Dairy Industry News Roundup: Week of August 29 - September 4, 2026

# Dairy Industry News Roundup: Week of August 29 - September 4, 2026 U.S. dairy commodity markets closed out the holiday-shortened week of August 29 through September 4, 2026, with CME spot butter rebounding to $1.4075 per pound on Wednesday while cheese blocks held at $1.4750 and NDM slipped to $1.88, even as the USDA National Dairy Products Sales Report for the week ending August 29 showed butter averaging $1.51 and cheddar blocks averaging $1.61. Internationally, GDT Auction No. 411 on September 1 posted a fourth consecutive price-index gain of 0.9%, settling at an average winning price of $3,910 per metric ton, though Cheddar fell 6.6% on the platform. Meanwhile, USDA confirmed its August WASDE-era 2026 U.S. milk production estimate at 238.1 billion pounds, the September WASDE is due September 11, and HPAI H5N1 surveillance through the National Milk Testing Strategy (NMTS) continued to dominate biosecurity discussions ahead of fall cattle movement season. --- --- ## 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. CME Spot Dairy Markets: Butter Bounces, Cheese Quiet, NDM Eases Into Long Weekend Cash dairy prices were mixed Wednesday, September 2 at the Chicago Mercantile Exchange, setting the tone for a week defined more by thin holiday volume than directional conviction. With the CME dark on Monday, September 1 (Labor Day), the trading week effectively compressed to four sessions, limiting price discovery across all contracts. Butter was the week's standout mover, rising $0.0150 to $1.4075 per pound, with 19 sales reported ranging from $1.39 to $1.41. Forty-pound cheddar blocks closed unchanged at $1.4750, with 33 sales reported ranging from $1.4650 to $1.49. Cheese barrels were also unchanged at $1.5325. Nonfat dry milk fell $0.02 to $1.88, with eight sales reported ranging from $1.88 to $1.90. Dry whey was unchanged at $0.74 per pound. The barrel-block inversion, with barrels sitting roughly 5.75 cents above blocks, reflects processors directing Class III milk toward barrel production in a market where natural cheese demand has been choppy. Class III futures traders will be watching whether the September 11 WASDE and accompanying ERS Livestock, Dairy, and Poultry Outlook shift any official price projections. | Product | CME Close (Sept. 2) | Week Change | Sales Reported | |---|---|---|---| | Cheddar Blocks (40 lb) | $1.4750/lb | Unchanged | 33 | | Cheddar Barrels | $1.5325/lb | Unchanged | 0 | | Butter (Grade AA) | $1.4075/lb | +$0.0150 | 19 | | Nonfat Dry Milk (Grade A) | $1.8800/lb | -$0.0200 | 8 | | Dry Whey (Extra Grade) | $0.7400/lb | Unchanged | 0 | ## 3. USDA National Dairy Products Sales Report: Weighted Average Prices Tell a Different Story The USDA Agricultural Marketing Service released its National Dairy Products Sales Report on September 2, 2026, covering the week ending August 29, 2026. The weighted-average survey prices, which capture broader physical market transactions outside CME spot, showed materially different levels than the exchange closes. Butter prices for 25-kilogram and 68-pound boxes meeting USDA Grade AA standards averaged $1.51 per pound, up 6.1 cents from the previous week. Cheddar cheese prices for 40-pound blocks averaged $1.61 per pound, down 1.1 cents. Nonfat dry milk prices averaged $1.68 per pound, an increase of 5.8 cents. Dry whey prices for bag, tote, and tanker sales averaged 65.3 cents per pound, a decrease of 1.4 cents. The report noted that 17 entities reported cheddar blocks, 15 reported butter, 19 reported nonfat dry milk, and 12 reported dry whey. The gap between the AMS weighted-average survey price and the CME close for butter (roughly 10 cents per pound) illustrates the disconnect that can open between physical-market participants and CME spot traders, particularly over holiday-compressed weeks. Class IV formula users will be closely tracking NDM's $1.68 weighted average as it feeds into the monthly component price calculations that underpin FMMO blend prices. | Product | AMS Wk. Ending Aug. 29 | Prior Week Change | |---|---|---| | Cheddar Blocks (40 lb) | $1.61/lb | -1.1 cents | | Butter (Grade AA) | $1.51/lb | +6.1 cents | | NDM (Extra Grade / USPHS Grade A) | $1.68/lb | +5.8 cents | | Dry Whey (Extra Grade) | $0.6530/lb | -1.4 cents | ## 4. GDT Auction No. 411 (September 1): Fourth Straight Gain, But Cheddar Plunges 6.6% The Global Dairy Trade recorded another increase in its price index at Auction No. 411, held on September 1, 2026, with an average winning price of USD 3,910 per metric ton and strong participation from international buyers. That was the fourth straight increase in the GDT price index. In this week's auction, which featured 157 participating bidders and 115 winning bidders, prices were higher for Mozzarella, skim milk powder, lactose, and buttermilk powder; and lower for Cheddar, whole milk powder, butter, and anhydrous milkfat. The price index was up 0.9%, with prices for individual product categories mixed. Skim milk powder and buttermilk powder were up 5.3% and 4.6%, respectively. Cheddar's average winning price was $3,503 per metric ton ($1.59 per pound), down 6.6%. The GDT platform offers dairy products from several global companies: Fonterra (New Zealand), Darigold, Valley Milk, and Dairy America (U.S.), Inalpi (Italy), Arla (Denmark), Arla Foods Ingredients (Denmark), BMI (Germany), Kerry Dairy (Ireland), and Solarec (Belgium). The SMP surge of 5.3% is the key takeaway for U.S. NDM exporters. The NDM market got a lift from SMP price increases at the GDT auction. The next GDT auction is scheduled for September 15. | GDT Product | Avg. Winning Price ($/MT) | Change vs. Prior Auction | |---|---|---| | Cheddar | $3,503 | -6.6% | | Skim Milk Powder | N/A (up 5.3%) | +5.3% | | Buttermilk Powder | N/A (up 4.6%) | +4.6% | | Overall Index | $3,910/MT avg. | +0.9% | ## 5. August WASDE Recap and September 11 Preview: 2026 Milk Production Locked at 238.1 Billion Pounds USDA's August WASDE raised 2026 milk production slightly to 238.1 billion pounds on expectations of a larger cow herd and a decrease in milk output per cow. The WASDE was released August 12. At 238.1 billion pounds, the 2026 milk production estimate would be up 6.4 billion from 2025's total of 231.7 billion pounds. The rate at which milk is produced is outpacing any dairy consumption increase, and coupled with other global competitors like the European Union and New Zealand, market analysts are warning of downward pressure on milk prices. The August WASDE raised 2026 milk production to 238.1 billion pounds on expectations of a larger cow herd and a decrease in milk output per cow. The next WASDE lands September 11, 2026. Traders and producers will be watching whether USDA adjusts its all-milk price projection for 2026, currently estimated at $14.45 per hundredweight. The 2026 average all-milk price was estimated at $14.45, up a nickel from last month. That figure would represent a steep decline from the 2025 average of $17.38, which was itself down from $20.75 in 2024. Producers enrolled in Dairy Margin Coverage (DMC) will be closely monitoring the September report for any revision in feed-cost assumptions that could affect margin calculations. | Year | USDA All-Milk Price ($/cwt) | Milk Production (bil. lbs.) | |---|---|---| | 2024 | $20.75 | N/A | | 2025 | $17.38 | 231.7 | | 2026 (Aug. WASDE Est.) | $14.45 | 238.1 | ## 6. FMMO Uniform Prices: July Blend Prices Fall After Six-Month Run Producers' milk checks are smaller in July as markets weigh on uniform milk prices across all Federal Milk Marketing Orders. Uniform milk prices fell in July after a six-month run of gains. The July retreat, tied directly to the softening CME component markets that characterized mid-summer trading, underscores the leverage that spot cheese and butter prices hold over FMMO blend prices. Class I differentials remain a structural pressure point as plant closures and shifting processing geography continue to alter regional milk flows. With August component prices taking shape from the CME data gathered through the final week of August, market participants are already running preliminary Class III and Class IV calculations. The AMS weighted-average NDM price of $1.68 per pound for the week ending August 29, up 5.8 cents, will provide a meaningful lift to the Class IV base, while