Dairy Industry News Roundup: Week of June 13 - 19, 2026

# Dairy Industry News Roundup: Week of June 13 - 19, 2026 U.S. cheese blocks closed the week of June 13-19, 2026 at $1.4875 per pound on the CME spot market while barrels lagged at $1.4200, as the June WASDE's 236.4-billion-pound milk production forecast for 2026 weighed on Class III sentiment and USDA cut its all-milk price outlook by $0.55 to $20.70 per cwt. Meanwhile a fresh HPAI H5N1 confirmation in a Texas dairy herd earlier this month kept biosecurity costs elevated across the Southwest, and a resurging export profile for cheese, whey, and butter provided the only clear bright spot in an otherwise bearish week. --- --- ## 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. June WASDE: USDA Lifts 2026 Milk Production to 236.4 Billion Pounds, Cuts All-Milk Price to $20.70 The USDA's monthly World Agricultural Supply and Demand Estimates (WASDE) report was released June 11, 2026, just ahead of the trading week covered here, and its numbers dominated market conversation through June 19. USDA's June WASDE raised 2026 milk production to 236.4 billion pounds on expectations of a larger cow herd and an increase in milk output per cow. At 236.4 billion pounds, the 2026 milk production estimate was raised from last month's report and would be up 4.7 billion from 2025's total of 231.7 billion pounds. Production for 2027 was simultaneously lifted, with higher expected dairy cow inventories and higher expected milk-per-cow yields supporting a 2027 forecast of 237.0 billion pounds. The supply upgrade came at a price cost. All-milk prices were revised downward, with the all-milk price forecast for 2026 set at $20.70 per cwt, $0.55 lower than the previous estimate. Meanwhile, the all-milk price forecast for 2027 is projected at $20.90 per cwt, down $0.05. Cheese, nonfat dry milk (NDM), and whey prices for 2026 are lowered from the previous month's forecast on recent price declines, while the butter price is raised on stronger demand expected in the second half of the year. | Metric | May 2026 Forecast | June 2026 Forecast | Change | |---|---|---|---| | 2026 Milk Production | 235.4 billion lbs | 236.4 billion lbs | +1.0 billion lbs | | 2026 All-Milk Price | $21.25/cwt (est.) | $20.70/cwt | -$0.55/cwt | | 2027 Milk Production | Prior | 237.0 billion lbs | Higher | | 2027 All-Milk Price | $20.95/cwt (est.) | $20.90/cwt | -$0.05/cwt | The Class III price forecast is unchanged as lower cheese prices are offset by higher whey prices. The Class IV price forecast is unchanged due to no changes in the butter or NDM price outlook. Producers watching milk checks should note that the all-milk figure marks the lowest 2026 projection issued since February, signaling that the accumulated weight of strong cow numbers and per-cow productivity gains is now fully outpacing demand-side support. ## 3. CME Spot Dairy: Blocks Hold Near $1.49, Barrels Lag, Butter Battles Headwinds at $1.67 The CME spot session for the week of June 13-19 told a classic two-speed story: milkfat and cheese blocks held relatively firm while barrels continued to represent a discount, and NDM remained under sustained selling pressure. Cheese barrels closed at $1.4200 and 40-pound blocks at $1.4875 by the end of the prior reporting period, providing the baseline entering this week. The weekly average for barrels was $1.4540 and for blocks $1.4815, leaving the block-barrel spread at roughly $0.0275, a widening that signals buyer selectivity and potential processing shifts in the Midwest. Grade AA butter settled at $1.6675 per pound, with a weekly average of $1.6665, holding in a narrow channel as demand signals remained mixed. | Product | Weekly Close | Weekly Average | Block-Barrel Spread | |---|---|---|---| | 40-lb Blocks | $1.4875/lb | $1.4815/lb | +$0.0275 | | Cheese Barrels | $1.4200/lb | $1.4540/lb | (reference) | | Grade AA Butter | $1.6675/lb | $1.6665/lb | N/A | | NDM (Grade A) | Under pressure | Declining trend | N/A | Price forecasts for nonfat dry milk (NDM), cheese, and whey are lowered from the previous month due to recent price declines, a dynamic playing out in real time at the CME spot market. Traders noted that the block-barrel inversion risk is modest for now, but a sustained barrel rally would be needed to support Class III futures materially above current levels. The butter price forecast is raised on expectations of