Dairy Industry News Roundup: Week of July 11 - 17, 2026

# Dairy Industry News Roundup: Week of July 11 - 17, 2026 The July 11-17, 2026 week handed U.S. dairy markets a supply-side gut check: USDA's July WASDE locked in a 236.6-billion-pound milk production forecast for 2026, up 4.9 billion from 2025, while the all-milk price projection was slashed to $20.00/cwt, Class III was pulled down to $16.15/cwt, and the just-concluded July 7 Global Dairy Trade (GDT) event sent benchmark prices sharply lower, with the GDT Index tumbling 4.9 percent to $3,793 per metric ton and Cheddar cratering 12.3 percent. On the CME spot floor, butter averaged near $1.66/lb through the week per the USDA National Dairy Products Sales Report, dry whey firmed on protein demand, and cold storage data showed butter stocks climbing 8 percent while cheese inventories edged lower. Heat stress gripped Idaho, Pennsylvania, and parts of the Central region, complicating the mid-summer output picture and setting up a tighter feed-cost conversation heading into August. --- --- ## 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. July WASDE: Milk Output Raised Again, Three Price Forecasts Cut USDA's July WASDE raised the 2026 milk production forecast slightly to 236.6 billion pounds on expectations of a larger cow herd and a decrease in milk output per cow. The report, released July 10, carried clear bearish price signals that rippled through Class pricing and futures markets for the remainder of the week. At 236.6 billion pounds, the 2026 milk production estimate was raised from last month's report and would be up 4.9 billion from 2025's total of 231.7 billion pounds. Higher milk supply is forecast to be higher for 2026 and 2027, mainly due to projected herd expansion resulting from low slaughter rates, adequate milk margins above feed costs, and expected longer cow retention. For 2026, USDA lowered price forecasts for nonfat dry milk (NDM), cheese, and butter due to continuing strong growth in milk supply. The whey price forecast was left unchanged from the prior month. As a result, the Class III milk price forecast was lowered to $16.15/cwt and the Class IV price was also lowered to $18.40/cwt. Higher milk supply is expected to lower milk prices overall. The all-milk price for 2026 is now projected at $20.00/cwt, 70 cents below the previous forecast, while for 2027 it is forecast at $19.85/cwt, $1.05 below the previous projection. | Metric | July WASDE | Prior Month | Change | |---|---|---|---| | 2026 Milk Production (bil. lbs.) | 236.6 | 236.4 | +0.2 | | 2027 Milk Production (bil. lbs.) | 238.1 | -- | -- | | Class III Price ($/cwt) | 16.15 | Prior higher | Lowered | | Class IV Price ($/cwt) | 18.40 | Prior higher | Lowered | | All-Milk Price ($/cwt) | 20.00 | 20.70 | -0.70 | --- ## 3. CME Spot Markets: Cheese Firms, Butter Softens, Dry Whey Catches a Bid USDA Dairy Market News for July 13-17, 2026, reported mixed CME prices: butter down, cheese up, dry whey higher. The week's action reflected the ongoing tension between a well-supplied cheese market beginning to find light speculative interest and a butter complex that had been running rich relative to global comparables. Butter prices received for 25-kilogram and 68-pound boxes meeting USDA Grade AA standards averaged $1.66/lb for the week ending July 11, 2026. Cheddar cheese in 40-pound blocks averaged $1.50/lb for that same reporting period. The Monday, July 7 session provided the week's entry context: 40-pound cheese blocks opened at $1.4475/lb with one sale recorded at $1.45, while cheese barrels were at $1.4850/lb. Butter was at $1.65/lb with four sales ranging from $1.6350 to $1.6450, and NDM was at $1.50/lb with twelve sales ranging from $1.50 to $1.5050. Dry whey prices in the East moved higher through the week, supported by reported trading activity and aligning with CME trades. Manufacturers continued to prioritize whey protein concentrate 80% and whey protein isolate production due to active demand from sports nutrition and protein-enhanced food formulations. In the West, low/medium heat NDM prices moved lower at both ends of the range and mostly price series. Dry buttermilk prices in the West moved higher at both ends of the range and mostly price series. | CME Commodity | Week Close (approx.) | Direction | Notable Driver | |---|---|---|---| | Cheese Blocks (40-lb) | ~$1.50/lb | Higher | Light speculative buy, export demand | | Cheese Barrels | ~$1.4850/lb | Mixed | Supply-side pressure | | Grade AA Butter | ~$1.66/lb | Lower | Global price weakness | | NDM | ~$1.50/lb | Lower | West prices slide | | Dry Whey | Higher