Good News: Class III Milk Prices Hit Seven-Month High
Published: Friday, June 12, 2026
Farm milk prices continue to slowly rebound. The May federal order Class III benchmark was announced by the USDA 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.
Last Friday morning, Class III futures portended a June price at $16.12; July, $16.76; August, $17.22; September, $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 .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 .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 .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 .4% from the March total which was revised up 3.6 million pounds, and was down 1.2% from a year ago. YTD 1.9 billion pounds of American had been produced, up .8%.
Italian-style cheeses totaled 556.3 million pounds, up 2.5% from March, and 4.2% above a year ago, with YTD hitting 2.2 billion pounds, up 4.9%.
Cheddar output, the cheese traded at the CME, 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. YTD, 916.1 million pounds had been churned, up 6.1% from a year ago.
Yogurt production totaled 453.8 million pounds, up .5% from a year ago, with YTD output at 1.8 billion pounds, up 5.1%. Hard ice cream, at 67 million pounds, was up 5.5% from 2025, with YTD 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. YTD 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. YTD 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. YTD skim milk powder stands at 147.7 million pounds, up 9.7% from a year ago.
CME 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 38.50 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 $1-under to $2-over class at mid-week. 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 DMN.
CME butter hit $1.71 per pound last Tuesday, highest since April 21, but closed last Friday at $1.6925, 2.50 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 was keeping 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 DMN.
Western butter makers reported that milk and cream were 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 last Tuesday, but closed last Friday at $2.0450, 4.50 cents lower on the week, but 78.25 cents above a year ago. There were 27 sales on the week.
Dry whey saw its Friday finish at 67 cents per pound, down 3 cents on the week but 9 cents above a year ago. There were seven CME 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, however, 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, Mo. 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 10 for the month, at the fourth highest ever recorded for the month."
Milk income over feed costs in 2026 (using May 29 CME 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, says 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.
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