Dairy Industry News Roundup: Week of August 22 - 28, 2026

# Dairy Industry News Roundup: Week of August 22 - 28, 2026 U.S. dairy markets closed the week of August 22-28 in a state of productive tension: USDA NASS confirmed July national milk output reached 20.1 billion pounds, up 2.2 percent year over year, while CME spot nonfat dry milk surged to $1.85 per pound on Thursday, August 27, representing its highest print in months, even as cheese blocks slid under the $1.50 threshold and butter continued a prolonged retreat from midsummer highs. The August WASDE nudged the 2026 full-year milk production forecast to 238.1 billion pounds. Meanwhile, the Global Dairy Trade (GDT) Event 409 on August 4 confirmed a second consecutive index gain, with cheddar jumping 3.8 percent to EUR 3,227 per tonne, and the H5N1/HPAI situation across U.S. dairy herds remained a background but ever-present operational variable heading into September. --- --- ## 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. NASS July Milk Production: 20.1 Billion Pounds, Herd at 9.71 Million Head USDA NASS released its July Milk Production report on August 21, 2026. The headline number is unambiguous: milk production in the United States during July totaled 20.1 billion pounds, up 2.2 percent from July 2025. The 24-major-states subset told essentially the same story: milk production in the 24 major states during July totaled 19.4 billion pounds, up 2.3 percent from July 2025, while June revised production came in at 19.1 billion pounds, up 3.1 percent from June 2025. The upward June revision is noteworthy for supply modeling purposes. The June revision represented an increase of 124 million pounds, or 0.7 percent, from last month's preliminary production estimate. On a per-cow basis, production per cow in the 24 major states averaged 2,093 pounds for July, 5 pounds above July 2025. Perhaps the most market-moving figure buried inside the report is the national herd inventory. The number of milk cows on farms in the United States was 9.71 million head, 199,000 head more than July 2025. That is a substantial year-over-year herd expansion and the primary driver of the WASDE's upward production revision. For Class III and Class IV futures traders, a herd growing nearly 200,000 head year-over-year creates persistent headline supply pressure that will require equally robust demand to absorb. | Metric | July 2026 | July 2025 | YoY Change | |---|---|---|---| | U.S. Total Milk Production | 20.1 bil lbs | ~19.7 bil lbs | +2.2% | | 24-State Production | 19.4 bil lbs | ~18.9 bil lbs | +2.3% | | Production per Cow (24-State) | 2,093 lbs | 2,088 lbs | +5 lbs | | U.S. Milk Cow Inventory | 9.71 mil head | ~9.51 mil head | +199,000 head | | June 2026 (Revised) | 19.1 bil lbs | ~18.5 bil lbs | +3.1% | ## 3. August WASDE: 2026 Full-Year Milk Forecast Raised to 238.1 Billion Pounds USDA's August WASDE raised the 2026 milk production forecast slightly to 238.1 billion pounds on expectations of a larger cow herd and a decrease in milk output per cow. The nuance here matters: USDA is acknowledging that herd growth is outrunning per-cow efficiency gains, a dynamic that tends to support cheese and butter output volumes even as individual animal productivity plateaus seasonally. USDA's August Supply and Demand report projected more dairy cows, more milk production, and more cheese and butter exports, with USDA increasing its expected milk production forecasts for this year and next year based on cow inventories in the most recent Milk Production report. On the export side, the WASDE delivered mixed guidance. For 2026, the fat-basis export forecast was raised, anticipating higher exports of cheese, while more skim-solids basis exports are expected for 2026 due to more shipments of whey products, lactose, and dried skim milk products. However, traders should note that the price forecast for 2025 butter was lowered from the previous month based on recent price weakness, and the Class III price was unchanged based on cheese and whey prices. | WASDE Item | August 2026 Forecast | Change from July | |---|---|---| | 2026 Milk Production | 238.1 bil lbs | Raised | | Fat-Basis Exports | Higher | Up (cheese-led) | | Skim-Solids Exports | Higher | Up (whey, lactose, NDM) | | 2025 Butter Price Forecast | Lowered | Down | | Class III Price | Unchanged | Flat | | 2027 All-Milk Price | $19.80/cwt | Down $0.05 | ## 4. CME Spot Markets: NDM Surges to $1.85, Blocks Break Below $1.50 The week of August 22-28 produced the most notable CME spot market move in powder since the spring spike. Nonfat dry milk was up $0.0175 to $1.85 on Thursday, August 27, in mixed trading at the Chicago Mercantile