You’ll recall that March milk production was up 2.3% from a year ago. That kept U.S. churns, vats and dryers busy, according to the U.S. Department of Agriculture’s latest Dairy Products report. Cheese output totaled 1.259 billion pounds, up 8.1% from February, and 1.2% above March 2025. Output for the three-month period hit 3.7 billion pounds, up 3.1% from 2025.
Wisconsin produced 311.9 million pounds of the March total, up 9.9% from February, and 1.2% above a year ago. California produced 185.5 million pounds, down 0.2% from February, and down 15.2% from a year ago. Idaho produced 86.2 million, up 8.4% from February, and 1.4% more than a year ago.
Mozzarella production totaled 421.6 million pounds, up 0.5% from a year ago. Year to date, 1.2 billion pounds had been produced, up 2.8% from 2025. American cheese came in at 488.3 million pounds, up 7.4% from February, but 2.3% below a year ago. Year to date, 1.4 billion pounds have been produced, up 1.2%.
Italian style cheeses totaled 542.3 million pounds, up 6.6% from February, and 2.3% above a year ago, with year to date hitting 1.6 billion pounds, up 5.1%.
Cheddar output jumped to 341.8 million pounds, up 25.2 million or 8% from February’s level, which was revised 1.9 million pounds higher from last month’s report. But output was down 7.1 million pounds or 2% from a year ago.
Butter production climbed to 231.5 million pounds, up 9.1 million pounds or 4.1% from February’s level, which was revised 1.2 million pounds higher. Output was up 2.7 million pounds or 1.2% from a year ago. Year to date, 694.8 million pounds had been produced, up 7.1% from a year ago.
Yogurt production totaled 490.3 million pounds, up 6.5% from a year ago, with year to date output at 1.4 billion pounds, up 6.5%. Hard ice cream climbed 62.8 million pounds, was up 5.1% from 2025, with year to date output hitting 176.7 million pounds, up 1.6%.
The additional cheese production resulted in plenty of whey. Dry whey output hit 78.7 million pounds, up 11.4 million pounds or 16.8% from February, and up 2.7 million pounds or 3.6% from a year ago. Year to date whey hit 223.6 million pounds, up 4.7%. Whey stocks also grew, hitting 64 million pounds, up 3.9 million or 6.3% from February, but were down 200,000 pounds, or 0.5% from 2025.
Nonfat dry milk output shot up to 175.3 million pounds, up 23.4 million or 15.4% from February, and up 15.8 million or 9.9% from a year ago.
Year to date output, at 478.6 million pounds, was up 5.1%. Stocks grew to 235.7 million pounds, up 15.3 million or 6.9% from February, but down 27.1 million or 10.3% from a year ago.
Skim milk powder production climbed to 37.4 million pounds, up 9.7 million pounds or 35.2% from February, and up 3.4 million or 10.1% from a year ago. Year to date skim milk powder stood at 112.2 million pounds, up 13% from a year ago.
Thankfully, U.S. exports are strong and soared to a record 568.3 million pounds in March, according to the USDA’s latest data. HighGround Dairy credited especially strong shipments to Mexico, South Korea and New Zealand.
Cheese sailings totaled 139.9 million pounds, up 28.7% from March 2025, and were a major part of the uptick in exports to Mexico, says HighGround Dairy, adding that the increase was not a surprise considering U.S. prices compared to other global exporters.
Butter exports hit 25 million pounds, up 85.5% from a year ago, with year-to-date shipments up 109.9%. Again, the price was right.
Whey shipments totaled 54 million, up 37.1%, and up 35.6% year to date.
Nonfat-skim milk powder totaled 131.2 million pounds, down 7.8%, from a year ago, first year over year decline since September 2025, according to HighGround Dairy, but year to date exports were up 5%. Demand from Mexico softened in March, along with Southeast Asia and South America, but powder remains tight here at home, evidenced by the record prices, which will surely curve exports.
Speaking of exports, the National Milk Producers Federation reports that NEXT member cooperatives secured 58 contracts in April, adding 16 million pounds of product in NEXT-assisted sales in 2026. These products will go to customers in Asia, North America, Oceania, Middle East-North Africa, South America, Central America and the Caribbean from April through November, says the National Milk Producers Federation.
