In the news affecting a dairy farmer's bottom line the fourth week of July 2026:
- August Class I base milk price falls more than $2
- U.S. imposes 50% tariffs on dairy imports from Canada
- Fluid milk sales fall in May
- GDT index up 1.5%
- NMPF: Component growth rebounds in May
- Danone USA released its first-ever economic impact study
August Class I base milk price falls more than $2
The August Class I base price dropped more than $2 per hundredweight (cwt) after July’s price indicated imminent downward pressure as the result of ample milk production but weaker markets for dairy categories like cheese.
Announced July 22, the Federal Milk Marketing Order (FMMO) advanced Class I base price fell $2.57 per cwt from the month prior to $18.76 per cwt in August. This price marks the first time in 2026 that the Class I base price has fallen more than $2 per cwt from the month prior. And at $18.76 per cwt, that’s 17 cents below the Class I base price in August 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, August’s Class I price should average $22.88 per cwt across all orders. The highest price should be reported in the Florida FMMO at $25.56 per cwt, while the lowest price should be noticed in the Arizona FMMO at $21.36 per cwt.
The August Class I base skim milk price was $13.18 per cwt, down from July’s $15.91 per cwt. The spread in the monthly advanced Class III skim milk pricing factor ($9.59 per cwt) and the advanced Class IV skim milk pricing factor ($13.18 per cwt) was $3.59 per cwt, with Class IV being used as the “higher of” for the Class I mover in the milk pricing formula. While Class IV remained the higher of for the sixth straight month now, the gap between the two classes is narrowing from June’s record spread.
The advanced butterfat pricing factor was up 2 cents from July to $1.73 per pound.
The advanced Class I base price and pooling percentages will impact regional FMMO uniform milk prices. July regional prices will be announced Aug. 10-13, and the August regional prices will be announced Sept. 9-14.
U.S. imposes 50% tariffs on dairy imports from Canada
On Monday, the White House imposed additional 50% tariffs on certain goods from Canada, including dairy products.
Declaring Canada has unfairly discriminated against American autos, alcohol and dairy products, President Donald Trump issued three proclamations pursuant to Section 338 of the Tariff Act of 1930.
These goods had been protected from import taxes under the United States-Mexico-Canada Agreement (USMCA), but the U.S. chose not to renew that agreement earlier this month, triggering a new set of negotiations between the three countries.
U.S. dairy groups supported the move.
“For far too long, Canada has intentionally misused its tariff-rate quota system to impede the full use of USMCA dairy quotas. It’s time for Canada to come to the table and resolve this and other USMCA dairy issues. We look forward to working with the administration to ensure that all the intended dairy benefits of USMCA are fully realized,” said Krysta Harden, president and CEO of the U.S. Dairy Export Council.
Gregg Doud, president and CEO of National Milk Producers Federation (NMPF), said, “Canada simply cannot continue to discriminate against U.S. dairy farmers by effectively blocking negotiated access to its market. It is well past time for Canada to negotiate in good faith and tackle the outstanding USMCA dairy implementation issues to help drive a successful conclusion of the USMCA review.”
In a statement, Dairy Farmers of Canada said, “The U.S. has been successful in accessing the Canadian market under [USMCA]. In fact, between 2019 and 2025, exports of U.S. dairy products to Canada increased significantly, rising from 423 million CAD in 2019 to 1.06 billion CAD in 2025. This represents a 150 percent increase in value over the period.
“We appreciate the continued support of Canadians and are counting on the government to defend dairy farmers and all Canadian industries.”
The tariffs are set to take effect on Aug. 19, leaving time for negotiations.
Fluid milk sales fall in May
With nearly 3.5 billion pounds of packaged fluid milk products shipped by milk processors in May 2026, fluid milk sales were down 2.1% from May 2025. According to data from the USDA Agricultural Marketing Service:
- Total sales: May 2026 sales of packaged fluid milk products were estimated at 3.5 billion pounds, down 2.1% from the same month a year earlier. At 17.8 billion pounds, year-to-date sales of all fluid products are 0.5% lower than last year.
