Dairy Industry News Roundup: Week of May 2 - 8, 2026

# Dairy Industry News Roundup: Week of May 2 - 8, 2026 The May 2-8, 2026 period covered critical developments across U.S. dairy markets, with USDA raising 2026 milk production to 235.4 billion pounds on expectations of a larger cow herd while the Global Dairy Trade price index increased 1.5% for the first time since March. USDA APHIS announced that lactating dairy cattle from 42 "unaffected" states no longer require H5N1 testing for interstate movement, and CME spot prices showed cheese blocks at $1.6225/lb and NDM at $2.2900/lb. --- --- ## 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. USDA Raises 2026 Milk Production Forecast to Record 235.4 Billion Pounds USDA's May WASDE report raised 2026 milk production to 235.4 billion pounds, up 3.7 billion pounds from 2025's total of 231.7 billion pounds. The increase reflects expectations of a larger cow herd but a slower growth rate in output per cow. Milk production for 2026 is projected at 235.3 billion pounds, 0.6 billion pounds higher than last month's projection, with the dairy herd projected to average 9.610 million head while milk per cow is forecast at 24,485 pounds. The U.S. dairy herd is stable, even though it is around 200-thousand more cows than a year ago, with production per cow also expected to rise. | Production Metrics | 2025 Actual | 2026 Forecast | Change | |-------------------|-------------|---------------|---------| | Total Production | 231.7B lbs | 235.4B lbs | +3.7B lbs | | Dairy Herd | 9.41M head | 9.61M head | +200K head | | Milk per Cow | 24,200 lbs | 24,485 lbs | +285 lbs | The updated forecast supports stronger expectations for dairy processing capacity utilization, with manufacturers running busy schedules to meet both domestic and export demand. ## 3. CME Dairy Markets Show Mixed Action in Early May CME spot dairy prices for the week of May 4-8 showed butter Grade AA closing at $1.6650/lb, cheese blocks at $1.6225/lb, barrels at $1.6000/lb, NDM Grade A at $2.2900/lb, and dry whey at $0.7000/lb. Weekly averages provided a clearer picture of market direction, with butter's weekly average at $1.6200/lb, down $0.0305 from the previous week, and cheese barrels averaging $1.6090/lb (down $0.0060) and blocks at $1.6350/lb. | Product | Closing Price | Weekly Average | Weekly Change | |---------|---------------|----------------|---------------| | Butter Grade AA | $1.6650/lb | $1.6200/lb | -$0.0305 | | Cheese Blocks | $1.6225/lb | $1.6350/lb | -- | | Cheese Barrels | $1.6000/lb | $1.6090/lb | -$0.0060 | | NDM Grade A | $2.2900/lb | -- | -- | | Dry Whey | $0.7000/lb | -- | -- | Market participants reported cheesemakers running busy schedules with barrel and block demand steady to improving, plus rising international interest, while spot loads of butter remained available with unchanged domestic demand but picking up export interest. ## 4. Global Dairy Trade Auction Extends 2026 Rally with 1.5% Gain The GDT price index increased 1.5% in the May 6 auction, marking the first increase since the second auction in March, with 167 participating bidders and 92 winning bidders. Price movements were mixed across commodities. Skim milk powder averaged $3,547/MT ($1.61/lb), up 3.0%, with Contract 1 at $3,578/MT (up 4.2%), Contract 2 at $3,538/MT (up 2.7%), Contract 3 at $3,529/MT (up 3.0%), and Contract 4 at $3,626/MT (up 3.1%). | Product | Average Price | Change | Key Contracts | |---------|---------------|--------|---------------| | Skim Milk Powder | $3,547/MT | +3.0% | All contracts positive | | Whole Milk Powder | -- | +1.0%* | Consolidating gains | | Cheddar | $4,611/MT | -3.6% | June -2.1%, July -5.9% | | Mozzarella | $4,010/MT | +4.7% | All contracts positive | | Butter | -- | +2.1%* | Extending uptrend | *From related auction coverage. Prices were higher for Mozzarella, skim milk powder, whole milk powder, anhydrous milkfat, lactose, and buttermilk powder; and lower for Cheddar and butter. ## 5. APHIS Eases H5N1 Testing Requirements for Unaffected States USDA APHIS announced that lactating dairy cattle moving interstate from states with "Unaffected State Status" under the National Milk Testing Strategy no longer require H5N1 testing prior to movement, with 42 states listed as unaffected as of May 1, 2026. The National Milk Testing Strategy facilitates comprehensive H5N1 surveillance of the US milk supply and dairy herds, providing a strategy to identify which states and herds are affected with H5N1, giving states a five-stage roadmap to demonstrate virus elimination. | HPAI Status Categories | Requirements | States | |----------------------|--------------|---------| | Unaffected State Status | No testing required | 42 states | | Affected States | Testing required | 8 states | | Transition States | Case-by-case basis | Variable | The updated guidance requires no testing for lactating dairy cattle originating from states with Unaffected State Status, where ongoing testing and surveillance activities confirm the absence of HPAI in the state's dairy