Dairy Industry News Roundup: Week of May 23 - 29, 2026

# Dairy Industry News Roundup: Week of May 23 - 29, 2026 Cheese barrels closed at $1.4800 and blocks at $1.5050 on the CME week ended May 22, while the Class I base price jumped to $22.18 per cwt for June 2026, up $2.03 from May. U.S. milk output continues up significantly year-over-year as warmer temperatures reduce cow comfort in some regions. --- --- ## 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 Dairy Complex Hits Multi-Year Lows as Supply Pressures Mount CME cheese barrels closed Friday May 22 at $1.4800 per pound, down 7.6 cents from the prior week, while 40-pound blocks finished at $1.5050. Grade AA butter closed the week at $1.5350 per pound, with a weekly average of $1.5700, down 6.85 cents. Block Cheddar fell to $1.2825 per pound Monday, the lowest CME price since May 5, 2020, when it was at $1.2575. The spot market showed significant weakness as cheese production gains overwhelm a tepid consumer marketplace. | Product | Week Ending 5/22/26 | Weekly Change | Year Ago | |---------|---------------------|---------------|----------| | Cheese Barrels | $1.4800 | -$0.0760 | +$0.11 above | | Cheese Blocks | $1.5050 | -$0.0225 | -$0.155 below | | Butter Grade AA | $1.5350 | -$0.0685 | NA | | NDM Grade A | $2.0725 | NA | NA | Extra grade dry whey closed at $0.6800 per pound, while nonfat dry milk Grade A closed at $2.0725. ## 3. Class I Base Price Surges $2.03 to $22.18 Per Cwt in June The Class I base price for June 2026 reached $22.18 per cwt, an increase of $2.03 per cwt compared to May 2026. The Class I Extended Shelf Life (ESL) adjustment was negative $1.51 per hundredweight for June. May's advanced Class I base price reached $20.15 per cwt, up $1.49 from April and up $1.78 from May 2025. The rapid price acceleration reflects strong market conditions in Class IV, as nonfat dry milk prices rally to record levels. Federal Milk Marketing Order price dynamics continue showing volatility. Market data as of February 11 showed the 12-month average price for Class III at $17.16 per cwt versus Class IV at $17.28 per cwt, with FMMO reforms resulting in a 68-cent decrease in Class I prices relative to the previous system. ## 4. U.S. Milk Production Forecast Raised to 234.3 Billion Pounds for 2026 USDA raised its 2026 milk production estimate to 234.3 billion pounds and marketings to 233.3 billion pounds, up 200 million pounds on production and 100 million on marketings from a month ago. If realized, production would be up 3.2 billion pounds or 1.4% from 2025. May 2026 milk production is up slightly compared to last month, with output continuing significantly above year-ago levels, though manufacturers note milk intakes are above expectations but manageable. Regional production patterns show variability. California milk production varies from steady to lighter for week 21, though Central Valley processors describe milk volumes as balanced despite spot loads remaining available. Pacific Northwest milk production is steady, though some stakeholders indicate volumes are somewhat tight. | Region | Production Status | Notes | |--------|------------------|-------| | California | Steady to lighter | Warmer temps affecting cow comfort | | Arizona/New Mexico | Steady to lighter | Some spot milk purchases | | Pacific Northwest | Steady | Volumes somewhat tight | | Mountain States | Steady | Plenty of milk available | ## 5. H5N1 Surveillance Expands with National Milk Testing Strategy Progress USDA's National Milk Testing Strategy facilitates comprehensive H5N1 surveillance of the nation's milk supply, designed to increase understanding of virus spread and support rapid biosecurity implementation. The voluntary Dairy Herd Status Program offers producers weekly bulk milk testing before interstate movement, with 100 herds across 18 states enrolled. USDA APHIS confirmed H5N1 clade 2.3.4.4b, genotype D1.1 in Arizona dairy cattle following NMTS silo testing. Whole genome sequencing indicates this represents the third separate wild-bird introduction of HPAI to dairy cattle, potentially indicating increased risk through wild bird exposure. Most U.S. dairy herd detections resulted from movements linked to the original Texas Panhandle spillover involving B3.13 strain, though early 2025 saw two spillover events in Nevada and Arizona herds detected through NMTS. Since April 2024, 9,461 raw milk samples have been tested for inter- and intrastate movement with zero positives. ## 6. Global Dairy Trade Shows Mixed Signals Amid Supply Concerns Global milk powder export availability remains limited by key suppliers, with Argentina and Uruguay spot offerings