Exchange. That $1.85 print represents a significant step-up from the range the market inhabited just three weeks prior, when NDM was trading in the $1.57-$1.58 corridor. The cheese complex told a contrasting story. Forty-pound cheese blocks were down $0.0150 to $1.4950 on Thursday, with thirteen sales reported ranging from $1.49 to $1.5050. That sub-$1.50 block print is a bearish signal, particularly against the backdrop of record cheese export volumes reported in June. Cheese barrels were unchanged at $1.5750, with no sales reported. The widening barrel-to-block spread -- at roughly 2.8 cents -- signals that barrel demand is holding while block buyers are stepping back. Butter continued its retreat. Butter was down $0.0050 to $1.46, with nineteen sales reported ranging from $1.4450 to $1.46. Three weeks earlier, on August 21, CME cash dairy trade had ended that week with butter up $0.0325 to $1.4625, with four sales reported ranging from $1.45 to $1.4625. Butter's failure to sustain that small bounce underscores the ongoing bearish fat-market narrative. Dry whey was down $0.01 to $0.73 on August 27, continuing a slow but steady drift higher from the $0.69 range seen in early August. | CME Spot Product | Aug 27 Close | Aug 21 Close | Approx. Aug 7 Close | Direction | |---|---|---|---|---| | Cheddar Blocks (40#) | $1.4950/lb | $1.5275/lb | $1.555/lb | Down | | Cheddar Barrels | $1.5750/lb | $1.5650/lb | $1.5475/lb | Sideways-Up | | Butter (Grade AA) | $1.4600/lb | $1.4625/lb | $1.5125/lb | Down | | NDM (Grade A) | $1.8500/lb | $1.8000/lb | $1.5775/lb | Strong Up | | Dry Whey | $0.7300/lb | $0.7025/lb | $0.6950/lb | Slowly Up | ## 5. USDA Dairy Market News: Central Region Milk Tightening, Western Demand Softer The USDA Agricultural Marketing Service Dairy Market News for the week of August 10-14 (the most recent published edition available this week) provided important regional texture that remains relevant for the August 22-28 period. CME spot cheese prices moved moderately higher, and inventories remain within desired ranges due to active bulk cheese shipments to the Midwest for repackaging, with cheesemakers in the Central region reporting strong demand amid tightening milk availability. The regional divergence between Central and West continues to define the U.S. cheese complex's internal dynamics. Demand in the West is weaker for spot loads from cheese manufacturers, with domestic demand ranging from steady to lighter, even as cheese stands out as the most advertised retail commodity. Meanwhile, Class III spot milk pricing in the Central region ranged from flat Class to $5.00 over, illustrating that basis strength in the Midwest is supporting Class III signals despite the softening block price on the CME. The butter market tone was described as firm in mid-August but has since slipped. Grade AA butter closed at $1.4600, with the weekly average for Grade AA at $1.4755, down $0.0275 from the prior week. The butter market has now given back a substantial portion of its early-August gains, putting pressure on Class IV price expectations for September. ## 6. Global Dairy Trade Event 409 (August 4): Second Consecutive Index Gain, Cheese Leads The Global Dairy Trade (GDT) Index recorded its second consecutive increase, rising 0.7 percent at GDT Event 409, held on August 4, reflecting improving sentiment in international dairy markets despite mixed commodity performance. A total of 40,504 metric tonnes of dairy products were traded, with the average price reaching EUR 3,275 per metric tonne, marking the second straight increase in the GDT price index after three consecutive declines. Cheese was the standout performer. Cheese recorded some of the strongest gains during the auction, with cheddar increasing 3.8 percent to EUR 3,227 per tonne and mozzarella rising 1.0 percent to EUR 3,461 per tonne. Specialty ingredients also gained ground. Among all commodities traded, lactose posted the largest percentage gain, increasing 4.1 percent to EUR 1,543 per tonne, highlighting continued demand for specialty dairy ingredients used across food processing and nutrition sectors. Fat products were the notable drag. Butter prices fell 2.3 percent to EUR 4,530 per tonne, butter milk powder declined 2.8 percent to EUR 3,438 per tonne, and anhydrous milk fat (AMF) also recorded a modest 0.8 percent decrease, averaging EUR 5,520 per tonne. By August 4, SMP, WMP, and the all-products average had recovered a little, while butter was still on a downward trend. | GDT Event 409 Product | Price (EUR/tonne) | Change vs. Prior Event | |---|---|---| | Cheddar | EUR 3,227 | +3.8% | | Mozzarella | EUR 3,461 | +1.0% | | Whole Milk Powder | EUR 