Benchmark Milk Price Climbs to Four-Month High
Published: Friday, May 8, 2026
The Agriculture Department announced the April federal order Class III milk price last Wednesday at $16.82 per hundredweight, up 66 cents from March but is 66 cents below April 2025. It is the highest Class III price since November 2025. The four-month average stands at $15.63, down from $19.16 a year ago, and compares to $15.77 in 2024.
Last Friday morning's Class III futures portended a May price at $17.10; June, $17.36; July, $18.02; and August, $18.48; with a peak in October at $18.80.
The April Class IV price is $20.22, up $1.28 from March, $2.30 above a year ago, and the highest Class IV price since January 2025. Its four-month average stands at $17.25, down from $19.19 a year ago, and compares to $19.86 in 2024.
U.S. butter stocks shot higher in March as they did in February, but were still well below those a year ago. The Agriculture Department's latest Cold Storage report pegged the March inventory at 288.8 million pounds, up a whopping 32.6 million pounds, or 12.7%, from February, but was still 34.4 million, or 10.6%, below March 2025. February's total was revised up 2.5 million pounds from last month.
American-type cheese stocks grew to 801.6 million pounds, up 10.7 million or 1.4% from the February level, which was revised up 6 million pounds, but they were down 21 million, or 2.5%, from a year ago.
The "other" cheese holdings totaled just under 575 million pounds, up 2.7 million, or .5%, from February but were down 3.4 million pounds, or .6%, below a year ago. The February total was revised down 5.7 million pounds.
The March cheese inventory totaled 1.4 billion pounds, up 13.5 million, or 1%, from February, lowest level for the month since 2020, according to HighGround Dairy, and 23.3 million pounds, or 1.6%, below a year ago.
Checking the rear view mirror, the USDA's 2025 Dairy Products Summary reported cheese production totaled 14.8 billion pounds in 2025, up 4% from 2024. Wisconsin remained the No. 1 producer with 24.6% of the total.
Italian cheese totaled 6.3 billion pounds, up 5.1% from 2024, and accounted for 42.8% of the cheese produced in 2025. Mozzarella accounted for 79.1% of the Italian total, followed by Parmesan with 8.3% and Provolone at 6.2%. Wisconsin, again, was the leading producer of Italian cheese, with a 28.4% share.
American-type cheese totaled 5.8 billion pounds, 4.6% above the 2024 total, and accounted for 39.4% of all cheese produced in 2025. Wisconsin led the nation at 18.2% of the production.
Butter churns produced 2.39 billion pounds, up 6.7% from 2024. California was the No. 1 butter producer with 28.4% of the total.
Nonfat dry milk output amounted to 1.66 billion pounds, up slightly from 2024, and skim milk powder totaled 504 million, down 15.9%. Dry whey output totaled 845 million pounds, down 1% from 2024.
CME block Cheddar closed last Friday, at $1.64 per pound, down a half-cent on the week, a quarter-cent above its April 1 print, and 12 cents below a year ago. The barrels finished at $1.6150, unchanged on the week, 2.25 cents above where they were on April 1, and 14 cents below a year ago.
Sales for the week totaled 11 loads of block and 90 for the month of April, up from 75 in March. There were no sales of barrel on the week and only one for the month of April, down from three in March.
Milk production is steady in the Central region, reports Dairy Market News, and is above a year ago. Spot trades were light this week. Some cheesemakers received fewer offers while others said volumes were available but they were using milk from within their network and not purchasing additional loads. Mid-week spot prices ranged $3-under to flat. Cheesemakers were running busy schedules. Demand for cheese barrels is strong and block demand was steady to stronger. Retail purchasers are steadily securing cheese, but contacts say food service demand is lackluster. Export demand is also strong.
Milk and cream output in the West are accommodating cheesemakers. However, spot milk availability varied throughout the region. Demand from cheesemakers is moderate. Cheese production was steady and continued active seven days a week. Cream cheese production also remains very active. Retail cheese demand is stable. Manufacturers note demand from food producers incorporating cheese as part of their product is a bright spot so far this year. Industry sources describe export demand as strong, according to DMN.
Cash butter fell to $1.5950 per pound last Friday, lowest CME price since Feb. 3, and 11 cents lower on the week, 15.75 cents below its April 1 level, and 73.50 cents below a year ago. Sales totaled 92 loads for the week and 341 in April, down from 377 in March.
Cream output is strong in the Central region, and Class II and Class III processors are buying significant volumes, says DMN, and keeping spot cream volumes balanced to somewhat snug. Spot cream demand is light from butter makers.
Butter makers were running busy schedules. Domestic demand for butter is steady week to week, but some stakeholders report lighter food service demand than expected this time of year. Export butter demand is unchanged, says DMN.