w-o-w | Higher | Protein demand, WPC80 shift | --- ## 4. USDA Cold Storage: Butter Stocks Surge 8 Percent, Cheese Declines Cold storage data released during the July 11-17 window reinforced the divergent fat-versus-protein narrative that has defined the 2026 dairy year. As of July 1, 2026, butter stocks totaled 68,992 pounds, an increase of 5,317 pounds or 8 percent from the July 13 reference date. Cheese inventories stood at 84,726 pounds, a decrease of 199 pounds from the earlier date. The prior reference point offers useful context: cold storage data as of June 29, 2026, had shown butter inventories at 67,021 pounds, up 3,400 pounds from June 1, while cheese stocks stood at 84,702 pounds, a decline of 1,223 pounds from the start of the month. The 8-percent butter stock build in a single reporting period is a significant seasonal accumulation. Domestic manufacturing margins have incentivized churning of cream that might otherwise move into Class II products, and the wide premium of EU butter over U.S. butter is creating limited import competition. Lower supplies and lack of competitiveness against U.S. butter is likely to dampen EU export opportunities in 2026. As of late 2025, EU butter quotes were nearly 80 percent higher than the United States. That spread, still meaningful in mid-July 2026, should in theory channel more export business toward U.S. butter, though logistical lead times mean near-term physical stocks will remain elevated. | Cold Storage Metric | July 1, 2026 | June 29, 2026 | Change | |---|---|---|---| | Butter (lbs.) | 68,992 | 67,021 | +1,971 (+2.9%) | | Cheese (lbs.) | 84,726 | 84,702 | +24 (+0.03%) | --- ## 5. GDT July 7 Auction: Index Falls 4.9 Percent, Cheddar Craters 12.3 Percent The Global Dairy Trade (GDT) event that closed on July 7 was the most bearish result of the year to date and set the tone for CME futures positioning heading into the week of July 11-17. Compared to the previous trading event, the GDT Index fell 4.9 percent to $3,793/MT. Most products experienced decreases from the June 16 to the July 7 auction. Cheddar plummeted 12.3 percent from the prior event, settling at $3,900/MT. Skim and whole milk powder fell 7.0 and 4.4 percent, respectively, over the same timeframe. Butter decreased 5.0 percent from the last trading event to $5,336/MT. Anhydrous milkfat dropped 3.9 percent from the prior trading event. Volume data provided additional context: the volume traded had been on a downward trend to 12,922 tonnes as of June 16, 2026, before rising back to 26,316 tonnes as of the July 7 event. The volume recovery alongside sharply lower prices is a textbook buyer's-market signal, suggesting importers waited for price concessions before re-entering the market in size. Prices across butter, WMP, SMP, and the all-products average showed a falling trend as of July 7, 2026. A GDT Pulse auction was also conducted during the July 11-17 window, with HighGround Dairy noting results were available for subscribers, though individual commodity outcomes were not publicly disclosed in detail. | GDT July 7 Product | Price ($/MT) | Change vs. June 16 | |---|---|---| | GDT Index (All Products) | $3,793 | -4.9% | | Cheddar | $3,900 | -12.3% | | Whole Milk Powder | Down 4.4% | -4.4% | | Skim Milk Powder | Down 7.0% | -7.0% | | Butter | $5,336 | -5.0% | | Anhydrous Milkfat | Down 3.9% | -3.9% | --- ## 6. July WASDE Feed Cost Update: Corn Steady, Soybeans Ample, Alfalfa Near $247/ton Feed costs remained a relatively supportive factor for dairy margins in mid-July, with USDA's WASDE maintaining a $4.40/bushel projected season-average corn price. The July WASDE 2026-27 U.S. corn outlook called for smaller supplies, greater exports, and reduced ending stocks. Corn production for 2026-27 was up fractionally based on updated planted and harvested area from the June 30 Acreage report. Yield was unchanged at 183 bushels per acre. Total use was raised 50 million bushels on an increase in exports, and the projected season-average corn price received by producers remained at $4.40/bushel. On the soybean side, soybean production was projected at 4.475 billion bushels, up 40 million on higher harvested area. Harvested area, projected at 84.4 million acres, was up 0.7 million from last month. The soybean yield forecast was unchanged at 53 bushels per acre. The 2026-27 U.S. season-average soybean price forecast was unchanged at $11.40/bushel. Soybean meal price remained at $310/short ton, and soybean oil price remained at 70 cents/pound. Alfalfa hay, the key swing-cost variable for western operations, remains elevated. The latest USDA Ag Prices report