Dairy Industry News Roundup: Week of August 15 - 21, 2026

# Dairy Industry News Roundup: Week of August 15 - 21, 2026 U.S. dairy markets entered the week of August 15-21, 2026 with notable momentum: the USDA's August WASDE, released August 12, lifted the 2026 milk production forecast to 238.1 billion pounds (up 6.4 billion from 2025's record), while the CME spot NDM market pushed to $1.7450/lb on August 14, the highest weekly close in more than two months. Simultaneously, GDT Event 410 on August 18 posted a 2.3% gain in the overall price index to an average winning price of $3,873/MT, the strongest result since spring. Class III futures held near $16.25/cwt on the back of WASDE revisions, while butter drifted lower on ample domestic cold storage cover. The H5N1/HPAI situation remained a chronic but manageable backdrop, with NMTS surveillance data continuing to define affected versus unaffected state classifications across the country. --- ## 1. This Week From Therio The team is heads-down building this week. If you missed our recent long-form pieces from co-founder Greg Cochara, both are worth catching up on: - [Herdscripting 101: The Hidden Infrastructure Behind Every Dairy Treatment](/news/herdscripting-101) - [Interstate Movement of Dairy Cattle: The Compliance Maze Nobody Talks About](/news/interstate-movement-101) --- ## Industry News ## 2. August WASDE: USDA Bumps 2026 Milk Output to 238.1 Billion Pounds, Price Forecasts Split USDA's August WASDE raised the 2026 milk production forecast slightly to 238.1 billion pounds on expectations of a larger cow herd, partially offset by a decrease in milk output per cow. The revision, released August 12, represents the most aggressive upward move in the 2026 production estimate since spring. At 238.1 billion pounds, the 2026 milk production estimate was raised from last month's report and would be up 6.4 billion from 2025's total of 231.7 billion pounds. Based on the latest Milk Production report, cow inventories are raised for 2026 and unchanged for 2027, while milk output per cow is reduced slightly for both 2026 and 2027. For 2026, the price forecasts are decreased for butter and nonfat dry milk but increased for cheese and whey to reflect recent prices. As a result, the Class III price forecast is raised to $16.25 per hundredweight (cwt), and the Class IV price is lowered to $18.15/cwt. On the feed side, the WASDE's 2026-27 U.S. corn outlook showed lower supplies, unchanged domestic use, larger exports, and smaller ending stocks. Corn production is forecast at 16 billion bushels, up just 13 million from last month, with a 1.2 million-acre increase in harvested area largely offset by a reduced yield forecast. | USDA August 2026 WASDE Dairy Price Forecasts | 2026 Forecast | Change vs. July WASDE | |---|---|---| | All-Milk Price ($/cwt) | $20.35 (est.) | Unchanged | | Class III Price ($/cwt) | $16.25 | Higher | | Class IV Price ($/cwt) | $18.15 | Lower | | 2026 Milk Production (bil. lbs.) | 238.1 | Higher | | 2027 Milk Production (bil. lbs.) | 238.0 | Lower | ## 3. CME Spot Dairy Markets: NDM Surges While Butter Retreats Toward $1.46 The CME spot dairy complex during the week of August 15-21 was defined by a clear divergence between dairy proteins and dairy fats. Nonfat dry milk continued to climb, while butter came under renewed selling pressure. Cheese barrels closed the prior week at $1.5625 and 40-lb blocks at $1.6000, with the weekly average for barrels at $1.5535 (up 0.60 cents) and blocks at $1.6050. Grade A NDM closed at $1.7450. Butter Grade AA closed at $1.4600, with the weekly average for Grade AA at $1.4755, down 2.75 cents. Cash dairy commodity prices settled mostly lower during midweek trading sessions, with butter, dry whey, and block cheese yielding ground. Bucking the broader market softness, NDM posted solid gains, extending its recent upward trajectory. NDM advanced to close at $1.8100 per pound, supported by active market turnover, with six spot sales transacted within a price band of $1.7900 to $1.8100 per pound. While easing butter prices reflect ample inventory cover and seasonal processing throughput, the resilience in NDM underscores tight balance sheets for exportable solids-not-fat. | CME Spot Dairy: Week of August 15-21, 2026 | Close ($/lb) | Weekly Direction | |---|---|---| | Cheddar Blocks (40 lb) | $1.60+ | Mixed/Firm | | Cheddar Barrels | $1.5625 | Slightly Higher | | Butter Grade AA | $1.4600 | Lower | | NDM Grade A | $1.8100 | Strongly Higher | | Dry Whey Extra Grade | $0.6900 | Steady/Slightly Softer | ## 4. GDT Event 410: Price Index Jumps 2.3%, Signaling Renewed Global Confidence The week's most bullish global signal came from the New Zealand