the softer cheddar block trajectory creates headwinds for Class III. Dairy-RP coverage is available for the fourth quarter of 2026, with sign-up ending September 15, through the fourth quarter of 2027. Producers still without Q4 coverage should act quickly given the price environment. ## 7. H5N1 / HPAI in Dairy Cattle: NMTS Surveillance Continuous, Wisconsin Updates Guidance August 26 Updated as of August 26, 2026, the USDA voluntary Dairy Herd Status Program offers dairy producers the option to monitor their herds via weekly HPAI testing of bulk tank milk samples. DATCP is committed to working with state and federal partners, veterinarians, and producers to prevent further spread of HPAI to Wisconsin dairies. Efforts continue to follow cases in other states, test Wisconsin dairy farms through the National Milk Testing Strategy, and prevent further spread of the virus. In May 2026, USDA updated their guidance allowing the interstate movement of lactating dairy cattle without individual influenza A tests from states with Unaffected State Status under the National Milk Testing Strategy. That policy shift, which took effect earlier this spring, has materially eased movement logistics heading into fall show and sale season. Unaffected State Status requires ongoing testing and surveillance activities to confirm the absence of HPAI in the state's dairy herds. USDA continues to support the rapid development and timely approval of an H5N1 vaccine for dairy cows, in addition to other species. Several vaccine candidates for use in dairy cows are currently undergoing field trials. 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. Pasteurization effectively inactivates HPAI virus. A key genotype development earlier this year remains relevant to fall biosecurity planning. Using whole genome sequencing, USDA APHIS National Veterinary Service Laboratories 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. With fall migration beginning, biosecurity vigilance around wild bird contact is non-negotiable. ## 8. Cheese Production Exceeds Year-Ago Levels, Exports Hit Records, Mozzarella Demand Stays Soft Cheese production continues to top year-ago volumes, and the product mix hints at poor domestic demand. Cheese output reached 1.23 billion pounds, up 1.1% from June 2025. Manufacturers made more Cheddar and less Mozzarella, confirming reports of tepid pizza sales. Thankfully, exports thrived. Cheese shipments jumped to an all-time high of 142.4 million pounds, up 24% from the prior year. That record export volume represents a critical pressure-relief valve for a market producing more cheddar than domestic foodservice can absorb. The domestic-demand softness in Mozzarella, tied to sluggish restaurant traffic and cautious consumer spending, is being partially masked by the export boom. If trade headwinds emerge or a stronger dollar crimps competitiveness, the domestic inventory overhang could grow quickly. The GDT Cheddar price decline of 6.6% on September 1 is worth watching in the context of these export dynamics. At $3,503 per metric ton ($1.59 per pound), GDT Cheddar sits at a modest premium to CME blocks, which could begin to redirect some international buyers toward other origins. | Metric | June 2026 | June 2025 | Change | |---|---|---|---| | Total Cheese Output | 1.23 bil. lbs. | ~1.22 bil. lbs. | +1.1% | | Cheese Exports | 142.4 mil. lbs. | ~114.8 mil. lbs. | +24% (record) | | Mozzarella Share | Down (vs. prior year) | Higher | Negative shift | | Cheddar Share | Up (vs. prior year) | Lower | Positive shift | ## 9. NDM and SMP: Production Slumps, Exports Recover, Global Prices Lift In June, combined production of NDM and skim milk powder slumped to 193.6 million pounds, down 2.4% year over year to the lowest tally for the month since 2013. The production decline is paradoxical given the rising milk supply, but it reflects the redirection of solids-not-fat components into booming cheese manufacturing and growing butter churning. The surge in U.S. milk powder prices in February through May depressed exports. 