Looking westward, Class II dairy product manufacturing is strong as milk and cream production are providing sufficient volumes for butter makers in the region. Demand for spot loads is moderate from butter makers, with seasonally higher second quarter prices for cream. Butter production varies from steady to strong. Domestic demand is steady. U.S. butter prices continue to be an attraction for international buyers, despite some logistical challenges, according to DMN.
Grade A nonfat dry milk soared to a record high $2.2650 per pound last Tuesday, but saw its first retreat last Wednesday in 16 sessions, inching back .75 cents, and fell to $2.25 last Thursday, but closed last Friday at $2.2625, up a quarter-cent on the week and $1.0675 above a year ago. There were 19 CME sales on the week and 48 for the month of April, down from 147 in March.
Dry whey saw its Friday finish at 69.75 cents per pound, unchanged on the week, a penny higher than April 1, and 17.75 cents above a year ago. There were three sales on the week and 10 for the month, up from seven in March.
An increase in the All Milk Price was tempered by increased feed prices. However, the March feed price ratio moved higher for a second month. The USDA's latest Ag Prices report had March at 2.25, up from 2.17 in February, but compares to 2.45 in March 2025.
The All Milk Price was $19.70 per hundredweight, with a 4.39% butterfat test, up $1.40 from February's $18.30 on a 4.46% test. That compares to $22 per hundredweight a year ago which had a 4.36% test.
The national corn price averaged $4.27 per bushel, up 16 cents from February but was still 30 cents below March 2025. Soybeans averaged $11.10 per bushel, up 50 cents from February, and 90 cents per bushel above a year ago. Alfalfa hay averaged $166 per ton, up $7 from February, but $2 below a year ago.
The March cull price for beef and dairy combined averaged $164 per hundredweight, up $2 from February, $24 above March 2025, and $92.40 above the 2011 base.
Quarterly milk cow replacements averaged $3,130 per head in April, up $150 from January, and $270 above April 2025. Cows averaged $3,000 per head in California, up $200 from January, and $300 above a year ago. Wisconsin's average, at $3,320 per head, was up $150 from January, and $190 above April 2025.
Milk production margins increased for the second straight month by gaining $1.05 per hundredweight and was above $10 per hundredweight for the first time in 2026 at $10.93.
That's according to dairy economist Bill Brooks of Stoneheart Consulting in Dearborn, Mo. "Income over feed costs in March were above the $8 per hundredweight level needed for steady to higher milk production for the 29th month in a row," said Brooks. "Input prices were higher in March with one of the three input commodities inside of the top 10 for March all-time. Feed costs were the sixth highest ever for the month of March and increased 35 cents per hundredweight from February. The March All-Milk price was inside the top 10 for the month, at the seventh highest ever recorded for the month."
Brooks reported, "Dairy producer profitability for 2024, in the form of milk income over feed costs, was $13.40 per hundredweight, according to Brooks. "Profitability was $5.40 above 2023 and $3.74 higher than the 2019-23 average. The 2024 increase in milk income over feed costs was a result of the milk price increasing while feed prices dropped. Income over feed cost was above the level needed to maintain or grow milk production."
"Milk income over feed costs in 2025 were $12.44 per hundredweight," said Brooks. "Income over feed costs would be above the level needed to maintain or grow milk production, and down 96 cents per hundredweight from 2024's level and $2.17 higher than the 2020-24 average."
Milk income over feed costs for 2026 (using April 30 CME settling futures prices for Class III milk, corn and soybeans plus the Stoneheart forecast for alfalfa hay) are expected to be $11.91 per hundredweight, a loss of 53 cents per hundredweight versus 2025. Income over feed costs would be above the level needed to maintain or grow milk production and up 42 cents versus the previous estimate, Brooks concluded.
Culling continues to lead year ago numbers. USDA data shows 48,500 dairy cows sent to slaughter the week ending April 18, up 3,100, or 6.8%, from a year ago. Year to date 886,300 had been culled, up 50,700, or 6.1%, from a year ago.
In politics, the House passed its farm bill, 224 to 200. The National Milk Producers Federation said the bill "supports the farm safety net, preserves existing conservation programs that include opportunities for dairy and livestock producers, and bolsters trade promotion programs."
"The bill also protects common food names, recognizes the important role of dairy in nutrition, and supports animal health programs, all important priorities to dairy farmers and the broader industry," according to NMPF. The federation said it looked forward to the Senate taking up the bill, adding, "At a time where farmers face unprecedented challenges, Congress needs to provide the stability of a five-year, comprehensive farm bill."
Last, but not least, chocolate has reclaimed its place as America's favorite ice cream flavor, according to the International Dairy Foods Assn.'s biannual National Ice Cream & Frozen Novelty Trends Survey. Vanilla took the top spot in 2024, but this year's results show chocolate is back at No. 1, with butter pecan also rising ahead of vanilla among U.S. consumers, says the IDFA.
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