Powder reversed the Global Dairy Trade’s direction last week. The weighted average rose 1.5%, following a 2.7% decline on April 21 and a 3.4% drop on April 7. Volume fell to 30.3 million pounds, down from 33.1 million on April 21. The average metric ton price was $4,127, down from $4,143 on April 7.
The gains were led by buttermilk powder, up 9%. Skim milk powder was up 3%, following a 3.2% rise on April 21. Whole milk powder was up 2.2% after slipping 0.6%. Anhydrous milkfat advanced 1.1% after plunging 9.6% last time.
Butter was down 2.6% after leading the declines the past two events, dropping 7.9% Tuesday, May 5. Cheddar was down 3.6%, following a 1.1% gain last time, while Global Dairy Trade’s mozzarella was up 4.7%, following a 3.1% decline.
StoneX says the Global Dairy Trade’s 80% butterfat butter price equates to $2.4451 per pound, down from $2.5233 on April 21, and compares to Chicago Mercantile Exchange butter which closed Friday, May 1, at $1.665. Cheddar equated to $2.0916, down from $2.1765 last time, and compares to Chicago Mercantile Exchange block cheddar on Friday, May 1, at $1.6225. The Global Dairy Trade’s skim milk powder averaged $1.6091 per pound, up from $1.5641, while whole milk powder averaged $1.6968, up from $1.6629, while Chicago Mercantile Exchange Grade A nonfat dry milk closed Friday, May 1, at a mind boggling $2.29 per pound.
“North Asia purchases decreased significantly from the last event and has remained well-below average for months now,” StoneX concludes. “SE Asia and Oceania purchases increased from the last event but it is also below average purchasing volumes. The Middle East also dropped off purchases, leaving only Central America and Europe at purchase volumes near historical average.”
The USDA’s latest Crop Progress report showed 38% of U.S. corn was in the ground, as of the week ending May 3, up from 25% the previous week, equaling that of a year ago and 4% ahead of the five-year average. Thirteen percent had emerged, 3% ahead of a year ago and 4% ahead of the average. Soybean plantings were at 33%, up from 23% the previous week, 5% ahead of a year ago, and 10% ahead of the five-year average. Thirteen percent had emerged, 7% ahead of a year ago.
Dairy culling remains above year ago numbers. USDA says 48,000 dairy cows were sent to slaughter the week ending April 25, up 900 or 1.9% from a year ago. Year to date 934,300 had been culled, up 51,600 or 5.8% from a year ago.
There is good reason culling is running so strong. The Daily Dairy Report’s Sarina Sharp wrote in the May 1 Milk Producer Council newsletter, “Live cattle futures set fresh all-time highs [last] week, easily besting the once unthinkable prices logged in October. Dairy producers are cashing substantially higher cull cow and beef calf checks than they did a year ago, when beef-related revenues were already astoundingly high. Newborn crossbred calves are selling for $700 or $800 more than they did at this time last year, while cull cows are $200 to $300 higher than they were in late-April 2025.”
“It all adds up to a lot of non-milk revenue,” says Sharp. “When lower milk prices arrive, dairy producers will be somewhat shielded from the market signal to produce more milk. For now, they’re poised to enjoy record-shattering beef incomes and decent milk revenues to boot. They’ll likely continue to add cows.”
Meanwhile, the latest Margin Watch from Chicago-based Commodity and Ingredient Hedging, LLC. says “Dairy margins were weaker in nearby periods as milk prices declined over the second half of April while feed costs were mixed, with corn prices sharply higher and meal lower.”
The Margin Watch added “Milk futures continue to diverge between classes as strength in the [nonfat dry milk] market has lifted Class 4 Milk to a historic high relative to Class 3 Milk. The current differential in May futures between Class 4 and Class 3 Milk represents an all-time high for any contract month in history and has helped producers as the Class 1 price has now reverted to the ‘higher of’ between the two classes after that pricing formula returned to the old method last summer.”
The Margin Watch also detailed the March Milk Production report, stating the increase came on an increasing dairy herd, highest since the 1990s, plus increased milk per cow. It warned however, “Higher milk production is taxing capacity and has led to Class 3 Milk prices trading anywhere from $2 to $8 below class for spot loads.” The Margin Watch concluded with USDA’s monthly Cold Storage report which revealed building dairy product inventories resulting from heavier milk production.
Cash block cheddar saw some ups and downs but closed Friday, May 1, at $1.6225 per pound, 1.75 cents lower on the week, and 19.5 cents below a year ago. The barrels finished at $1.60 after holding at $1.615 since April 23, 1.5 cents lower on the week and 17 cents below a year ago. There were 36 sales of block.