3,019 | +0.2% | | Butter | EUR 4,530 | -2.3% | | Butter Milk Powder | EUR 3,438 | -2.8% | | AMF | EUR 5,520 | -0.8% | | Lactose | EUR 1,543 | +4.1% | | All-Products Average | EUR 3,275 | +0.7% | The next GDT event (Event 410) is scheduled for late August and results are expected to land during the final days of this reporting week. Expect NDM and SMP to be closely watched given the aggressive U.S. spot NDM move to $1.85 this week. ## 7. H5N1/HPAI in Dairy Cattle: NMTS Framework Holds, Interstate Movement Rules Evolve The H5N1 situation in U.S. dairy cattle remained a persistent but slowly stabilizing operational backdrop this week. USDA APHIS's National Milk Testing Strategy (NMTS) continues to serve as the primary surveillance architecture. USDA's NMTS requires the nationwide collection and sampling of raw (unpasteurized) milk samples and is intended to support the rapid implementation of enhanced biosecurity measures that decrease the risk of transmission to other livestock, while also informing efforts that protect farmworkers by lowering their risk of exposure. A significant regulatory development from earlier this spring remains in full effect this week. USDA APHIS issued updated guidance related to the April 2024 Federal Order that required testing of lactating dairy cattle before they move across state lines, with lactating dairy cattle moving interstate from states with Unaffected State Status under the NMTS no longer required to be tested for HPAI H5N1 prior to movement. Unaffected State Status requires ongoing testing and surveillance activities to confirm the absence of HPAI in the state's dairy herds, and this update followed a United States Animal Health Association (USAHA) resolution received in October 2025. On the genotype front, the appearance of a second HPAI H5N1 variant in dairy cattle earlier in 2026 remains a concern for animal health officials. USDA-APHIS National Veterinary Service Laboratories (NVSL) had detected a second genotype of HPAI H5N1 in dairy cattle, confirming 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. The detection was the result of Nevada state tracing and investigation, following positive results from silo testing under USDA's NMTS. The detection of HPAI H5N1 in lactating dairy cattle does not pose a risk to consumer health or compromise the safety of the commercial milk supply, as pasteurization effectively inactivates the HPAI virus, and milk from affected animals is diverted or destroyed to prevent entry into the food supply. ## 8. U.S. Cheese Exports Hit Record Highs: June All-Time High of 142.4 Million Pounds While CME block prices have softened heading into late August, the underlying export demand story for U.S. cheese remains a structural positive that is difficult to overstate. Cheese shipments jumped to an all-time high of 142.4 million pounds in June, up 24 percent from last year's record-setting volumes, with U.S. cheese exports to Mexico notching a fresh high and sales to South Korea and Japan remaining strong. Cheese production continued to top year-ago volumes, with output reaching 1.23 billion pounds, up 1.1 percent from June 2025, and the product mix shifted toward more Cheddar and less Mozzarella, confirming reports of tepid pizza sales. The Cheddar-heavy production mix also explains why blocks softened on CME while barrels remained relatively firm, as barrel cheese is often the product of choice for repackaging and domestic retail slicing operations. For 2026, the WASDE fat-basis export forecast was raised in anticipation of higher exports of cheese, lending further fundamental support to the export channel even as domestic demand signals remain uneven. With cheese export volumes at record highs and the WASDE formally acknowledging accelerating shipment trends, the U.S. cheese complex is increasingly relying on international buyers to absorb growing domestic production volumes. | U.S. Cheese Export Metric | June 2026 | June 2025 | YoY Change | |---|---|---|---| | Total Cheese Exports | 142.4 mil lbs | ~114.8 mil lbs | +24% | | Key Markets | Mexico, S. Korea, Japan | Mexico, S. Korea, Japan | All-time highs | | Cheese Production | 1.23 bil lbs | ~1.22 bil lbs | +1.1% | ## 9. NDM and SMP Production Slumps Even as Spot Prices Surge The explosive move in CME spot NDM to $1.85 this week is occurring against a backdrop of declining domestic production, which provides a fundamental rationale for the price strength. The U.S. dairy industry continues to make more milk and more components, but in June, combined production of NDM and skim milk powder (SMP) slumped to 193.6 million pounds, down 2.4 percent year over year to the lowest tally for the month