auction platform on Tuesday, August 18. At its 410th event, held on August 18, 2026, Global Dairy Trade (GDT) recorded a 2.3% increase in its price index compared to the previous auction, with an average winning price of USD 3,873 per metric ton. The New Zealand platform confirmed an upward trend that is reigniting expectations in the international dairy sector heading into the second half of the year. The GDT Event 410 result builds on the positive momentum observed in the August 4 Event 409, which itself was notable. The GDT Index recorded its second consecutive increase at the August 4 auction, rising 0.7%, with a total of 40,504 metric tonnes of dairy products traded. The auction marked the second straight increase after three consecutive declines, suggesting renewed stability in global dairy commodity markets. Recent GDT events show modest overall gains but stronger WMP and SMP prices. Rising New Zealand exports and recovering Chinese imports signal firmer demand, with buyers concentrating on October and November coverage. The market appears more balanced, with demand improving while future supply uncertainty supports prices. October and November accounted for 82 percent of total GDT sales. Butter volume sold increased compared to Event 408 but was lower than a year ago. North Asia led purchasing at 56 percent, followed by Europe. | GDT Event 410 (August 18, 2026) | Result | vs. Event 409 | |---|---|---| | Overall Price Index | +2.3% | Higher | | Average Winning Price (USD/MT) | $3,873 | Higher | | Leading Buyer Region | North Asia (56%) | Consistent | | Forward Demand Focus | Oct/Nov contracts | Concentrated | | New Zealand SMP Volumes | Seasonally increasing | Trend higher | ## 5. FMMO Class I Base Price: August at $18.76/cwt, Class I Average Reaches $22.88 Federal Milk Marketing Order pricing dynamics from the August announcement continued to shape producer revenue expectations heading through the second half of summer. The August Class I base price dropped more than $2 per hundredweight after July's price indicated imminent downward pressure as a result of ample milk production but weaker markets for dairy categories like cheese. Announced July 22, the FMMO advanced Class I base price fell $2.57/cwt from the month prior to $18.76/cwt in August. This price marks the first time in 2026 that the Class I base price fell more than $2/cwt from the month prior. At $18.76/cwt, that is 17 cents below the Class I base price in August 2025. With zone differentials added, August's Class I price should average $22.88/cwt across all orders. The highest price should be reported in the Florida FMMO at $25.56/cwt, while the lowest should be in the Arizona FMMO at $21.36/cwt. The August Class I base price dropped after July's price indicated imminent downward pressure as a result of ample milk production but weaker cheese markets. For the sixth consecutive month, the average FMMO uniform milk price climbed from the month prior. | FMMO Class I Base: August 2026 | Value | |---|---| | Class I Base Price ($/cwt) | $18.76 | | Month-over-Month Change | -$2.57 | | vs. August 2025 | -$0.17 | | Avg. Class I Price Across All Orders ($/cwt) | $22.88 | | Florida FMMO (highest, $/cwt) | $25.56 | | Arizona FMMO (lowest, $/cwt) | $21.36 | | WASDE Class III Forecast ($/cwt) | $16.25 | | WASDE Class IV Forecast ($/cwt) | $18.15 | ## 6. Herd Dynamics and Milk Production: Cow Numbers Continue Rising Into August The supply-side story in 2026 is fundamentally a herd expansion story, and the data from USDA NASS continues to validate that narrative entering late summer. Recent reports confirm the U.S. dairy herd is growing, with even heifer inventory up by 100,000 after years of declining supplies. With more cows has come more milk, and the dog days of summer have done little to curb production, as the USDA's Milk Production report confirmed June milk output was up 2.3% from the year prior. Component-adjusted milk production grew 3.1% in May on account of a larger milking herd and a rebound in component tests. Summarizing dairy markets, a July 2026 Dairy Management Inc./NMPF Dairy Market Report noted that "more milk means more dairy products, and healthy domestic demand combined with exceptional export volumes have prevented cheese and butter volumes from becoming burdensome at the CME, even as prices are towards the lower end of their historic range." Based on the latest USDA monthly Livestock Slaughter data, the number of dairy cull cows marketed through U.S. slaughter plants in June 2026 was estimated at 208,100. That figure reflects modest culling relative to herd size, consistent with producers retaining cows as expansion margins remain positive. | U.S. Dairy