stronger demand in the second half of the year, which is providing a floor to CME butter activity even as cheese sentiment softens. ## 4. USDA ERS Livestock, Dairy, and Poultry Outlook: June 2026 Edition Confirms Bearish Price Revisions The USDA Economic Research Service published its Livestock, Dairy, and Poultry Outlook: June 2026 (Report No. LDP-M-384) during the coverage week, providing the detailed analytical backdrop for the WASDE revisions. The report underscored that ample milk supply is the dominant bearish force in the market. Milk production forecasts have been raised for both 2026 and 2027, based on the latest Milk Production report, which shows higher cow inventories and milk per cow for both years. On the trade side, the picture is more nuanced. For 2026, commercial export forecasts are increased on both a fat and skim-solids basis, driven by higher shipments of cheese, whey, and butter. However, for 2027, exports are raised on a fat basis due to higher butter shipments but lowered on a skim-solids basis due to less competitive dried skim milk products. The import picture offers little relief for domestic processors. Imports are unchanged on both bases for 2026. For 2027, skim-solids basis imports are reduced from last month, primarily due to lower whey product imports, while fat basis imports are unchanged. The net read from ERS is clear: the U.S. dairy complex is producing more milk, exporting more product, and still facing downward price pressure because supply growth is running ahead of both domestic consumption and export absorption capacity. ## 5. Feed Costs: Corn Holds at $4.40 Per Bushel, Soybeans Stable at $11.40, Margins Compressed The USDA's WASDE report provided insights into dairy feedstuff supplies and prices: the corn and soybean outlook published alongside the June 11 WASDE established the cost-of-production baseline that producers carried into the June 13-19 trading week. At $4.40 per bushel, the projected season-average corn price received by producers is unchanged from the previous report and up a quarter from the 2024-25 average of $4.15 per bushel. The 2026-27 U.S. soybean supply, use, and price projections are unchanged this month, with the season-average soybean price forecast unchanged at $11.40 per bushel, compared with $10.40 in 2025-26. | Feedstuff | 2024-25 Actual | 2025-26 Estimate | 2026-27 Forecast | Change from Prior Month | |---|---|---|---|---| | Corn | $4.15/bu | Transitional | $4.40/bu | Unchanged | | Soybeans | $10.40/bu | $10.40/bu | $11.40/bu | Unchanged | For a 1,000-cow dairy, holding corn at $4.40 per bushel against a milk check at $20.70 per cwt provides a narrower margin cushion than producers saw in the first quarter of 2026. The unchanged soybean meal outlook at elevated year-over-year levels continues to elevate ration costs, particularly in regions where alfalfa availability is still constrained by western heat. Producers with forward-contracted corn through Q3 are better insulated, but open-market buyers face a cost environment that has not meaningfully eased since spring planting season. ## 6. H5N1 / HPAI in Dairy Cattle: Texas Reinfection, NMTS Surveillance Active, Vaccine Trials Ongoing The HPAI H5N1 situation in U.S. dairy cattle remained an active management burden during the week of June 13-19, with fresh confirmation in Texas serving as the most acute regional development heading into the coverage period. This is the first confirmed case of HPAI 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 Laboratory. Texas had previously been declared clear. Texas is an active participant in the National Milk Testing Strategy (NMTS) and previously demonstrated elimination of the virus in Texas dairy herds, making this reemergence a setback for the state's biosecurity narrative. 