since 2013. More skim-solids basis exports are expected for 2026 due to more shipments of whey products, lactose, and dried skim milk products, meaning demand-pull is also at work. The confluence of lower domestic NDM/SMP production, rising export demand for skim-solids products, and tightening global SMP inventories has created the conditions for the $1.85 NDM print seen on August 27. This is not a speculative spike; it is the market repricing a product where supply and demand fundamentals have materially shifted over the past 60 days. Whey protein isolate (WPI) prices range from $14 to the upper $14s per pound, and the spread between WPC 80 percent and WPI has widened to around $2, which may encourage more WPI production. That production incentive could, on the margin, redirect some milk solids away from standard dry whey powder, putting mild upward pressure on dry whey prices, which are now at $0.73 per pound. ## 10. USDA DMN: Whey Protein Complex Shows Strength, WPC 80% in $12-$13 Range The USDA Dairy Market News report for the week of August 10-14 provided the most granular recent snapshot of the whey complex ahead of this week. WPC 80 percent is reported in the $12 to $13 per pound range, while whey protein isolate (WPI) prices range from $14 to the upper $14s. These levels indicate the specialty protein market is functioning under a tighter supply balance than the commodity dry whey market would suggest. The South American supply picture adds a wildcard to global powder and whey trade forecasting. Milk deliveries across South America remain above year-ago levels, sustaining supply pressure on international powder values, while in Argentina, the region's largest powder exporter, the farm-gate price rose for a fifth consecutive month in July and contacts report growing interest for fourth-quarter delivery as seasonal ice cream manufacturing begins to ramp up. On the New Zealand side, the 2025-2026 season milk price forecast remains at $9.74 per kilogram of milk solids, reflecting a U.S. cents per NZ dollar exchange rate assumption of 0.5905 and a forecast range of $9.51 to $10.33 per kilogram of milk solids. The September 2026 milk price futures contract last settled at $9.75 per kilogram of milk solids. ## 11. HPAI Testing Policy: APHIS Unaffected State Status Reduces Movement Friction The operational burden of H5N1 testing on interstate cattle movement, which has been a friction point for producers and sale barn operators since the April 2024 Federal Order took effect, has been meaningfully reduced for producers in states that have achieved Unaffected State Status under the NMTS. USDA APHIS issued updated guidance indicating that lactating dairy cattle moving interstate from states with Unaffected State Status under the NMTS are no longer required to be tested for HPAI H5N1 prior to movement. This is not a rollback of the broader surveillance architecture. Unaffected State Status requires ongoing testing and surveillance activities to confirm the absence of HPAI in the state's dairy herds, meaning the testing work is simply moved to a population-level surveillance model rather than individual pre-movement testing. For operations in states that have achieved this status, the regulatory relief is real: it reduces testing costs, laboratory bottlenecks, and shipment delays that have affected heifer movement and replacement cattle markets throughout the past two years. APHIS does not anticipate any impact on trade of cattle or beef and dairy products from this updated guidance. The 2026 dairy herd expansion -- now confirmed at nearly 200,000 head above year-ago levels nationally -- reflects in part the increased ease of heifer movement as more states achieve and maintain Unaffected State Status. ## 12. U.S. Butter Market: Price Weakness Persists, Cold Storage Build Weighing on Sentiment CME spot butter's inability to hold above $1.50 per pound this week, and its continued drift toward $1.46, reflects a market that is well-supplied and facing limited near-term demand catalysts. A recent GDT auction saw butter at $5,336 USD per ton, down 5 percent compared to the previous trading event, driven by an increased supply of raw milk and higher butter production in the EU and the United States, which boosted global export availability and intensified international market competition. Manufacturers' warehouses have accumulated substantial butter inventories as a result of global raw milk overproduction in recent months, and a 19 percent drop in China's butter imports during January through February 2026 further contributed to sustained heavy butter supplies on the market. With U.S. butter production running above