says the Global Dairy Trade 80% butterfat butter price equates to $2.5375 per pound, up from $2.5109 on May 19 and compares to Chicago Mercantile Exchange butter which closed on June 5 at $1.6925. Cheddar equated to $2.0963, up from $2.0684 last time and compares to Chicago Mercantile Exchange block cheddar at $1.4725 on June 5. Global Dairy Trade skim milk powder averaged $1.5682 per pound, down from $1.6112 while whole milk powder averaged $1.6809, down from $1.7111 while Chicago Mercantile Exchange Grade A nonfat dry milk closed at $2.045 per pound on June 5.
The Global Dairy Trade announced last week that it will establish Singapore as its global headquarters as “part of the next phase of its international development,” according to a Global Dairy Trade press release. “The move reflects [Global Dairy Trade’s] increasingly global role in supporting participants across international dairy markets, with buyers and sellers operating across interconnected global supply chains.”
“The move reflects strong Board and shareholder support for [Global Dairy Trade’s] long-term growth agenda and its continued development as trusted and neutral market infrastructure for the global dairy industry,” said Chief Executive Officer Lloyd Cartwright.
This article originally appeared on Farmers Advance: Feed costs moved to the highest level since May 2025
Reporting by Lee Mielke, Farmers’ Advance / Farmers Advance
USA TODAY Network via Reuters Connect
By Lee Mielke, Farmers' Advance | USA TODAY Network
