In the news affecting a dairy producer's bottom line the third week of June 2026:
- Class I base milk price dips after up-and-up run
- Fluid milk sales shift higher again
- GDT index down 2.8%
- CoBank: Dairy heifer inventories to remain low before rebounding in 2027
- USDA invests in projects to strengthen New World screwworm preparedness, response
- DFA announces idling of plant and closure of store in Vermont
Class I base price milk dips after up-and-up run
After four consecutive months of the advanced Class I base price climbing, July’s price showed some retreat.
Announced June 17, the Federal Milk Marketing Order (FMMO) advanced Class I base price dipped 85 cents from the month prior to $21.33 per hundredweight (cwt) in July. This is the first time since February where the price was lower than the previous month, although $21.33 per cwt remains $2.51 per cwt above the advanced Class I base price in July 2025.
Class I zone differentials are added to the base price principal pricing points to determine the actual Class I price in each FMMO. With those additions, July’s Class I price should average $25.45 per cwt across all orders with the highest price reported in the Florida FMMO at $28.13 per cwt and the lowest price in the Arizona FMMO at $23.93 per cwt.
The July Class I base skim milk price was $15.91 per cwt, down from June’s $16.75 per cwt. The spread in the monthly advanced Class III skim milk pricing factor ($10.72 per cwt) and the advanced Class IV skim milk pricing factor ($15.91 per cwt) was $5.19 per cwt, retreating from June’s high of $5.36 per cwt. This once again positioned Class IV as the “higher of” for the Class I mover in the milk pricing formula. The advanced butterfat pricing factor was $1.71 per pound, down a penny from June.
The advanced Class I base price and pooling percentages will impact regional FMMO uniform milk prices. June regional prices will be announced July 9-14, and the July regional prices will be announced Aug. 10-14.
Fluid milk sales shift higher again
With 3.5 billion pounds of packaged fluid milk products shipped by milk processors in April 2026, fluid milk sales were up slightly (0.3%) from April 2025. According to data from the USDA Agricultural Marketing Service:
- Total sales: April 2026 sales of packaged fluid milk products were estimated at 3.5 billion pounds, up 0.3% from the same month a year earlier. At 14.3 billion pounds, year-to-date sales of all fluid products are 0.1% lower than last year.
- Conventional products: Monthly sales totaled 3.3 billion pounds, up 0.6% from the same month a year earlier. Sales of flavored whole milk were 19.8% higher than last year, and whole milk was up 2.6%. Year-to-date 2026 sales were estimated at 13.3 billion pounds and were on par with last year.
- Organic products: April sales totaled 241 million pounds, down 4% than a year earlier. Sales were up 37.6% for flavored whole milk and up 15.3 for flavored fat-reduced milk. Year-to-date organic fluid milk sales were estimated at 1 billion pounds, down 0.9% from this time last year. Organic represented about 6.8% of total fluid product sales in April.
The U.S. figures are based on consumption of fluid milk products in FMMO areas, which account for approximately 92% of total U.S. fluid milk sales, and adding the other 8% from outside FMMO-regulated areas. Sales outlets include food stores, convenience stores, warehouse stores/wholesale clubs, nonfood stores, schools, the food service industry and home delivery.
GDT index down 2.8%
The price index of dairy product prices sold on the Global Dairy Trade (GDT) platform is down 2.8% in the auction held June 16.
Compared to the previous auction, prices for individual product categories were mostly lower. Lactose was the only product trading higher, up 4.2%. Mozzarella was down 5%, and skim milk powder was down 3.6%. Cheddar cheese and whole milk powder were down 3.4% and 3.1%, respectively. Butter fell 2.4%, while anhydrous milkfat was down 1%. Buttermilk powder did not have a significant change.
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 next GDT auction is July 7.
CoBank: Dairy heifer inventories to remain low before rebounding in 2027
The U.S. dairy herd has reached its largest size in 30 years, but one critical subset of the herd – replacement heifers – remains historically low. The number of heifers available to enter the milking herd has fallen sharply, dropping to the lowest level since 1978.