Herd Snapshot: Summer 2026 | Data Point | |---|---| | June Y/Y Milk Production Growth | +2.3% | | May Component-Adjusted Production Growth | +3.1% | | Heifer Inventory Change | +100,000 head | | June Dairy Cull Cows (slaughter plants) | 208,100 head | | 2026 WASDE Milk Production Forecast | 238.1 billion lbs. | | 2025 Actual Milk Production | 231.7 billion lbs. | | Y/Y Forecast Increase | +6.4 billion lbs. | ## 7. U.S. Cheese Exports Hit All-Time High of 142.4 Million Pounds in June Perhaps the most striking single data point from reports released this week is the historic June cheese export figure, which fundamentally changes the export narrative for 2026. Cheese production continues to top year-ago volumes, and the product mix hints at uneven domestic demand. Cheese output reached 1.23 billion pounds in June, up 1.1% from June 2025. Manufacturers made more Cheddar and less Mozzarella, confirming reports of tepid pizza sales. Cheese shipments jumped to an all-time high of 142.4 million pounds in June, up 24% from last year's record-setting volumes. The export record underscores how U.S. cheese has become increasingly price-competitive on the global stage as domestic CME prices remain well below the $2.00/lb levels seen during parts of 2024 and 2025. Contacts in Europe report strong retail demand for cheese. Food service demand varies somewhat throughout the region but is good overall. Some stakeholders say they are getting additional requests for Q4 contracts. Cheese production remains steady in the East, active in the Central region, and robust in the West. The GDT cheddar result from August 4 confirms international appetite: results showed cheddar's average winning price was $3,723 per ton ($1.69 per pound), up 3.8% from the previous auction. | U.S. Cheese Trade Snapshot: June 2026 | Value | Y/Y Change | |---|---|---| | Total Cheese Production (excl. cottage) | 1.23 billion lbs. | +1.1% | | Cheese Exports | 142.4 million lbs. | +24% | | Cheddar Production Direction | Up | More vs. Mozzarella | | GDT Cheddar Average Price (Aug 4 event) | $3,723/MT ($1.69/lb) | +3.8% | ## 8. NDM and Whey: Tight SNF Balance Sheets Support High Powder Prices, Exports Under Pressure The nonfat dry milk and whey complex is experiencing the opposite problem from cheese: domestic demand for protein products is absorbing so much supply that exports are being squeezed out. In June, combined production of NDM and skim milk powder (SMP) slumped to 193.6 million pounds, down 2.4% year over year, to the lowest tally for the month since 2013. Shipments abroad fell just shy of 106 million pounds in June, on par with daily average exports in May and the slowest export pace in nearly seven years. Low production volumes and product recalls pushed U.S. manufacturers to focus on the domestic market this spring. Exceptional domestic demand for proteins, both in the form of NDM and whey protein concentrates, has reduced export availability for those products. That dynamic pushed the CME spot NDM price to $1.7450/lb by the close of the week of August 10-14 and then to $1.8100/lb during this reporting week, a stark contrast to the $1.50s range seen just three weeks earlier. Dry whey extra grade closed the prior week at $0.6900, holding in a narrow band. The GDT SMP category has been supportive: the NDM market got a lift from a 1.2% increase in SMP prices at a recent Global Dairy Trade auction. | NDM and Whey Complex: August 2026 | Value | Context | |---|---|---| | CME Spot NDM (week of Aug 15-21) | $1.8100/lb | Multi-month high | | CME Spot NDM (week of Aug 7) | $1.5775/lb | Starting point | | June NDM+SMP Combined Production | 193.6 million lbs. | Lowest June since 2013 | | June NDM/SMP Exports | ~106 million lbs. | Slowest in 7 years | | CME Dry Whey (extra grade) | $0.6900/lb | Steady | ## 9. H5N1/HPAI in Dairy Cattle: NMTS Surveillance Active, California Remains Stage 3 Affected The HPAI H5N1 situation in U.S. dairy cattle continued to generate regulatory activity this week, even as no dramatic new outbreak headlines dominated the news cycle. The National Milk Testing Strategy (NMTS) remains the backbone of federal surveillance. USDA's NMTS requires the nationwide collection and sampling of raw (unpasteurized) milk samples from silos at dairy processing facilities. NMTS is intended to support the rapid implementation of enhanced biosecurity measures that decrease the risk of transmission to other livestock and to inform efforts that protect farmworkers. Since April 29, 2024, a federal order has been in effect, requiring testing of lactating dairy cattle for H5N1 prior to interstate movement, and reporting of positive nucleic acid detection and serology results