herds. USDA remains committed to monitoring and mitigating HPAI spread in livestock, with this update not changing the eradication strategy, emphasizing that biosecurity remains key to mitigating disease risks, with enhanced biosecurity measures recommended for all dairy farms. ## 6. May Class Prices Reflect Mixed Commodity Signals The Base Class I Price was $20.15/cwt for May 2026, with the Base Skim Milk Price for Class I at $14.12/cwt, up $2.12 from the previous month. Market observers noted May Class IV futures closing at $22.29/cwt and May Class III futures at $17.56/cwt on April 24, reflecting favorable price directions. The pricing structure reflected underlying commodity strength in some sectors while showing pressure in others, consistent with the mixed signals from CME spot markets during the first week of May. ## 7. Dairy Production Reports Show March Strength March dairy production data showed butter production at 232 million pounds (1.2% above March 2025), American type cheese at 488 million pounds (2.3% below March 2025 but 7.4% above February 2026), and total cheese output at 1.26 billion pounds (1.2% above March 2025 and 8.1% above February 2026). NDM production totaled 175 million pounds (9.9% above March 2025 and 15.4% above February 2026), while dry whey production reached 78.7 million pounds (3.6% above March 2025 and 16.5% above February 2026). | Product | March 2026 | vs March 2025 | vs February 2026 | |---------|------------|---------------|------------------| | Butter | 232M lbs | +1.2% | +4.1% | | American Cheese | 488M lbs | -2.3% | +7.4% | | Total Cheese | 1.26B lbs | +1.2% | +8.1% | | NDM | 175M lbs | +9.9% | +15.4% | | Dry Whey | 78.7M lbs | +3.6% | +16.5% | ## 8. Regional Milk Markets Show Strong Production, Variable Demand Central region milk output remained strong, with Class III spot milk ranging from $7 under to flat Class, though most contacts reported offers closer to the top of the range. Spot availability for Class III milk varied, with some unable to find volumes even when offering above Class prices, while others purchased loads from nearby manufacturers at discounted prices, with light demand for spot milk overall. Market participants noted cheesemakers continuing to run busy production schedules in the region with steady demand for barrels, supporting the processing sector's ability to absorb available milk supplies. ## 9. Feed Cost Outlook Remains Critical for Margins The WASDE report projected the 2026-27 corn crop at 16 billion bushels, down 6% from a year ago on declines to both area and yield, with planted area of 95.3 million acres down 3.5 million acres and yield projection of 183 bushels per acre. The latest USDA Ag Prices report indicated dairy-quality alfalfa hay prices averaged $230/ton in March, while alfalfa hay averaged $166/ton, and other hay averaged $138/ton. Lower corn production forecasts could pressure feed costs later in 2026, potentially impacting dairy margins despite current favorable milk-to-feed ratios that market analysts noted remain workable for most operations. ## Quick Hits • Valley Milk launched regular and instant whole milk powder at the GDT auction, expanding from its current skim milk powder and anhydrous milkfat offerings • USDA data shows abundant milk production in the U.S., pressuring dairy prices and shaping market strategies, with butter and cheese manufacturing active due to plenty of cream and spot milk • FMMO uniform milk prices climbed $1.14/cwt in March to an average of $18.55/cwt across all 11 orders • The 2026 price forecasts for cheese, NDM, and whey are higher compared to April, but butter projections are lower, with Class III and Class IV prices both raised • Wisconsin has tested 9,461 raw milk samples for inter- and intrastate animal movement since April 2024, with zero positives, while beginning NMTS testing in May 2025 • USDA's Dairy Herd Status Program has 100 herds across 18 states enrolled, while several H5N1 vaccine candidates for dairy cows undergo field trials • Arla Foods and Germany's DMK Group announced merger plans in April 2025 to create Europe's largest dairy cooperative, signaling that scale is now essential for competing across multiple channels ## What to Watch Next Week Monitor USDA's May Milk Production report for updated cow numbers and output per animal. Track CME dairy futures as May contracts approach expiration and June becomes front-month. Watch for any additional GDT auction results and their impact on international price benchmarks. Follow developments in H5N1 testing protocols as more states potentially achieve unaffected status. Pay attention to weather forecasts affecting spring flush production and any updates on feed grain prices that could influence second-half margin projections. *The Therio Dairy Newsdesk provides comprehensive coverage of dairy markets, policy, and industry developments. Our analysis combines real-time market data with strategic insights to help dairy professionals navigate an increasingly complex global marketplace.*