Set against milk output that was down 1.7% last year from June 2023 due to avian influenza, June 2025 production soared to 19.2 billion pounds, up 3.3% from a year ago. It was the biggest monthly increase since May 2021 and the sixth consecutive month that output topped a year ago as cow numbers and output per cow grew. The 24 State output, at 18.5 billion pounds, was up 3.4%.

May production in the 50 States was revised up 142 million pounds, resulting in a 2.3% gain instead of the originally reported 1.6% jump. The 24 State total was revised up 136 million pounds, up 2.4%, instead of 1.7%.

Cow numbers totaled 9.469 million, up 4,000 head from May, and 146,000 or 1.6% more than a year ago. It is the largest dairy herd since July 2021. The May count was revised up 20,000 head. The 24-State count, at 9.029 million, was up 3,000 from May and 151,000 or 1.7% above a year ago. The May count was revised, up 22,000 head.

Adding to the bearish data, components in milk were also up, lifting component adjusted production to plus 5.0% from last year, according to StoneX. 

Output for the April to June quarter totaled 58.7 billion pounds, up 2.4% from a year ago. Milk cows numbered 9.46 million head, up 56,000 from the January to March quarter, and 127,000 more than the same period a year ago.

Recovery from bird flu came to California where output was up 91 million pounds or 2.7% from a year ago when it had dropped 2.1%. This was the state’s first gain in nine months, thanks to 3,000 more cows and 50 pounds more per cow. 

Wisconsin output was up 9 million pounds or 0.3% on a 5,000 cow drop, though 

Michigan was up 4.8% on 17,000 more cows and a 20 pound gain per cow. Minnesota was up 1.3%, on a 30 pound gain per cow offsetting the loss of 1,000 cows. 

Washington State saw the biggest drop in the country, down 9.4%, due to 22,000 fewer cows milked and a 20 pound loss per cow. Producers in the state continue to reel from large retains as their cooperative struggles with huge cost overruns on a new plant that only recently came on line in Eastern Washington. 

The increased cow numbers were “significant,” said HighGround Dairy’s Curtis Bosma in the July 28 Dairy Radio Now broadcast. He said there’s a lot of talk about heat stress right now but we’re seeing a lot of changes in the dairy herd.

Cull rates are down, people are holding cows longer to get that extra lactation, and beef on dairy plays into the strategy. Cattle near the end of their productive milk lifecycle, the thinking is to get one more calf out of them, he said, considering what they’re worth today. It’s a significant amount of revenue.

Bosma expects “moderate growth” to continue but “When you look at replacement values and how tight the heifer inventory has been, there was a lot of doubt that dairy producers could really step on the gas with additional milk but this shows us there’s been a lot of planned expansion and with the new capacity coming on line, we’re seeing the milk there as well,” he concluded.

Above average temperatures and high humidity hit much of the US this week. That could show up in July milk production and impact crops.

June dairy imports into China tell a story. Whole milk and skim milk powder imports, at 83.3 million and 37.5 million pounds respectively, were both up 10.3% from June 2024 on a daily average basis.

Whey product imports totaled 89.9 million pounds, down 26.6%, “Amidst a tense trade war with the US,” says HighGround Dairy. “Whey imports dropped to the lowest monthly volume on a 30-day adjusted basis since Feb. 2024 and the smallest June volume since 2019.” 

HighGround says 40.2 million pounds or 61% less whey came from the US, “tanking US market share from 54% to 28%.” “Although a trade truce was agreed upon in June, US whey imports will continue to face a 35% tariff rate into China,” says HGD. To avoid this levy, more buyers are turning to Europe, with shipments most notable from the Netherlands, Belarus, Germany, and Poland.

Germany has overtaken the US as the top origination country for whey protein concentrate at 80% imports, with 46% market share, according to HGD, while the US has fallen to just 17% market share from 32% in June 2024. “China has been the top destination for US whey and whey derivative exports, however, the current trade dispute is shifting this dynamic, driving more Chinese buyers to diversify their supply lines, ultimately changing the global whey trade.”

Butter imports totaled 19.3 million pounds, down 17.4%, and cheese amounted to 34.7 million, down 2.8%. HighGround says “Cheese imports have trended above prior year levels for the past four consecutive months but fell in June after marking a record high May. Shipments from New Zealand continue to grow.”