to USDA APHIS. A second federal order that went into effect December 6, 2024, requires raw milk samples to be collected from milk silos at dairy processing facilities nationwide as part of the NMTS, intended to complement the April federal order by facilitating comprehensive H5N1 surveillance of the nation's milk supply and dairy herds. On the state level, California has not met the negative testing requirements necessary to be classified as an unaffected state, and thus California remains an Affected State still at NMTS Stage 3. This is particularly consequential given California's status as the largest dairy state by volume. A notable longer-term risk factor flagged by USDA APHIS remains the detection of a second H5N1 genotype in dairy cattle: NVSL confirmed the presence of HPAI H5N1 clade 2.3.4.4b, genotype D1.1, marking the first time this genotype had been detected in dairy cattle. Genotype D1.1 represents the predominant genotype detected in North American migratory birds during the fall and winter of 2024-2025. All previous detections in dairy cattle had been clade 2.3.4.4b, genotype B3.13. ## 10. Butter Market: Inventory Pressure Pushes Grade AA Below $1.47 Butter remains the one major CME dairy commodity clearly on the defensive in August 2026, weighed down by seasonal production strength and what the trade describes as ample inventory coverage. CME spot trading of butter is active, with prices sliding lower. Bulk butter overages in the East range from 2 cents below to 5 cents above market, with the Central region having less room, and the West ranging from 1 cent below to 5 cents above. The butter market tone overall is described as firm and steady, despite the price slide. The contrast with year-ago levels is striking. In the week of August 18-20, 2025, CME butter Grade AA was trading at $2.2900 per pound on August 20, 2025, and as high as $2.3325 on August 18, 2025. The current print near $1.46/lb represents a roughly 36% decline from the comparable period one year ago, reflecting the dramatic reversal in the dairy fat complex since the record highs of late 2024 and early 2025. At the GDT August 4 auction, butter prices fell 2.3% to an average of 4,530 euros per tonne. International butter weakness is thus compounding the domestic pressure, leaving fat-complex producers and processors with limited near-term upside without a meaningful supply disruption. | Butter Price Comparison: August 2025 vs. August 2026 | Price ($/lb) | |---|---| | CME Butter Grade AA: Aug 18, 2025 | $2.3325 | | CME Butter Grade AA: Aug 20, 2025 | $2.2900 | | CME Butter Grade AA: Week of Aug 10-14, 2026 (weekly avg.) | $1.4755 | | CME Butter Grade AA: Aug 14, 2026 (close) | $1.4600 | | GDT Butter (Event 409, Aug 4, euros/MT) | 4,530 (down 2.3%) | | Year-over-Year Change | Approx. -36% | ## 11. Global Dairy Trade Context: NZ Seasonal Ramp-Up, China Demand Recovery Key Watch Items The August 18 GDT Event 410 result does not exist in isolation. Two structural forces are reshaping global dairy trade dynamics through the back half of 2026: the seasonal acceleration of New Zealand production and a tentative but real recovery in Chinese import demand. A major New Zealand dairy cooperative maintained its projected total SMP offerings for the next 12 months. August marks the seasonal increase of New Zealand product volumes on the GDT platform, in line with the seasonal curve. This seasonal volume ramp traditionally pressures spot SMP prices globally, but the August 18 GDT result suggests buyers were willing to absorb the additional volume at firmer prices, signaling that demand is keeping pace with supply. Rising New Zealand exports and recovering Chinese imports signal firmer demand, with buyers concentrating on October and November coverage. The market appears more balanced, with demand improving while future supply uncertainty supports prices. For U.S. exporters, the GDT cheese results are the most directly relevant signal. Cheddar's average winning price at the August 4 GDT auction was $3,723 per ton ($1.69 per pound), up 3.8%. Average winning prices by contract month ranged from $3,720/ton for September to $3,815/ton for January 2027. The upward forward curve on GDT cheddar suggests end-users are booking coverage ahead of potential supply tightening in Q4. ## 12. Corn and Feed Costs: Lower Than Year-Ago but Tight 2026-27 Balance Sheet Emerging Feed cost dynamics are shifting subtly in a way that could affect dairy profitability margins through the remainder of 2026 and into 2027. The August WASDE's 2026-27 U.S. corn outlook is for lower supplies, unchanged domestic use, larger exports, and smaller ending stocks. Corn production is forecast at 16 