According to a new report from CoBank’s Knowledge Exchange, replacement heifer supplies are projected to shrink even further in 2026 before beginning to rebound in 2027. With replacements in short supply, producers are retaining adult dairy cows that would have typically been culled, contributing to the overall increase in the U.S. dairy herd. At the same time, producers are making more beef-on-dairy calves, further tightening dairy replacement heifer supplies. This has pushed heifer prices into record territory, well over $3,000 per head.
“On most dairy farms, net margins are currently being driven by the beef check, not the milk check,” said Corey Geiger, lead dairy economist with CoBank. “Five years ago, calf and cull cow sales accounted for 5 percent of a dairy farm’s bottom line while milk sales represented 95 percent of their revenue. Today, beef sales account for 12 to 15 percent of revenue on many farms, with some operations approaching 20 percent when measured on a per hundredweight basis. That shift is reshaping the U.S. dairy herd, most notably through the decline in replacement heifers.”
CoBank’s modeling indicates that dairy replacements entering the milking herd between last year and this year are shrinking by a combined 796,000 head, followed by a rebound of 360,200 head in 2027 and 2028. The projections are based on semen sales data from the National Association of Animal Breeders and assume average annual rates of conception, pregnancy loss and other key reproductive measures.
Abbi Prins, agricultural commodities economist with CoBank, said the surge in beef semen sales to dairy farmers in 2023 will continue to suppress replacement heifer inventories this year due to the three-year biological cycle from conception to first calving.
“Over time, we expect dairy farmers will continue rebalancing their breeding programs to optimize production for both beef and dairy markets. But dairy will continue to play a significant role in the beef supply for the foreseeable future, as rebuilding the beef cattle herd will take several years,” Prins said.
USDA invests in projects to strengthen New World screwworm preparedness, response
The USDA has announced funding for 40 breakthrough projects to bolster the nation’s defenses against New World screwworm (NWS). These innovative proposals, which will receive a combined total of about $105 million, promise to sharpen detection, accelerate control and eradication tools, and strengthen rapid-response capabilities.
The USDA launched the NWS Grand Challenge on Jan. 21, as part of a five-pronged plan to support producers’ success, protect the nation’s food supply and build long-term resilience against NWS. The Grand Challenge called on innovators from federal and non-federal entities to help in the efforts to prevent the spread of NWS by developing high-impact projects to enhance detection, control and eradication readiness.
“We launched the Grand Challenge expecting bold, innovative and science-backed ideas to fight New World screwworm, and the proposals delivered just that,” said U.S. Secretary of Agriculture Brooke Rollins. “These projects represent the creativity, scientific rigor and determination we need to reinforce our existing efforts, empower our producers and safeguard American agriculture and our food supply. We have beaten this pest before, and by leveraging innovative solutions and advancements in technology, we will beat it again in record time.”
The USDA reviewed 226 applications, requesting about $664 million in total funding. Projects were selected based on their innovative approaches, scientific gold standards and their potential to make a significant impact on the prevention and response to NWS.
In addition to the 40 projects announced this week, work has already started on two additional USDA-funded projects that are a part of the Grand Challenge. Texas A&M AgriLife Research is assessing the feasibility, efficacy and operational readiness of electron beam (eBeam) technology as a non-radioactive alternative to cobalt-60 gamma irradiation for sterilizing NWS pupae in sterile insect technique programs, and the University of Florida is evaluating two U.S.-made X-ray irradiators for sterilizing NWS pupae using secondary screwworm as a surrogate.
DFA announces idling of plant and closure of store in Vermont
Dairy Farmers of America (DFA) decided to idle its plant in St. Albans, Vermont, effective Aug. 17. The plant currently produces cream, condensed skim milk and nonfat dry milk (NFDM). This decision also includes closing the adjoining St. Albans Creamery & Supply.
As a result, approximately 80 employees will be impacted. DFA is committed to supporting these employees through this transition.
Milk currently handled at the facility will be transitioned within DFA’s network, and farmer-owners will continue to have a market for their milk.