scarce as exporters report being sold out through August, with available volumes in the $4,050-4,100/MT FOB range. New Zealand milk collections surged in April to 160.5 million kgMS, up 6.9% year-over-year and 4.2% above the previous April record, sitting 5.9% over the five-year average. Higher cow numbers and improved productivity, combined with robust pasture conditions, contributed to the growth. Global major dairy exporter milk production is forecast 0.4% higher in 2026, with U.S. production forecast 1.2% higher as dairy farmers increase herds to supply growing processing capacity. ## 7. USDA Dairy Products Report Shows Strong Manufacturing Activity December 2025 cheese output (excluding cottage) totaled 1.28 billion pounds, 6.7% above December 2024, with Italian-type production at 561 million pounds, up 7.4%. American-type cheese production reached 500 million pounds, up 6.8% from December 2024. Butter production was 204 million pounds, 2.0% above December 2024 and 15.0% above November 2025. Dry products showed mixed results, with nonfat dry milk at 127 million pounds, down 2.7% from December 2024. Manufacturing capacity utilization remains high as processors work to meet both domestic and export demand. Cream production is meeting butter manufacturers' needs, but some are purchasing additional spot loads for butter churns ahead of approaching holidays and seasonally tighter summertime cream volumes. ## 8. Federal Order Pricing Reforms Continue Market Impact FMMO changes created location-dependent impacts on producers' milk checks, with changing Class I differentials by county within federal orders. The nonfat solids components test was raised from 9% to 9.3% in the final rule, though butterfat composition changes weren't reflected in milk checks despite being the fastest-growing component. Cheddar cheese barrels were excluded from the National Dairy Products Sales report, with barrels accounting for an estimated 25-30% of total cheddar output, leading to significantly dropped barrel spot trading. Make-allowance increases on cheese, butter, NFDM and dry whey cut regulated U.S. Class III and IV prices by roughly $0.90-$1.03/cwt versus 2019-2023 levels. ## 9. Export Markets Drive Protein Demand Strength Export demand varies from steady to strong, though stakeholders indicate more challenging transportation logistics due to tighter space availability in shipping lanes and at ports. Bulk cheese demand is steady to strong with many converters seeking blocks and barrels, and export interest remains strong. Butter and cheese prices for 2026 were reduced on recent price weakness, but nonfat dry milk and whey were raised on robust demand for protein, with Class III milk prices lowered as lower cheese prices more than offset higher whey. U.S. cheese production is forecast 3% higher in 2026 driven by higher milk availability and growth in manufacturing capacity, with exports forecast to reach over 620,000 tons bolstered by strong price competitiveness. ## Quick Hits • Organic cheese ads jumped 45% with average price at $5.20, up 6 cents, while conventional ice cream ads increased 38% • Agriculture Secretary Brooke Rollins announced expanded DMC enrollment for 2026 through February 26, with Tier 1 coverage increased from 5 million to 6 million pounds • USDA updated that lactating dairy cattle from NMTS Unaffected States no longer require H5N1 testing for interstate movement, though California remains an Affected State at Stage 3 • Organic milk ads increased 29% while conventional milk ads fell 7%, with conventional gallon milk average price up 16 cents to $3.05 • Processors are maxing out capacities to meet global demands for U.S. dairy products, with May Class IV futures at $22.29/cwt and Class III at $17.56/cwt • Replacement dairy cow prices reached new record highs in April 2026 ## What to Watch Next Week Monitor CME spot dairy prices for any stabilization signals as cheese inventories continue building. June FMMO uniform price announcements due mid-June will reveal actual producer payment impacts from the $22.18 Class I base price. Track NMTS H5N1 testing results for any new state detections or spillover events. Global Trade Dairy auction results and New Zealand production updates could influence international price signals. Watch for any USDA dairy product purchase announcements that might provide floor support to weakening cheese markets. *The Therio Dairy Newsdesk delivers essential intelligence for dairy market participants. Our analysis combines regulatory expertise with real-time market data to help producers, processors, and traders navigate an increasingly complex global dairy landscape.*