Butter Stocks Slide in September
Published: Friday, November 6, 2026
U.S. butter stocks fell seasonally in September but remained above those of a year ago. The Agriculture Department's latest Cold Storage report shows the Sept. 30 butter inventory at 295.7 million pounds, down 15.7 million pounds, or 5%, from August, but up 41.8 million, or 16.5%, from September 2025. The August total was revised up 4.3 million pounds.
American-type cheese stocks fell to 792.2 million pounds, down 14.5 million, or 1.8%, from the August level which was revised down 8.8 million pounds, and were down 12.6 million pounds, or 1.6%, from a year ago.
The "other" cheese category saw inventory climb to 613.5 million pounds, up 1.9 million, or .3%, from August's mark which was revised up 7.2 million pounds, and was up 43.8 million pounds, or 7.7%, from a year ago.
Cheese stocks in September totaled 1.428 billion pounds, down 13.6 million, or .9%, from August, but up 32.9 million pounds, or 2.4%, from a year ago.
Analysts viewed the report as neutral to the market. The Oct. 23 Daily Dairy Report stated, "While there's plenty of cheese stashed in cold storage warehouses, much of it is aged. Supplies of 4- to 30-day-old Cheddar suitable for delivery at the CME spot market remain tight, and that has spurred the recent spike in spot cheese values."
Meanwhile, August fluid milk sales mirrored those of a year ago, according to the USDA's latest data. Packaged sales totaled 3.5 billion pounds, unchanged from August 2025, and follows a .2% rise in July.
Conventional product sales hit 3.2 billion pounds, off .1% from a year ago. Organic sales, at 242 million, were up 2.4% from a year ago, and represented a typical 6.9% of total milk sales in the month.
Whole milk sales totaled 1.32 billion pounds, up 4.5% from a year ago, and up 3.6% for the eight-month period. Whole milk represented 37.9% of total sales for the month. Skim milk sales, at 127 million pounds, were down 26.1% from a year ago, and down 15% year to date.
Packaged fluid sales, January to August, totaled just under 28 billion pounds, up .1% from 2025. Conventional product sales totaled 26 billion pounds, up .1% from a year ago. Organic products, at just under 2 billion pounds, were off .3%, and represented 7.1% of total milk sales for the year so far. The figures represent consumption in federal market orders which account for about 92% of total fluid sales in the U.S. About 7.5% of those fluid sales are consumed in schools.
CME block Cheddar hit $1.7450 per pound last Wednesday, highest since Oct. 31, 2025, but it closed the week and the month by plunging to $1.5975, 13.75 cents lower on the week, up 29.50 cents on the month, but 17 cents below a year ago. The barrels reached $1.7250 last Wednesday, highest since Nov. 3, 2025, and finished there last Friday, a half-cent higher on the week, 27.25 cents above their Oct. 1 print, but 8 cents below a year ago. There were 15 sales of block on the week and 103 for the month of October, down from 113 in September. There were no barrel sales on the week or on the month, compared to 11 in September.
Central Region milk supplies are steady to increasing, according to Dairy Market News. Seasonal weather was having a positive impact on cow comfort. Milk components are increasing, providing better milk solids to cheese manufacturers. Spot milk was more available last week, but Class I and IV facilities continue to take large amounts. Spot prices at mid-week were flat-class to $3-over. Cheese manufacturers are operating busy schedules, particularly for barrels and curds. Some contacts expect a potential decrease in production as the holidays approach. Spot load purchases of cheese are strong and contacts anticipate this trend will continue in the coming weeks. Retail demand is firm, while food service demand is steady, according to DMN.
Milk supplies are balanced and cream availability is mixed across the West. Cheese manufacturers report steady demand for Class III milk. A greater share of production is directed toward cream cheese to meet seasonal fall demand. Cheese production remains steady, says DMN, and plants are operating at strong capacity. However, some reported unplanned downtime which temporarily increased milk availability in parts of the region. A health and safety recall was affecting select products from an artisanal cheese manufacturer in the West. Domestic retail demand was stable to slightly improved from the previous week.
Cheese remains the leading dairy feature in grocery store advertising, both nationally and across the West, according to DMN. The 6-8-ounce block category remains the most advertised cheese format, while promotions for 6-8-ounce shredded cheese have increased sharply. Advertisements in the northwest for 6-8-ounce block cheese were more than double those in the Southwest compared to the previous week. Food service demand remains soft, while demand from international buyers is moderate to strong. Spot cheese prices rebounded from recent lows but contacts say the recovery was partly tied to a temporary shortage of exchange-eligible young Cheddar, according to DMN.
Butter dropped to $1.2850 per pound last Wednesday, lowest CME price since Feb. 10, 2021, but it closed last Friday at $1.3575, 1.75 cents higher on the week, 1.75 cents higher on the month, but 25.25 cents below a year ago. Sales totaled 46 loads on the week and 173 for the month, down from 347 in September.
Central region Class II and III production facilities continue to demand larger volumes of cream, says DMN, keeping multiples elevated. Manufacturers indicate production is increasing to meet seasonal demand. Spot sales of butter are steady for both 80% and 82% butterfat butter. Cold storage volumes are slowly decreasing and overall market tone is steady to strong.
Cream demand in the West has increased from Class II users though churn schedules remain full. Cream availability varies across the region, with tighter supplies reported in Arizona and parts of the Southwest, improved availability in California, and more readily available in the Mountain States. Churns are operating at full capacity. Export demand remains strong, though some contacts describe buyers as price sensitive. Domestic butter demand continues to improve, supported by firmer retail and food service sales. Contacts report strong butter movement during the middle of the month, although purchasing sentiment remains cautious. This aligns with the latest Cold Storage report which showed butter inventories declining 9% from the beginning of the month. Loads of 80% butter remain available, according to DMN.
Grade A nonfat dry milk dipped to $2.04 per pound last Wednesday, lowest since Sept. 15, but saw its Friday finish at $2.1125, 1.75 cents higher on the week, down 9.25 cents for the month, yet 98 cents above a year ago. There were seven sales for the week and 78 for all of October, down from 92 in September.
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