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 rapid implementation of enhanced biosecurity measures to decrease transmission risk, and inform efforts to protect farmworkers. On the vaccine front, USDA APHIS continues to support the rapid development and timely approval of an H5N1 vaccine for dairy cows. Several vaccine candidates for use in dairy cows are currently undergoing field trials. Additionally, USDA currently has 100 herds across 18 states enrolled in its Secure Our Herds voluntary program. The economic toll of HPAI on individual herds remains significant, with clinical signs in dairy cattle including a decrease in feed consumption with a simultaneous decrease in rumination and rumen motility, and subsequent acute drops in milk production. | HPAI Metric | Status (Week of June 13-19, 2026) | |---|---| | States with confirmed dairy herd cases (cumulative) | 19 states (as of last APHIS update) | | NMTS surveillance | Active in all major dairy states | | Vaccine field trials | Ongoing, multiple candidates | | Herds in Secure Our Herds program | 100 herds, 18 states | | Texas status | New 2026 confirmation (June 2) | ## 7. USDA WASDE Flags New World Screwworm Threat to U.S. Livestock An unexpected complication appeared in the June 11 WASDE text that livestock and dairy producers need to track alongside HPAI. The USDA confirmed the discovery of New World screwworm (NWS) in a calf in Texas on June 3, 2026. Subsequently, additional cases were identified in livestock and pets within the United States. In response, USDA and local state officials implemented actions to contain and monitor the movement of the pest, including quarantines and movement controls of livestock in affected areas. Forecasts in the WASDE report reflect cases known and policies implemented at the time of publication. For dairy operators in Texas and neighboring states, the screwworm confirmation adds another biosecurity variable on top of HPAI management protocols. Movement restrictions associated with NWS containment could potentially complicate cattle transfer logistics, heifer sourcing, and interstate commerce for affected regions. Producers should consult with their state animal health officials and USDA APHIS for guidance on movement permits, as the situation was still developing through the coverage week. ## 8. May Consumer Price Index: Dairy Products Index Down 1.0%, Butter Retail Prices Off 8.0% Year-Over-Year Retail dairy demand data released in the coverage week painted a picture of the consumer headwinds facing the industry, with dairy deflation at the store shelf complicating the price recovery narrative. The May Consumer Price Index (CPI) for all food stood at 349.0, up 3.1 percent from 2025. Despite broader food inflation running above 3 percent, the dairy products index was 268.5, down 1.0 percent from a year ago. The divergence underscores that dairy is losing share of the consumer food dollar on a year-over-year price basis even as overall food costs rise. Year-over-year percentage changes for selected products in May were: fresh whole milk +4.1 percent, cheese -6.0 percent, and butter -8.0 percent. | Retail Product | May 2026 YoY Change | |---|---| | Fresh Whole Milk | +4.1% | | Cheese | -6.0% | | Butter | -8.0% | | Dairy Products Index | -1.0% | | All Food CPI | +3.1% | The 6.0-percent year-over-year decline in retail cheese prices and the 8.0-percent drop in retail butter prices are noteworthy given that CME spot butter is still trading above $1.65 per pound. The retail-to-farm price transmission suggests that retail margins on butter are being compressed by store-level competition, and that cheese deflation at shelf is contributing to the softer Class III futures environment. Domestic demand stimulus programs, if pursued by cooperatives or retailers ahead of summer grilling season, could provide a near-term stabilizer. ## 9. U.S. Dairy Export Outlook: Cheese, Whey, and Butter Shipments Elevated; NDM Faces Competitiveness Pressure Export activity remains one of the clearest bullish counterweights in the current market, with the June WASDE data confirming an upward revision to commercial export forecasts. For 2026, commercial export forecasts are increased on both a fat and skim-solids basis, driven by higher shipments of cheese, whey, and butter. This upgrade reflects real-time trade data showing strong placement of U.S. product into global markets even as domestic prices soften. However, the outlook is not uniformly positive. For 2027, exports are raised on a fat basis due to higher butter shipments but lowered on a skim-solids basis due to less competitive dried skim milk products. The NDM competitiveness issue is a structural concern. Spot prices for NDM at the Chicago Mercantile Exchange (CME) decreased during June, and the USDA's National Dairy Products Sales Report data confirmed that downward trajectory. U.S. NDM production has surged: according to USDA NASS, NDM production in May 2026 was 10.3 percent higher year over year. NDM stocks at