year-ago levels and cold storage inventories elevated, the path of least resistance for butter prices remains lower heading into the September-October shoulder season before holiday baking demand materializes. The WASDE's decision to lower the 2025 butter price forecast underlines the bearish consensus. The price forecast for 2025 butter was lowered from the previous month based on recent price weakness. Class IV futures traders should expect continued volatility around cold storage data releases, with any build in butter inventories likely to reinforce downward price pressure. | CME Butter Price Trend | Price | |---|---| | Week ending Aug 7, 2026 | $1.5125/lb | | Week ending Aug 21, 2026 | $1.4625/lb | | Aug 27, 2026 (Thursday) | $1.4600/lb | | YTD Change | Down | --- ## Quick Hits - CME spot NDM had already climbed 1.75 cents to $1.5775 as of August 7, setting the stage for this week's surge to $1.85, a move of nearly 30 cents in approximately three weeks. - The number of milk cows on farms in the 24 major states reached 9.27 million head in July, 185,000 head more than July 2025. - GDT total volume traded rose sharply to 40,504 tonnes as of the August 4 auction, recovering from a low of 12,922 tonnes as of June 16, 2026. - NVSL confirmed HPAI H5N1 clade 2.3.4.4b, genotype D1.1 in dairy cattle earlier this year, with genotype D1.1 representing the predominant genotype detected in North American migratory birds during the fall and winter of 2024-2025. - European contacts reported strong retail demand for cheese this month, with food service demand varying but generally good overall, though sales are declining in southern Europe. - CME spot dry whey, described as the epitome of stability, has been inching higher, with the August 7 close at $0.695 per pound and Thursday, August 27 at $0.73 per pound. - USDA notes that milk output per cow growth is expected to continue into 2026 as farmers take advantage of genetic advancements and improved herd management. --- ## What to Watch Next Week **GDT Event 410 Results.** The next Global Dairy Trade auction will deliver fresh price signals in the final days of August or early September. With NDM spiking on CME and SMP under recovery on the GDT index, watch for whether international buyers step up for SMP and WMP volumes, and whether the cheddar gain from Event 409 is sustained or gives back. **USDA Cold Storage Report.** August cold storage data will be critical for butter and cheese market direction. A build in butter inventories would confirm the bearish fundamental picture; any draw would be a significant surprise. Cheese inventory levels will inform whether the record export volumes are actually thinning storage. **CME Spot NDM Follow-Through.** The $1.85 close on August 27 needs validation. If NDM holds above $1.80 in the first week of September, the Class IV price implication for October contracts becomes materially more bullish. A retreat below $1.75 would suggest the move was short-covering rather than fundamental. **H5N1 APHIS Weekly Herd Confirmations.** USDA APHIS updates confirmed herd cases on a rolling basis. Watch for any spread into previously unaffected states, which would trigger reinstatement of interstate testing requirements for those states and could tighten heifer movement again. **Class III September Futures.** With blocks slipping below $1.50 and barrels holding near $1.575, the block-barrel spread inversion will attract attention from Class III traders. September Class III futures will be repricing in real time around these CME spot moves. **Feed Cost Indicators.** Corn and soybean meal futures remain a critical input variable for dairy margin calculations. With the corn crop described as solid despite some dry conditions in select regions, watch for any weather-related August crop production revisions that could alter fall feed cost expectations. **FMMO September Advance Prices.** USDA will announce September Federal Milk Marketing Order advance Class I and Class II prices in the coming days, providing the first formal signal of where blended milk prices are tracking for the new month and offering context for producer mailbox price expectations. --- *The Therio Dairy Newsdesk delivers weekly data-forward coverage of U.S. and global dairy markets, drawing on USDA NASS, WASDE, CME spot and futures data, USDA AMS Dairy Market News, Global Dairy Trade auction results, and USDA APHIS HPAI surveillance reports. Therio's mission is to put actionable numbers in front of producers, processors, cooperatives, and traders who make decisions based on market reality, not market noise. Questions, tips, and corrections can be directed to the Therio editorial team.*