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. But now they are paying closer attention to international values. The 5.3% SMP price gain on GDT Auction No. 411 provides a meaningful positive signal for U.S. NDM exporters re-entering the global market. For NDM, values north of $1.50 are relatively lofty, but much easier to sustain than the spectacular spring spike above $2.00. The AMS weighted-average NDM price of $1.68 per pound for the week ending August 29 suggests commercial buyers are still pricing at a premium to CME spot's $1.88 close, which may reflect contract structures and geographic premiums. ## 10. Milk Supply Dynamics: Herd Growth Drives July Culling Higher, Output Per Cow Dips Dairy cow slaughter at federally inspected plants in July was an estimated 227,600 head. The elevated culling rate reflects both herd productivity management and the financial calculus of producers managing margins in a declining all-milk price environment. Counterintuitively, heavier culling alongside a growing overall cow inventory indicates producers are replacing cull cows with younger, fresher animals rather than contracting the herd. U.S. milk output has continued to climb higher with each passing month as domestic and international demand warrants it, particularly with protein's chokehold on the consumer. Based on the latest Milk Production report, cow inventories are raised for 2026, while milk output per cow is reduced slightly for both 2026 and 2027. The per-cow output dip likely reflects a combination of heat stress effects across Upper Midwest and Plains herds in July and August, along with the dilution effect of bringing in younger, lower-producing animals. As Ben Laine of Terrain noted, "In this new era where cheese and butter exports are not just nice but necessary, a close eye on global markets will be increasingly important in understanding our domestic component values." | Herd Metric | Status | WASDE Direction | |---|---|---| | 2026 Cow Inventory | Raised | Up vs. July | | 2026 Milk/Cow | Reduced slightly | Down vs. July | | 2026 Total Milk Production | 238.1 bil. lbs. | Up 6.4 bil. vs. 2025 | | July Dairy Cow Culling | 227,600 head | Elevated | ## 11. Chobani Establishes First Pennsylvania Dairy Operation; Coca-Cola Fairlife Expansion Underway A nutrition incentive program championed by the International Dairy Foods Association (IDFA) to help low-income families purchase healthy fluid milk products is expanding to Oklahoma. The "Add Milk!" program expansion reflects growing interest in SNAP-adjacent dairy demand programs as fluid milk volumes face secular pressure from competing beverages. On the processing and investment side, Coca-Cola broke ground on a fairlife facility expansion in Michigan. The fairlife brand, which commands premium price points on the basis of its ultra-filtered, high-protein positioning, represents one of the few growth categories in fluid dairy. A Michigan expansion signals Coca-Cola's continued confidence in protein-beverage demand growth and will require incremental milk volumes from regional producers when it comes online. Separately, Dairy's Foundation awarded grant funding to organizations in Texas, Virginia, and Wisconsin to support programs focused on building healthy and vibrant dairy communities across the U.S. Those awards represent a continued commitment to community infrastructure even as the industry consolidates at the farm level. ## 12. Feed Costs and Risk Management: DMC Margins Under Pressure, Dairy-RP Q4 Window Closing The August corn outlook was for larger production, higher feed and residual use, reduced food, seed, and industrial use, and greater ending stocks. Corn production was estimated at 17.0 billion bushels, with average yield at 186.5 bushels per acre and harvested area of 91.3 million acres. The large corn crop, if sustained through harvest, is a meaningful feed-cost relief factor for dairy producers staring down a declining milk price environment. Lower feed costs alone will not offset the pressure from a sliding all-milk price. The DMC margin, which measures the gap between the all-milk price and a feed cost index, is compressing as 2026 progresses. The One Big Beautiful Bill Act reauthorized DMC for calendar years 2026 through 2031 and provided substantial program improvements, including