indicated dairy-quality alfalfa hay prices averaged $247/ton in May, while alfalfa hay prices averaged $195/ton, and prices for other hay averaged $142/ton. | Feed Input | Current Price | Key Notes | |---|---|---| | Corn (season avg.) | $4.40/bu | Unchanged; exports lifted total use | | Soybean Meal | $310/short ton | Unchanged | | Soybeans | $11.40/bu | Higher production, flat price | | Dairy Alfalfa (May) | $247/ton | Elevated; heat risk to crop | | Other Alfalfa (May) | $195/ton | Moderate | --- ## 7. Heat Stress Hits Idaho, Pennsylvania, and Central Dairying Zones Summer heat emerged as a near-term production wildcard during the week of July 11-17, with multiple regions reporting cow comfort issues that threatened to erode component quality and daily milk weights. Parts of the eastern dairy region, particularly Pennsylvania, were experiencing an abnormally high heat wave that created uncertainty in short-term output. Idaho recorded its hottest weekend of 2026, which processors said was affecting cow comfort, milk production, and milk components. California milk production changes were mixed for week 29 of 2026. The Pacific Northwest told a split story: according to the latest NASS milk production report, Oregon's milk cow numbers increased and Washington's decreased in May 2026 compared to the same month last year, with Oregon showing a 7.1 percent milk production increase. In the Central region, cream production was steady, though high temperatures were expected to negatively impact milk components in the coming weeks. Milk production in the Central region was declining due to heat affecting cow comfort. Class III spot milk prices told the market story plainly: Class III spot milk prices for the week ranged from $2.00 under to $5.00 over Class, an unusually wide spread reflecting the geographic patchwork of heat-stressed versus comfortable milking conditions. --- ## 8. FMMO Class I Pricing: July Advanced Base at $21.33/cwt After Four-Month Run Ends The Federal Milk Marketing Order (FMMO) advanced Class I base price for July retreated from its recent run, resetting the farm-level blended-price conversation for producers across all orders. After four consecutive months of the advanced Class I base price climbing, July's price showed some retreat at $21.33/cwt. That reading compares against a Dairy Margin Coverage (DMC) program backdrop that has kept margins above the top Tier I coverage threshold. The USDA NASS Agricultural Prices report released June 29 established May's DMC program calculations. As the all-milk price rose 50 cents, the total feed costs rose 42 cents, boosting the DMC margin 8 cents to $10.62/cwt for the month. Milk production across the U.S. has been rampant in 2026 with both processing capacity and global demand pressuring dairy farms to produce more, and a larger national dairy herd is helping keep the pace. Despite all the dynamics working in favor for U.S. dairy farmers, milk margins remain tight and risk management strategies remain critical. The July WASDE's revised Class III forecast of $16.15/cwt represents a meaningful decline from the strong Class III readings of late 2025 and early 2026, and it sets a cautious baseline for Dairy Revenue Protection (Dairy-RP) endorsement conversations heading into Q3 and Q4 2026 coverage windows. --- ## 9. H5N1 / HPAI in Dairy Cattle: NMTS Surveillance Active, Texas Detection on Record HPAI H5N1 surveillance remained a persistent background concern for the U.S. dairy sector during the July 11-17 window, with USDA APHIS and state partners continuing National Milk Testing Strategy (NMTS) monitoring and interstate movement testing protocols. In partnership with state veterinarians, USDA APHIS is implementing a National Milk Testing Strategy that facilitates comprehensive H5N1 surveillance of the nation's milk supply and dairy herds. The strategy is designed to increase understanding of the virus's spread, support the rapid implementation of enhanced biosecurity measures to decrease the risk of transmission to other livestock, and inform efforts to protect farmworkers. A recent confirmed case of HPAI in a Texas dairy herd was the first confirmed case in Texas dairy cattle this year. Following observed clinical signs including sick cows and milk production drops, samples were submitted to the Texas A&M Veterinary Medical Diagnostic Laboratory and confirmed at the National Veterinary Services Laboratories. Texas is an active participant in the NMTS and had previously demonstrated elimination of the virus in Texas dairy herds. Since April 2024, there have been 9,461 raw milk samples tested for