The US and Japan reached a trade agreement this week, as did Indonesia. The National Milk Producers Federation (NMPF) the U.S. Dairy Export Council and the Consortium for Common Food Names applauded the agreement which will eliminate tariffs on the vast majority of US exports and contains pledges to remove longstanding nontariff barriers affecting American dairy products.

Checking prices, CME Cheddar held at Friday’s close of $1.6425 per pound for three days this week, then inched a quarter-cent higher Thursday, to $1.6450, as traders absorbed the June milk production data and await Friday afternoon’s June Cold Storage report, which I will detail next week. 

The barrels were holding at Friday’s close at $1.66 per pound.

Milk output is steady to lighter in the Central region, reports Dairy Market News. High temperatures in the southern portion continue to have a negative impact on milk output while the Midwest reports mild weather kept production steady. Spot loads were becoming more difficult to find in most of the region, but downtime at nearby facilities was keeping milk available at below Class prices. Cheese production is steady. Retail and food service demand is light, exports are strong.

Class III milk is keeping up with demand from cheese manufacturers in the West and demand is steady. Spot availability was looser in parts of the region this week due to production downtime for commodities other than cheese at some facilities. A few cheese manufacturers convey tight stocks of varietal cheeses for third quarter but many cheesemakers and distributors say spots loads are widely available. Domestic cheese demand is steady to light, international demand is steady to strong, according to DMN.

Butter fell to $2.42 per pound Wednesday and stayed there Thursday, down 9.25 cents in three days, lowest since May 22, following its Friday finish at $2.5125.

Central region milk production and component levels are declining week-to-week, but both remain above a year ago, according to DMN. Cream is tightening but spot availability remains sufficient for ice cream and butter makers. Butter makers are actively churning and some are freezing butter for use later in the year. Food service butter demand is light and retail sales are softening. International butter prices remain high compared to US product. 

Western butter manufacturers say cream is somewhat tighter. Some handlers note fat components in milk output are declining. Cream multiples mid-week were rising. Butter production is steady to lighter. Some manufacturers purchased less spot cream than in earlier weeks. In a few cases, production was lighter as producers replaced equipment. Domestic butter demand is steady to lighter. A few domestic buyers were offered loads initially intended for international buyers, but export demand is generally strong, says DMN.

Grade A nonfat dry milk climbed to $1.3025 per pound Wednesday, highest CME price since Feb. 10, 2025. It fell to $1.28 Wednesday, but climbed back Thursday to $1.2875, after closing Friday at $1.29.

Tuesday’s Milk Production report showing a rebound in milk output in California no doubt portends extra powder ahead from the nation’s largest powder producer. 

Dry whey was trading Thursday morning at 52.50 cents per pound, after closing Friday at 55.75 cents.

The August Federal order Class I base milk price was announced by USDA at $18.93 per hundredweight, up 11 cents from July but $2.39 below August 2024, and equates to $1.63 per gallon, down from $1.83 a year ago. The eight month Class I average is $19.45, up from $19.43 a year ago, and $19.07 in 2023.

Speaking of Class I milk, as I reported last week, the USDA’s latest data showed packaged fluid sales in May at 3.6 billion pounds, down 0.9% from May 2024, but that followed a 1.8% drop in April. Conventional product sales totaled 3.3 billion pounds, off 0.7% from a year ago. Organic sales, at 252 million, were down 4.0% from a year ago, and represented 7.1% of total milk sales in the month. 

Whole milk sales totaled just under 1.3 billion pounds, up 2.1% from a year ago, and up 0.6% year to date. Whole milk represented 36.3% of total milk sales for the month. Skim milk sales fell to 151 million pounds, down 5.3% from a year ago and down 5.6% YTD. 

Packaged fluid sales in the five month period totaled 17.9 billion pounds, down 1.4% from 2024. Conventional product sales totaled 16.6 billion, down 1.6% from a year ago. Organic products, at 1.3 billion pounds, were up 1.1% and represented 7.1% of total milk sales in the five months. The figures represent consumption in Federal market orders, which account for about 92% of total fluid sales in the U.S.

Looking down under, the July 23 Daily Dairy Report stated “New Zealand opened its new milk production season with an eye-popping year-over-year increase of 14.6% in June. Total milk collections of 261,000 metric tons were a record high for June. Milk solids were also up sharply, posting a whopping 17.8% increase in the opening month of the season.”

Meanwhile, Tuesday’s Global Dairy Trade Pulse saw just under 4.1 million pounds of product sold, up slightly from 4.0 million on July 8. Prices on both skim and whole milk powder were up slightly from the July 8 Pulse.