Benchmark Milk Price Sees a Welcome Improvement
Published: Friday, April 10, 2026
The March federal order benchmark Class III milk price is $16.16 per hundredweight up $1.22 from February, but $2.46 below March 2025. It is the highest Class III price since November 2025. The three-month average stands at $15.23, down from $19.71 a year ago and compares to $15.86 in 2024. Last Thursday's Class III futures settlements portend an April price at $17.73; May, $18.21; June, $18.65; and July at $19, with a peak at $19.08 in August.
The March Class IV price is $18.94, up $2.65 from February, 73 cents above a year ago, and the highest Class IV price since February 2025. Its three-month average is at $16.26, down from $19.61 a year ago, and $19.78 in 2024.
Dairy margins were flat to slightly firmer over the second half of March as feed costs were steady awaiting the key Prospective Plantings and Grain Stocks reports from USDA at the end of the month while milk prices firmed, according to the latest Margin Watch from Chicago-based Commodity and Ingredient Hedging LLC. "Milk futures are being supported by strong demand, particularly on the export front, which is preventing a build in dairy product stocks despite increased domestic milk production."
The Market Watch detailed the February Milk Production and Cold Storage reports which I have previously reported. It also stated, "Recent strength in the powder market has added $5-$6 per hundredweight in Class IV prices.
You'll recall February milk output was up 2.9% from a year ago. The Dairy Products report details where the milk ended up. Cheese output totaled 1.161 billion pounds, down 9% from January, but up 3.9% from February 2025. Output for the first two months of 2026 totaled 2.4 billion pounds, up 4.2% from 2025.
Wisconsin produced 284.2 million pounds of February's total, down 8.7% from January, but .7% above February 2025. California provided 185.8 million pounds, down 10.3% from January, and 7.4% less than a year ago. Idaho cheese totaled 80.1 million pounds, down 12.3% from January, but 5.4% more than a year ago.
Mozzarella production totaled 394.8 million pounds, up 5.8% from a year ago. Year to date, 825.9 million pounds has been produced, up 5.2% from 2025. American cheese came in at 451 million pounds, down 9.3% from January, but 1.9% more a year ago. YTD 948.2 million had been produced, up 2.6%.
Italian-style cheeses totaled 506.3 million pounds, down 8.8% from January, but up 6.8% from a year ago, with YTD hitting 1.1 billion pounds, up 6.8%.
Cheddar output fell to 314.7 million pounds, down 37.2 million, or 10.6%, from January's level, which was revised down 1.4 million pounds from last month's report, but was up 7 million pounds, or 2.3%, from a year ago. YTD Cheddar hit 666.6 million pounds, up 4.7%.
Butter production fell to 221.2 million pounds, down 19.7 million pounds, or 8.2%, from January's level, which was revised up 9.5 million pounds. Output was up 18.5 million pounds, or 9.1%, from a year ago. YTD, 462.1 million pounds of butter had been produced, up 9.8% from a year ago.
Yogurt production totaled 447 million pounds, up 5.8% from a year ago, with YTD output at 886.3 million pounds, up 5.1%. Hard ice cream, at 57.6 million pounds, was up 3.7% from 2025, with YTD output hitting 114.7 million pounds, off .3%.
Dry whey slipped to 67.3 million pounds, down 10.3 million pounds, or 13.3%, from January, but was up 7.2 million pounds, or 12%, from a year ago. YTD whey hit 144.9 million pounds, up 9.7%. Whey stocks fell to 58.1 million pounds, down 4.5 million, or 7.1%, from January, and down 4.6 million, or 7.3%, from 2025.
Nonfat dry milk output climbed to 159.3 million pounds, up 7.9 million, or 5.2%, from January, and up 12.7 million, or 8.7%, from a year ago. YTD output, at 310.7 million pounds, was up 33.1%. Stocks grew to 220.3 million pounds, up 7.3 million, or 3.4%, from January, but down 30 million, or 12%, from a year ago.
Skim milk powder production dropped to 28.2 million pounds, down 18.9 million pounds, or 40.1%, from January and down 2.6 million, or 8.3%, from a year ago. YTD skim milk powder stands at 75.4 million pounds, up 15.4% from a year ago.
The markets were closed for Good Friday, so cash block Cheddar finished last Thursday at $1.6725 per pound, up 9 cents on the week, highest CME price since Oct. 31, 2025 and 3.25 cents above a year ago. The barrels closed at $1.5925, 2.75 cents higher on the week, but 6.75 cents below a year ago. There were 15 sales of block on the week and no barrel.
Central region milk production is strong, and Midwest contacts told Dairy Market News that output is trending higher. Spot milk was available and cheesemakers were getting additional offers. The increased milk and downtime at some plants caused processors to offer milk below-class prices, and ranged $7-under to $2-under class mid-week. Cheese production was steady to lighter, as some plants had downtime. Domestic cheese demand from retail and food service users was unchanged, according to DMN.
Spring milk production is strong in the West and sufficiently meeting cheese manufacturer needs. Cheese production was steady but was not abundant and spot avails were somewhat dependent on variety. Some manufacturers said inventories were extremely limited and production is anticipated to be focused on contractual commitments through second quarter. Domestic demand is steady. Export demand is steady to strong, says DMN.
CME butter fell to $1.7525 per pound last Wednesday but regained 3.75 cents last Thursday to close at $1.79, down 3.5 cents on the week and 50.5 cents below a year ago. There were 55 sales on the week.
Cream production is strong in the Central region. Some processors planned downtime this weekend and were offering loads on the spot market. However, demand from Class II and III processors kept inventories tight and well balanced. Churning was active. Demand is strong from retailers, while food service demand is steady, but remains somewhat light. Export interest was unchanged.
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