inter- and intrastate animal movement. Of those, there have been zero positives. Wisconsin, which began testing milk samples from milk quality laboratories for HPAI in accordance with the federal USDA NMTS in May 2025, tests bulk tank milk samples submitted to quality laboratories from Grade A dairies on a monthly basis. The USDA recommends that dairy producers segregate clinically ill cows from the rest of the milking herd if a herd becomes infected with H5N1. The FDA recommends dairy processors not use milk from infected cows in the production of raw milk products and reminds manufacturers that heat treating or pasteurization are both effective measures that inactivate H5N1. --- ## 10. Global Supply Picture: U.S. Cheese Exports Gaining Share as EU Competition Fades The international dairy trade landscape continues to shift in favor of U.S. exporters, particularly in cheese, as the structural cost advantage of the U.S. milk pool deepens. U.S. cheese production is forecast 3 percent higher in 2026, driven by higher milk availability and growth in manufacturing capacity. Investments in new cheese plants in key dairy states including Wisconsin, Kansas, Texas, Minnesota, and Idaho continue to fuel production growth, and lower prices will drive higher consumption and exports in 2026. Exports of U.S. cheese are forecast to reach over 620,000 tons in 2026, bolstered by higher supplies and strong price competitiveness. Lower U.S. prices relative to competitors will boost demand for food service use, especially in Asia and Western Hemisphere markets. On the global supply side, Oceania is adding volume at a meaningful pace. Australia's May 2026 milk production was 654.0 million liters, up 33.7 million liters or 5.4 percent year-over-year. A forecasting group in Australia raised its opening milk price for the 2026/2027 season by 15 cents/kgMS to a range of $8.80 to $9.60/kgMS. New Zealand's May 2026 milk output was 1.02 million metric tons, up 3.6 percent year-over-year, with milk solids rising 5.0 percent to 108.7 million kg. Milk production by major dairy product exporters is forecast 0.4 percent higher in 2026 as growth in the United States, Australia, and Argentina offsets slight reductions for the European Union and New Zealand. The EU's ongoing structural disadvantage is particularly visible in butter: European Union butter production is forecast to decline 1 percent in 2026 on lower available milk supplies and dairy processor prioritization of higher-margin products like cheese. EU butter exports are expected to decline significantly to 225,000 tons, a 15-percent decline from 2025. --- ## 11. DMC Program and Herd Dynamics: Culling Slows, Cow Numbers Climb USDA herd data underpinning the July WASDE projection showed a consistently expanding dairy cow inventory that is the fundamental driver of 2026's production surplus. Milk production forecasts were raised for both 2026 and 2027. Based on the latest Milk Production report, cow inventories were also raised for both 2026 and 2027. Milk output per cow is reduced slightly for 2026 but unchanged for 2027. May U.S. milk production increased from April and was also up 2.3 percent from USDA's estimates a year earlier. Based on the latest USDA monthly Livestock Slaughter data, the number of dairy cull cows marketed through U.S. slaughter plants in May 2026 was estimated at 191,700. The One Big Beautiful Bill Act, signed earlier in 2026, reauthorized DMC for calendar years 2026 through 2031 and strengthened program parameters. Dairies have the option to lock in coverage levels for six years (2026-2031) with premium fees discounted by 25 percent. DMC offers different levels of coverage, including an option that is free to producers minus a $100 administrative fee. To determine the appropriate level of DMC coverage, producers can use the online dairy decision tool. | Herd/Margin Metric | Value | Source | |---|---|---| | 2026 Milk Production Forecast | 236.6 bil. lbs. | USDA WASDE July 2026 | | May Dairy Cull Cows | 191,700 head | USDA Livestock Slaughter | | May DMC Margin | $10.62/cwt | USDA NASS | | July Advanced Class I Base | $21.33/cwt | FMMO | | Class III Forecast (2026 avg.) | $16.15/cwt | USDA WASDE July 2026 | | Class IV Forecast (2026 avg.) | $18.40/cwt | USDA WASDE July 2026 | --- ## 12. Dairy Products Manufacturing: Whey Protein Concentration Prioritized, NDM Slips The manufacturing floor story for the week of July 11-17 centered on product-mix decisions by processors caught between weakening NDM realizations and strong demand for specialty whey fractions. Dry whey prices in the East moved higher, supported