billion bushels, up just 13 million from last month, with a 1.2 million-acre increase in harvested area largely offset by a reduced yield forecast. At that level, it would still be the second-largest U.S. corn harvest on record, if realized. The tightening 2026-27 corn balance sheet, relative to the exceptional 2025 crop year, implies feed costs could trend modestly higher in late 2026 and into 2027. For dairy operations running breakevens near current milk prices, any meaningful move in corn or soybean meal will matter. The Class III forecast at $16.25/cwt remains relatively tight against all-in cost-of-production estimates for many upper-Midwest producers. | USDA August WASDE Corn Outlook (2026-27) | Detail | |---|---| | Corn Production Forecast | 16.0 billion bushels | | Month-over-Month Change | +13 million bushels | | Balance Sheet Direction | Tighter (smaller ending stocks) | | vs. 2025 Crop | Down approximately 6% | | Historical Rank (if realized) | 2nd largest on record | --- ## Quick Hits - USDA's July WASDE had previously raised the 2026 milk production forecast to 236.6 billion pounds, meaning the August revision to 238.1 billion pounds added another 1.5 billion pounds in two months. - After three consecutive negative GDT events, the GDT price index had already turned positive with a 1.5% gain in the July 21 auction, setting the stage for the August 4 and August 18 gains. - Lactose posted the largest percentage gain at the August 4 GDT auction, increasing 4.1% to 1,543 euros per tonne, highlighting continued demand for specialty dairy ingredients in food processing and nutrition sectors. - Contacts report strong demand for mozzarella in Europe with spot inventories tight, as milk output is declining in Europe seasonally and more milk is going towards mozzarella, limiting production of other cheese varieties. - USDA APHIS updated interstate movement rules such that lactating dairy cattle moving from states with NMTS Unaffected State Status are no longer required to test for H5N1 prior to movement. - The August 4 GDT auction featured 170 participating bidders and 132 winning bidders, with prices higher for cheddar, mozzarella, SMP, WMP, and lactose, and lower for butter, AMF, and buttermilk powder. - Dry whey continued to trade in a very narrow band, closing near $0.6900 to $0.6925/lb with limited sales volume on most days. --- ## What to Watch Next Week **CME NDM follow-through.** The move from $1.5775/lb to $1.8100/lb in NDM over roughly two weeks is the sharpest near-term price signal in the complex. Whether this holds above $1.75 or fades will determine Class IV trajectory heading into Q3 settlement. **GDT Event 411 (September 2, 2026).** With Event 410 up 2.3% and the seasonal NZ volume ramp underway, the next auction will test whether buyer demand is durable or front-loaded. SMP and WMP price direction will be the key tell. **USDA NASS Dairy Products Report.** The monthly report covering July 2026 production volumes for cheese, butter, NDM, and whey is expected in late August and will either confirm or challenge the narrative of balanced-to-tight SNF inventories. **California NMTS Stage 3 status.** Any APHIS announcement moving California off the Affected State list would have immediate interstate movement implications for the largest dairy state and could shift biosecurity cost structures for western producers. **September WASDE (September 11, 2026).** With the August WASDE already at 238.1 billion pounds for 2026, traders will watch whether USDA pushes the forecast even higher as late-summer cow numbers continue to beat expectations. **Class I September base price announcement.** Due from USDA around August 22-23, the September Class I base will reflect August CME averages for blocks and barrels. Given the sharp run-up in blocks mid-August, the September base could partially reverse the $2.57/cwt drop seen in August. **Corn harvest condition updates.** With the 2026-27 WASDE already signaling a tighter corn balance sheet, the weekly USDA NASS Crop Progress reports and any weather developments in the Central Corn Belt carry increasing weight for feed cost forecasting. --- *The Therio Dairy Newsdesk provides weekly intelligence for dairy producers, cooperatives, processors, and industry professionals across the United States. Coverage draws on USDA NASS, AMS, APHIS, and ERS reports, CME Group spot and futures markets, Global Dairy Trade auction data, and leading industry trade publications. All prices and forecasts are for informational purposes only and do not constitute financial or risk management advice. For questions, submissions, or subscription information, contact the Therio Dairy Newsdesk editorial team.*