August U.S. milk production remained well above a year ago. but the gain slowed. The Agriculture Department’s latest data shows output at 19.9 billion pounds, up 1.7 percent from August 2025, which followed a 1.7 percent rise in July. The 24-state August total came in at 19.17 billion pounds, up 1.8 percent from a year ago. The gains will likely be enhanced when adjusted for rising component levels.

July output in the 50 states was revised down 100 million pounds to 20.0 billion, up 1.7 percent from a year ago, instead of the 2.2 percent originally announced. The 24-state total was revised down 100 million pounds, to 19.3 billion, up 1.8 percent, instead of the 2.3 percent originally reported.

August cow numbers totaled 9.710 million, up 15,000 from the July count, which was revised down 15,000 head, but was up 167,000 or 1.7 percent from a year ago. The 24-state count, at 9.264 million, was up 15,000 head from July’s total, which was revised down 18,000, but was up 151,000 or 1.7 percent from a year ago.

August milk per cow averaged 2,049 pounds in the 50 states, down 1 pound or 0.05 percent from a year ago. The 24-state average, at 2,070 pounds, was up 4 pounds or 0.2 percent from 2025. The July average was revised down 7 pounds in the 50 states and 6 pounds lower in the top 24 states.

StoneX called the report “bullish” but added: “We have a massive herd today, and while it’s not apparent from today’s Milk Production report, all metrics to the beef-on-dairy dynamic established in the last five-seven years and venerated over the last couple years is under some duress over the past month. Milk prices are under pressure, specifically Class III, beef prices are weakening and feed prices are firming. The financial models still suggest the producer ought to continue doing what he/she has been doing. Do more of what works, and beef on dairy still works. But financial models sometimes fail,” StoneX warns.

Speaking of cow numbers, the USDA’s weekly slaughter data showed 55,200 dairy cows were sent to slaughter the week ending Sept. 5, up 7,700 or 16.2 percent from a year ago. Year to date 1,866,100 cows, have been culled, up 81,000 or 4.5 percent from a year ago.

One of the big events in Washington this week was President Donald Trump’s address to the United Nations, followed by the arrival of Chinese President Xi Jinping for a three-day visit. Topics of discussion included the ongoing trade spat, AI, Iran, rare earth mineral trade, and agricultural purchases, particularly soybeans, of which China has not lived up to its previous commitments.

The latest dairy import data from China continued to disappoint and trail year ago levels. August imports were down 14 percent from August 2025 on a volume basis. HighGround Dairy said this was the smallest import volume for the month of August since 2015, with powder imports the key driver of the decline.

Whey imports totaled 110 million pounds, down 24.3 percent from a year ago, with volume from the U.S. down 38 percent, although 2025 imports were very strong, according to HighGround.

StoneX says, “There was some optimism that the hog market was starting to turn around in China, and it probably is in the very early stages, but the market remains oversupplied in the short-term.

“That has pushed piglet prices down again,” says StoneX, “and margins for producing piglets tipped negative in early September. That could keep low protein whey imports on the soft side until the margins or expectations improve.”

Whole milk powder (WMP) imports fell to 40 million pounds, down 40.7 percent. HighGround says, “While this is the smallest WMP import volume since 2015, the seasonality of the decline is not unusual.”

Skim milk powder (SMP) imports totaled 16.8 million pounds, down 22.7 percent, the lowest in 13 years, according to HGD, which blamed domestic SMP production being up 46 percent through July.

On a brighter note, China’s butter imports hit 20.4 million pounds, up 118.6 percent, though the gain was partly due to weak imports a year ago, according to HGD. Imports have been more consistent this year and most were from New Zealand.

Cheese imports climbed to 37.9 million pounds, up 28.9 percent from July, and up 39.4 percent from a year ago. New Zealand cheese volumes grew 58 percent, according to HGD, “holding 60 percent market share, alongside growth from Australia, the UK, and the U.S., while some European origins slipped.”

CME block Cheddar crept up to $1.3650 per pound Monday, but was trading Thursday at $1.3275, lowest since Jan. 16, and 32.75 cents below a year ago. This would be its sixth consecutive week of decline. It closed Friday at $1.35. The barrels remained at Friday’s close of $1.4525, 17 cents below a year ago.

Milk supplies in the Central region remain tight, according to Dairy Market News. Spot loads continue to be limited. Contacts cite ongoing distribution challenges influenced by diesel price pressures across much of the U.S., as well as concerns regarding poor corn silage conditions. Market activity is described as generally quiet. Several processing plants in the region were actively seeking milk. Class III prices at mid-week were holding steady at flat class to $2 over. Bulk cheese is described as abundant. Mozzarella sales are reported as strong, though some contacts note scaled back production. International interest is steady.

DMN says demand for cheese manufacturing in the West is strong, predominantly due to high demand for whey and whey derivatives. Cheese manufacturers are receiving contracted milk loads but they are tighter. Facilities report stable schedules, though limited milk availability may make maintaining full production a long-term challenge. Spot loads of cheese remain readily available. No changes are reported in food service or export demand. Retail ads for conventional 6-8 ounce shredded cheese in the West show prices 32 to 35 cents below the national weighted average advertised price of $2.79, with the Southwest averaging $2.47 and the Northwest averaging $2.44. Some contacts report rising freight costs are expected to affect fourth quarter contracts.

Cash butter fell to $1.34 per pound Tuesday, lowest CME price since Jan. 15, 2026, but it was trading Thursday at $1.3575, 36.25 cents below a year ago. It finished Friday at $1.37.

The Central region butter market tone is generally quiet, according to DMN. Cream supplies are steady, with spot loads accessible to regional buyers.