- Conventional products: Monthly sales totaled 3.2 billion pounds, down 2.2% from the same month a year earlier. Sales of flavored whole milk were 11% higher than last year. Year-to-date 2026 sales were estimated at 16.5 billion pounds, which is down 0.4% from last year.
- Organic products: May sales totaled 250 million pounds, down 1% than a year earlier. Sales were up 2% for whole milk and 1.9% for flavored whole milk. Year-to-date organic fluid milk sales were estimated at 1.3 billion pounds, down 0.9% from this time last year. Organic represented about 7.2% of total fluid product sales in May.
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 up 1.5%
After three consecutive negative events, the price index of dairy product prices sold on the Global Dairy Trade (GDT) platform is up 1.5% in the auction held July 21.
Compared to the previous auction, prices for individual product categories were mostly higher. Buttermilk powder had a significant jump, up 10.5%. Skim milk powder and lactose were up 2.8% and 2%, respectively. Whole milk powder, mozzarella and anhydrous milkfat were up over 1%. Cheddar cheese fell 6.5%, and butter was down 0.6%.
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 Aug. 4.
NMPF: Component growth rebounds in May
Component-adjusted milk production grew 3.1% in May on account of a larger milking herd and a rebound in component tests, according to a report from Katriel Marks-Yant at NMPF.
Summarizing dairy markets in the July 2026 Dairy Management Inc./NMPF Dairy Market Report, Marks-Yant said, “More milk means more dairy products, and healthy domestic demand combined with exceptional export volumes have prevented cheese and butter volumes from becoming burdensome at the CME, even as prices are towards the lower end of their historic range. Conversely, exceptional domestic demand for proteins, both in the form of nonfat dry milk and whey protein concentrates, has reduced export availability for those products. Beyond the United States, global milk supply may be slowing for the first time in months as heat waves impact milk production, particularly in the European Union, potentially setting the stage for improved global prices.”
Looking at the Dairy Margin Coverage (DMC) margin, feed costs are expected to increase as heat waves and renewed purchases from China elevate CBOT Corn and Soybean Meal futures, potentially setting the stage for DMC payouts in July and August.
For more information on commercial use, dairy trade, milk production, product inventories, prices and margins, view the July 2026 Dairy Market Report.
Danone USA released its first-ever economic impact study
Earlier this month, Danone USA announced findings from its first-ever U.S. economic impact study, reporting a $9.6 billion contribution to the U.S. economy in 2025. The study demonstrates how Danone’s mission of bringing health through food to as many people as possible supports American jobs, farming and manufacturing communities and economic resilience.
The company’s U.S. business includes more than 5,000 employees, more than 10 manufacturing facilities and a portfolio of brands designed to support evolving consumer health priorities, including high-quality protein, probiotics and fiber, plant-based nutrition and lower to no added sugar options.
“At Danone, our mission is delivered every day in the foods we make and the communities we serve,” said Dan Magliocco, president, Danone USA. “We source from American farmers, invest in U.S. manufacturing and make nutrient-dense food – all designed to help drive a unique ripple effect on community health, on and beyond the shelf. This report demonstrates how our business is supporting jobs, the local economy and bringing resilience to industries connected to American food and nutrition.”
Here are highlights from the report:
- In 2025, the company’s business supported approximately 22,000 American jobs across agriculture, manufacturing, research and development and other industries.
- Across the country, every Danone job helped support nearly three additional jobs across farms, suppliers, transportation networks and local communities.
- The company sources approximately 90% of its ingredients domestically.
- In 2025, Danone purchased approximately 200 million gallons of milk from American farms across many states, helping generate economic activity across key farming regions including Kansas, Utah, Idaho, Ohio, Indiana and Wisconsin.
- Beyond sourcing, Danone continues to invest in regenerative agriculture and farm innovation, supporting practices that help improve soil health, farm productivity and long-term agricultural resilience.
- The company’s investments in domestic production, including billions invested in U.S. manufacturing over the past decade, continue to help strengthen supply chain resilience, support American jobs and drive innovation.