Dairy Market News reports that Central region milk output is strong and Class III prices at midweek ranged $7 under to flat Class, though most contacts said offers were closer to the top of the range. Spot availability for Class III milk varied, as some were unable to find it even when offering above Class prices. Cheesemakers continue to run busy schedules. Retail and food service demand was unchanged, but some noted an uptick in interest from international buyers.
Spring milk production peaks in the West are more sustained this year, says Dairy Market News, which is providing plenty for cheese manufacturers. Spot load demand was moderate to stronger from cheesemakers. Production is generally busy seven days a week. Spot loads are available, but some manufacturers anticipate tight inventories for at least some varieties throughout the second quarter. Demand from international buyers is somewhat strong, which is helping to keep inventories on par with production. Domestic demand is steady. Retail/food manufacturer sales are more active than food service/restaurant sales, according to Dairy Market News.
After dropping 11 cents the previous week to $1.595 per pound, Chicago Mercantile Exchange butter closed the following Friday at $1.665, 7 cents higher in the week, but 66.5 cents below a year ago. There were 38 sales in the week.
Central region contacts report milk components are decreasing week to week but remain above a year ago. Cream production is strong and Class II and Class III processors continue to pull heavy volumes, keeping inventories snug. Demand for cream is light from butter makers, as they are using available volumes from within their network. Domestic butter demand was unchanged from two weeks ago. Export interest is picking up.
Spring milk and cream production is keeping plenty of loads headed to butter manufacturers in the West.
Spot cream demand was moderate from butter manufacturers as contractual loads are generally sufficient and cream prices are not often enticing. Churns remain busy seven days a week. Inventories vary from stable to increasing. Eighty percent and 82% butterfat butter is available. Domestic demand is steady. International demand varies from somewhat lighter to strong. Sellers indicate global disruptions are giving them logistics challenges and in turn decreasing demand from buyers in some cases, according to Dairy Market News.
Grade A nonfat dry milk set another record high last week, reaching $2.295 per pound Thursday. It closed Friday at $2.29, up 2.75 cents on the week, and $1.0825 above a year ago. There were 13 Chicago Mercantile Exchange sales in the week.
Dry whey closed Friday, May 1, at 70 cents per pound, up a quarter-cent for the week, and 15.75 cents above a year ago, with three sales for the week.
As I reported two weeks ago, the House passed its version of the farm bill so eyes now switch to the Senate. Anja Raudabaugh, CEO of Western United Dairies, wrote in her member newsletter last week, “The Senate will develop its own Farm Bill language, which the Senate Ag Committee has not formally begun yet.”
“Senate Agriculture Committee Chairman John Boozman (R-AR) has publicly stated that the Senate is preparing its own version and expects to release legislative text in the coming weeks. He has indicated a preference for a bipartisan ‘skinny’ or streamlined approach to increase the chances of passing the 60-vote threshold needed in the Senate. Timing remains fluid, but Senate leadership is under pressure to act following the House passage.”
The USDA issued an interim final rule Thursday, May 7, implementing the Whole Milk for Healthy Kids Act. Michael Dykes, president and CEO of the International Dairy Foods Association, called it “a major victory for children’s nutrition and for common-sense school meal policy.”
An International Dairy Foods Association press release stated that it “applauds USDA for moving quickly to put the law into effect and provide school nutrition directors and school milk processors the certainty they need to offer students the nutritious milk options that best meet their nutrition needs. For too long, federal regulations limited schools’ ability to offer the milk options students prefer and are more likely to drink. This rule restores flexibility for schools while aligning federal nutrition policy with the Dietary Guidelines for Americans, which recognize dairy foods across all fat levels as part of healthy dietary patterns.”
The National Milk Producers Federation also gave the rule a thumbs up stating, “As the rule was developed, NMPF requested clarification from USDA that schools would have the option to provide whole and 2% milk for school breakfasts as well as school lunches; today’s rule meets that need and benefits schoolchildren by ensuring a full range of milk options at every school meal.”
This article originally appeared on Farmers Advance: Producers ‘enjoy record-shattering beef incomes and decent milk revenues’
Reporting by Lee Mielke, Farmers’ Advance / Farmers Advance
USA TODAY Network via Reuters Connect