the end of May 2026 were 3.9 percent below ending stocks for May 2025, indicating that the production surge is being partially absorbed by export demand but not fast enough to prevent price deterioration. The changes in prices are likely due to ample global milk supply as well as a growing demand for dairy protein. For U.S. exporters, maintaining NDM competitiveness against New Zealand and EU origins will require either a weaker dollar, further domestic price declines, or a demand acceleration from key importing markets. ## 10. Global Dairy Trade Context: GDT Price Index and International Backdrop The global dairy trade environment heading into the June 13-19 week was framed by a backdrop of broader international auction dynamics that had evolved over the preceding months. Global dairy commodity markets had entered 2026 with renewed momentum, as earlier GDT auctions delivered notable increases in the overall price index. The lift reflected strengthening demand across key product categories, reinforcing signals that international dairy prices were stabilizing after prior volatility. However, by mid-year, that momentum had become more selective. While earlier GDT auctions signaled renewed firmness in global dairy markets, mixed performances across product categories suggest that market conditions remain dynamic. Market analysts note that shifts in Chinese purchasing activity continue to shape outcomes in the international dairy market. As one of the world's largest dairy importers, China's participation can significantly sway auction results and broader dairy price trends. For U.S. exporters, the relevant takeaway is that global WMP and butter demand has been more resilient than powder-specific NDM or SMP demand in the near-term import tenders. The improvement in milk powder prices may provide some support for global milk price expectations, particularly as processors continue to monitor supply-demand balances heading into the second half of 2026. ## 11. Herd Dynamics and Beef-on-Dairy Trend: Slaughter Data Signals Herd Expansion Caution The U.S. milk cow herd usually responds to changes in prices and feed costs with a lag of several months. The length of the lag is also affected by factors other than feed costs, such as the availability of dairy replacement heifers, particularly with the sustained trend of beef-on-dairy practices. This structural shift is one of the most consequential medium-term dynamics in U.S. dairy genetics and herd management. Additionally, federally inspected dairy cow slaughter during the first 5 months of 2026 totaled 1.13 million head, a pace that, if sustained, represents a notable cull rate. Higher cull cow values driven by elevated beef cattle prices are incentivizing some producers to accelerate herd culling, which paradoxically could tighten milk supply in 2027 even as the June WASDE shows expanding cow numbers. The beef-on-dairy crossbreeding trend continues to consume a meaningful share of dairy genetics resources, particularly in Holstein-heavy operations. Industry geneticists note that the shift reduces the number of pure dairy heifer calves entering the replacement pipeline, which could constrain herd expansion beyond 2026 if milk prices recover and producers seek to add cows. Producers and cooperatives planning capital investments should factor the replacement heifer availability constraint into 5-year capacity models. ## 12. May Dairy Products Report (NASS): Butter Up 3.5% YoY, American Cheese Down 2.6% The USDA NASS May Dairy Products report, released in the coverage week or immediately adjacent to it, provided the most current snapshot of U.S. manufacturing output and set the context for inventory and pricing discussions. Butter production reached 224 million pounds in May, 3.5 percent above May 2025 but slightly below April 2026. American-type cheese production totaled 499 million pounds, 2.6 percent below the prior year but 1.5 percent above the previous month. Total cheese output, excluding cottage cheese, was 1.28 billion pounds, up 2.0 percent year-over-year and 1.1 percent from April. On the powder side, the production story is expansionary. Nonfat dry milk production for human food was 173 million pounds, 10.3 percent above May 2025 but 3.8 percent below April. Dry whey production for human food totaled 82.6 million pounds, 12.2 percent above the prior year and 7.4 percent above the prior