establishing new production history provisions. Producers who have not yet reviewed the updated production history provisions under the reauthorized DMC program should contact their local USDA Farm Service Agency office. The announced interest rates on loans through the USDA Farm Service Agency are unchanged this month. As of the start of September 2026, interest rates for operating and ownership loans are unchanged compared to August. | Feed/Risk Metric | Status (Sept. 2026) | |---|---| | 2026 Corn Production Est. | 17.0 bil. bushels | | Corn Avg. Yield | 186.5 bu./acre | | Harvested Area | 91.3 mil. acres | | DMC Reauthorization | Through 2031 | | Dairy-RP Q4 Sign-Up Deadline | September 15, 2026 | | FSA Loan Rates | Unchanged vs. August | --- ## Quick Hits - The USDA voluntary Dairy Herd Status Program offers producers the option to monitor herds via weekly HPAI testing of bulk tank milk samples, which allows for easier interstate movement of lactating cattle without individual tests. - Market analysts, including NZX head of dairy insights Cristina Alvarado, characterized the September 1 GDT outcome as more resilient than anticipated given seasonal volume dynamics. - The recent GDT stabilization follows a turbulent mid-year period that saw Fonterra trim its opening 2026/27 seasonal farmgate milk price forecast midpoint to $9.25 per kg milksolids after a three-auction slump in July. - U.S. dairy exports rose 11% in February, with cheese exports setting a new monthly record, according to data cited in the Cheese Reporter's global trade coverage. - Intense summer heatwaves and dry spells are curtailing milk collection growth across parts of Europe and North America, adding a potential supply-tightening variable to Northern Hemisphere production forecasts heading into autumn. - Nearly 695,000 Oklahoma residents participate in SNAP, and for those families, the Add Milk! program helps stretch monthly food benefits while making it easier to choose milk. - The CME spot market is dark one additional day due to Labor Day, compressing the week's price discovery to four sessions and potentially exaggerating the significance of individual trades in thin holiday-week volume. --- ## What to Watch Next Week 1. **September 11 WASDE Release (12:00 PM ET):** The key report of September. Watch for revisions to the 2026 all-milk price forecast, any adjustment to the 238.1-billion-pound milk production estimate, and whether USDA nudges Class III and Class IV price projections given August's component-price trajectory. 2. **CME Spot Markets, Full Week Return:** With a full five-session week resuming after Labor Day, traders will establish fresh price direction for cheese blocks (still stuck near $1.4750), butter (watch the $1.40 pivot), and NDM. The barrel-block inversion at roughly 5.75 cents deserves close monitoring. 3. **GDT Auction No. 412 (September 15):** Can the platform post a fifth consecutive gain? SMP's 5.3% jump will attract attention from international buyers weighing U.S. NDM against Oceanian SMP. Cheddar's 6.6% drop on Auction 411 will be tested against physical demand. 4. **Dairy-RP Q4 Sign-Up Deadline (September 15):** Producers have until this date to lock Dairy-RP coverage for Q4 2026. Given a softening milk price forecast and a September 11 WASDE that could move the needle, this deadline warrants immediate attention. 5. **HPAI H5N1 Fall Migration Season:** With migratory bird season beginning, APHIS and NMTS surveillance intensity will increase. Watch for any new detections, state status changes under NMTS, and updates to the interstate movement guidance issued in May 2026. 6. **USDA Cold Storage and Dairy Products Reports:** Monthly NASS data releases due in mid-September will provide critical context for cheese inventory levels against the backdrop of record export volumes and slowing domestic demand growth. --- *The Therio Dairy Newsdesk publishes weekly U.S. dairy industry coverage synthesizing USDA data releases, CME market activity, global auction results, policy developments, and industry news for producers, cooperatives, processors, and risk managers. For questions, corrections, or tips, contact the Therio editorial team.*