by reported trading activity and aligning with CME trades. Manufacturers continued to prioritize whey protein concentrate 80% and whey protein isolate production due to active demand from sports nutrition and protein-enhanced food formulations. In the West, low/medium heat NDM prices moved lower at both ends of the range and mostly price series. That softness aligns with the WASDE's downward revision to the NDM price forecast for the full-year 2026, reflecting the weight of an expanded U.S. milk pool pressing on skim-solids products. The GDT's 7.0-percent drop in SMP on July 7 reinforced that the global reference price for skim-solid equivalents is moving in the same direction. The East reported steady cheese production supported by adequate milk supplies, providing a floor for processor capacity utilization even as spot cheese prices remained historically modest. The dry whole milk market remained steady through the week. --- ## Quick Hits - Prairie Farms Family of Companies honored America's 250th anniversary with a donation of 250,000 servings of milk, highlighting cooperative community engagement efforts in mid-2026. - Butter inventories showed 80-percent butterfat loads readily available across all regions, while 82-percent stocks remained snug. Bulk butter overages ranged from 3 cents below to 5 cents above market. - Oregon's milk cow numbers increased in May 2026 compared to the same month last year, with Oregon showing a 7.1-percent milk production increase year-over-year. - Adjustments to dairy export and domestic use forecasts were mixed for 2026 but higher for 2027, reflecting a higher milk supply expected to meet both domestic and international demands. - USDA APHIS NVSL had earlier this year confirmed an HPAI H5N1 clade 2.3.4.4b genotype D1.1 detection in dairy cattle in Arizona, a result of state tracing and investigation following an initial detection on silo testing under the NMTS. - Global Dairy Trade announced that Valley Queen will be joining GDT Events, offering Lactose on the platform, expanding the product suite available to global buyers. - USDA ERS research shows that U.S. adoption of precision dairy technologies related to milking, breeding, and data systems has increased steadily since 2000, including sensors, data analytics, and automation that help operators manage at the cow level rather than herd level. --- ## What to Watch Next Week 1. **USDA NASS Milk Production Report (July 22):** The June data release will be the most consequential government report of the coming week, confirming whether the cow inventory gains implied in the WASDE translate to realized output. Any surprise in June milk per cow could swing Class III futures by 30-50 cents. 2. **CME Spot Market Direction:** Watch whether the cheese block market can hold the $1.50/lb level established mid-week. A close above $1.52 would signal genuine demand absorption; a slide below $1.45 would confirm the supply narrative and accelerate Class III futures pressure. 3. **GDT Pulse Mid-Month Auction:** The next GDT Pulse event is expected in late July. Given the 4.9-percent drop at the July 7 main event, watch SMP and WMP for any stabilization signal from Asian buyers. 4. **HPAI NMTS Surveillance Results:** USDA APHIS is expected to post updated bulk-tank silo test results across participating states. Any new detections in previously cleared states will draw immediate market attention. 5. **Feed Market:** A USDA Crop Progress report and Pro Farmer crop tour preparations will dominate the feed-cost conversation. Corn and soybean crop ratings in the critical pollination and pod-fill stages will be closely watched given the heat stress already hitting cattle-producing regions. 6. **Idaho and Central Region Milk Recoveries:** Processors with Class III exposure in Idaho and the Central region will be monitoring whether cow milk weights recover following the extreme heat weekend. A two-to-four-week lag in butterfat recovery is typical post-heat-stress event. 7. **Export Data:** USDA FAS weekly export inspections and any updated attachments from key U.S. cheese and NDM destinations (Mexico, South Korea, Japan) will provide a timely read on whether lower prices are translating into volume gains. --- *The Therio Dairy Newsdesk publishes weekly U.S. and global dairy industry coverage for producers, cooperatives, processors, and market participants. Therio integrates market intelligence, genetics, and herd management tools to support data-driven decisions at the farm and enterprise level. For questions, submissions, or subscription information, contact the Therio editorial team.*