month. | Product | May 2026 Production | YoY Change | MoM Change | |---|---|---|---| | Butter | 224 million lbs | +3.5% | Slightly lower | | American Cheese | 499 million lbs | -2.6% | +1.5% | | Total Cheese (ex. cottage) | 1.28 billion lbs | +2.0% | +1.1% | | NDM (human food) | 173 million lbs | +10.3% | -3.8% | | Dry Whey (human food) | 82.6 million lbs | +12.2% | +7.4% | Regular hard ice cream production was 69.2 million gallons, 7.1 percent above May 2025 and 4.0 percent above April, a seasonal signal that fluid and frozen product demand is absorbing some of the butterfat surplus heading into summer. The 12.2-percent year-over-year surge in dry whey production is particularly significant for Class III pricing, as whey returns contribute meaningfully to the Class III formula. --- ## Quick Hits - The May CPI for all food stood at 349.0, up 3.1 percent from 2025, while the dairy products index was 268.5, down 1.0 percent from a year ago, highlighting the divergence between broad food inflation and dairy deflation at retail. - Since April 2024, 9,461 raw milk samples have been tested for inter- and intrastate animal movement under HPAI protocols. Of those, there have been zero positives, a reassuring result for milk safety confidence. - USDA confirmed discovery of New World screwworm in a calf in Texas on June 3, 2026, with additional cases subsequently identified in livestock and pets, adding a new animal health layer for Southwest dairy operators. - Regular hard ice cream production in May was 69.2 million gallons, 7.1 percent above May 2025, signaling that summer frozen dairy demand is off to a solid seasonal start. - USDA NASS data confirmed NDM production in May 2026 was 10.3 percent higher year over year, keeping skim-solids markets well supplied and NDM prices under downward pressure through the coverage week. - USDA APHIS currently has 100 herds across 18 states enrolled in the Secure Our Herds voluntary HPAI monitoring program, the widest enrollment since the program launched. - The projected season-average corn price of $4.40 per bushel is unchanged from the previous WASDE report but remains $0.25 above the 2024-25 average, keeping ration costs elevated relative to recent history. --- ## What to Watch Next Week - **CME Block-Barrel Spread:** The $0.0275 spread entering the week warrants daily monitoring. A further barrel rally or block pullback will determine whether the block-barrel dynamic flips and what that signals for Class III milk price direction heading into the July announcement. - **HPAI / NMTS Updates:** With Texas recording a fresh 2026 herd confirmation in early June and USDA APHIS field trials for the H5N1 dairy cattle vaccine ongoing, any new state confirmations or trial data releases will be the week's most market-sensitive animal health news. - **New World Screwworm Containment:** Producers in Texas and neighboring states should watch for USDA APHIS updates on NWS quarantine zones and movement permit protocols, as expansion of restrictions could affect cattle logistics and heifer sourcing across the Southern Plains. - **Cold Storage Report:** USDA NASS is expected to release Cold Storage data reflecting end-of-May inventories. Butter and cheese stock levels will either validate or challenge the current CME spot price structure. - **U.S. Dairy Export Data:** Weekly export inspection data from USDA AMS will confirm whether the elevated cheese, whey, and butter shipment pace noted in the June WASDE is holding into mid-June or beginning to ease. - **GDT Auction (late June):** The next scheduled Global Dairy Trade auction will provide a real-time read on whether mid-2026 international demand is strengthening or fading for WMP, SMP, and butter, with direct implications for U.S. NDM and butter export competitiveness. - **Feed Market Reaction to Crop Conditions:** With the U.S. corn crop under weather-adjusted trend yield assumptions of 183 bushels per acre as of the June WASDE, any NOAA outlook updates or USDA crop condition downgrades could reprice corn and cascade into dairy margin models. --- *The Therio Dairy Newsdesk covers U.S. and global dairy markets weekly, synthesizing USDA reports, CME spot and futures activity, HPAI developments, trade data, and industry news for farm operators, cooperatives, processors, and market participants. For questions, submissions, or subscription inquiries, contact the Therio editorial team.*