U.S. bulk tanks are bulging thanks to added cows and increased output per cow, as the industry met in Madison for World Dairy Expo Sept. 30-Oct. 3.

The USDA’s latest data pegged August output at 19.52 billion pounds, up 3.2 percent from August 2024, the eighth consecutive month of gain. The 24 state total, at 18.77 billion, was up 3.3 percent.

July production in the 50 states was revised up a whopping 140 million pounds to 19.7 billion, up 4.2 percent, instead of the 3.4 percent originally reported. The 24 state total was revised up 139 million pounds to 18.95 billion, up 4.3 percent, instead of 3.5 percent.

Cow numbers totaled 9.520 million, up 10,000 head from July, and 176,000 or 1.9 percent more than a year ago. The July count was revised up 25,000 head. The 24 state head count, at 9.075 million, was up 7,000 from July, and 172,000 or 1.9 percent above a year ago. The July count was revised, up 28,000 head. The U.S. dairy herd is the largest since 1993, according to the Daily Dairy Report.

Output per cow averaged 2,050 pounds, up 27 pounds or 1.3 percent from a year ago in the 50 states and averaged 2068 pounds in the top 24, up 28 pounds or 1.4 percent. Revisions added 10 pounds to July’s national average and 9 pounds in the 24 states.

StoneX points out that August fat and protein content was also up from last year, meaning component adjusted growth was up 4.8 percent. It adds that the July revisions means component-adjusted milk production was up 5.5 percent. That’s a lot of milk just in the U.S., plus global production has grown 2.5-3 percent over the last four months.

Western United Dairies weekly newsletter reported that, while Northern California remains free of detections of bird flu, 75 dairies statewide are currently under quarantine, with 31 facing their first-ever cases. Researchers now consider the virus endemic and calls are for the USDA to fast-track a dairy cow vaccine.

Meanwhile, dairy cow culling remains about 6 percent behind year ago levels. The USDA’s weekly slaughter report showed 47,500 head were sent to slaughter in the week ending Sept. 6, down 4,700 from the previous week, and 200 head or 0.4 percent below a year ago. Year to date, 1,785,100 cows had been culled, down 109,000 head or 5.8 percent from a year ago.

Increasing milk production increases the importance of exports. China could be a bigger player but unfortunately, it’s not. Part of the problem is trade issues and dairy is not the only one affected. Reuters reports that China has bypassed U.S. soybeans for product from Argentina. That’s due in large part to tariffs.

China’s latest dairy import data shows that, on a 30-day adjusted basis, August skim milk powder imports printed the smallest volume since October 2016, according to HighGround Dairy, down 38.7 percent from a year ago, while whole milk powder imports were up 55.2 percent. Australia had the biggest market share, followed by Poland and Italy. Very little skim milk powder comes from the U.S. these days.

HighGround says Chinese skim milk powder ending stocks in July sat at 54,100 metric tons, nearly double the level recorded in July 2024. “Domestic SMP production ramped up quickly since the start of 2025, peaking in June at 4,500MT. With more internal production and improved inventory levels it is not surprising imports in August languished,” says HGD.

On a brighter note: China’s whey imports hit 145.3 million pounds, up 4.8 percent, a 30-month high, according to the Sept. 23 Daily Dairy Report. The DDR stated: “Amid a pause in the trade war, the United States accounted for slightly more than half of China’s dry whey imports in August, with U.S. shipments up 31.1 percent year over year. The United States and China remain on polite terms, for now, after President Donald Trump and Chinese President Xi Jinping reached an agreement to place a version of TikTok under US owners.”

August cheese imports totaled 27.2 million pounds, down 12.2 percent, largest year-on-year decline since November 2024, according to HGD.

Butter imports amounted to 9.3 million pounds, down 26.8 percent, lowest monthly volume on a 30-day adjusted basis since September 2020, says HGD. “Although U.S. butter prices have maintained a significant discount to European and New Zealand product since the start of the year, trade tensions with the U.S. deter Chinese buyers who opted instead to pick up more product from Belgium and the Netherlands.”

As I reported last week, the Fed lowered interest rates by .25 points citing an uptick in unemployment. However, StoneX stated in its Sept. 23 Early Morning Update: “If inflation is not under control (it has not gotten down to their 2 percent mandated target since April 2019) then that could become the greater issue in their dual-mandate.” That comes, even as the country faces a possible government shutdown after Sept. 30.

Checking prices: cash 40-pound block Cheddar fell to $1.61 per pound Monday, lowest CME price since June 24. It climbed to $1.64 Wednesday but was trading Thursday morning at $1.6375, following its Friday finish at $1.65, as traders anticipated Friday afternoon’s August Cold Storage report.

The 500-pound barrels dipped to $1.61 per pound Wednesday, lowest since March 21, but they managed to climb back to $1.6450 Wednesday and stayed there Thursday, after closing Friday at $1.64.

Milk production is steady to higher in the Central region, according to Dairy Market News. Contacts in the Southwest say warm weather is keeping output steady, while others in the Midwest report cooler temperatures are having a positive impact on production. Spot Class III milk is becoming more available, though some cheesemakers say they are already running full schedules and are not purchasing any extra. Prices mid-week were down from last week, ranging from $1-under to flat Class. Cheese production is steady in the Central region. Domestic cheese demand is steady while international sales remain strong.

Cheese manufacturers in the West report that milk is available despite seasonal bottling demands. Cheese production is steady to stronger. Domestic cheese demand is steady while export demand is steady to strong. Some say that export demand is helping to keep somewhat of a floor on domestic prices despite more competitiveness among international sellers. CME cheese prices topped Wednesday’s butter price for the first time since 2021.

Butter’s meltdown continued this week but paused Thursday after dipping to $1.62 per pound Wednesday, lowest CME price since Aug. 4, 2021. It regained 2 cents Thursday, hitting $1.64, after finishing Friday at $1.75. Global buyers are reportedly backing off, waiting to see how low this price will go.

Milk output is steady to higher in the Central region, says DMN, and contacts say production and components are up from a year ago, leaving plenty of cream available. Cream demand is steady to lighter. Butter makers are running busy production, but some are exclusively using internal cream and are not in the market for more. Domestic butter demand is steady to lighter while export interest remains strong. Inventories of 82 percent butterfat butter for export are tight, but domestic 80 percent butterfat inventories are available, according to DMN.