The July Class III benchmark milk price took a tumble, dropping to $17.32 per hundredweight, down $1.50 from June, a whopping $2.47 below July 2024, and the lowest level since April 2024. That put the seven-month average at $18.76, up from $17.33 a year ago, and $16.95 in 2023.

Wednesday’s Class III futures settlements portended an August price at $17.07; September, $17.33; October, $17.89; November and December at $18.10.

The July Class IV price is $18.89, up 59 cents from June but $2.42 below a year ago. Its seven-month average stands at $18.87, down from $20.33 a year ago, and compares to $18.55 in 2023.

Speaking in the Aug. 4 Dairy Radio Now broadcast, StoneX broker Dave Kurzawski cited the growing milk supply as the dominant factor for the decline. Domestic dairy demand has been basically flat, he said, while export demand is good, especially for cheese. Butter has better domestic demand and nonfat dry milk has been “wonky.”

The good news is that the economy is doing pretty good, he said, and we have trade deals getting done and that could be a buoyant factor going into the bigger demand time period in the fall.

When asked if any of the trade agreements stood out as being really strong for dairy, he said no, however as more deals are made, pressure mounts on the other countries to complete one, including China. We’re moving in the right direction, he concluded, perhaps the most important ones for dairy are those with Mexico and Canada.

June butter stocks remained below those a year ago while cheese was slightly higher, according to the latest Cold Storage report. Strong exports and perhaps some good domestic demand kept product out of the cooler.

The June 30 butter inventory slipped to 354.5 million pounds, down 10.2 million pounds or 2.8 percent from May, and down 22.4 million or 5.9 percent from June 2024. May stocks were revised up 3.1 million pounds.

American type cheese stocks slipped to 805.1 million pounds, down 2.6 million or 0.3 percent from the May level, but were up 3.6 million or 0.4 percent from a year ago.

The “other” cheese category holdings climbed to 584.1 million pounds, up 5 million pounds or 0.9 percent from May, but down 9.2 million or 1.6 percent from a year ago. The May total was revised down 3.2 million pounds.

June’s total cheese inventory stood at 1.41 billion pounds, up just 2.6 million pounds or 0.2 percent from May, but down 5.1 million or 0.4 percent from a year ago. The May total was revised down by 3.1 million pounds.

June was the 16th consecutive month that stocks were below the previous year. Cheese stocks typically decline from May to June, but grew this year as increased supply from new plants coming online stayed ahead of demand.

CME block Cheddar was trading Thursday morning at $1.6825 per pound, after closing Friday at $1.64. The barrels were at $1.68 Thursday, after finishing Friday at $1.6250, lowest CME price since June 24.

Central region milk output is seasonally declining, reports Dairy Market News, but some producers in the Midwest say cool overnight temperatures are keeping milk volumes somewhat steady. Class III prices mid-week ranged $3-under to $1-over. Spot volumes are tightening, though some plants say milk was available due to downtime at nearby facilities. Cheese production is steady to lighter in the Central region. Domestic retail and food service cheese demand is light, but interest from purchasers in export markets remains strong.

Milk output is keeping up with contractual needs in the west, according to cheesemakers, but their demand is steady. Availability was seasonally tighter, however some plant downtime has provided milk. Cheese production is steady for the most part. A few manufacturers report tight stocks. Domestic demand is lighter. Export demand is steady to stronger, according to DMN.

Cash butter started the week with a 3.50 cent jump to $2.50 per pound, then inched up to $2.5025 Tuesday, but the rally was short lived and fell back to $2.4725 Wednesday, and held steady Thursday, after closing Friday at $2.4650.

Milk production and component levels are declining seasonally in the Central region, contributing to lighter cream production. Demand for cream from ice cream makers is declining, leaving a greater volume available for butter. Butter output is steady. Demand is light in domestic markets. Food service sales are down from a year ago, while export demand remains strong.

Fat components in milk are decreasing in the West and milk output is seasonally lower, says DMN, but contractual cream to butter manufacturers was being filled. Spot loads are tighter and multiples were moving up at mid-week. In a few cases, churns were quiet for much of third quarter due to equipment replacement. Others were running heavily but not to full capacity. Some cite current prices for spot cream as the reason. Domestic butter demand is steady to lighter. Exports are steady to strong, according to DMN.

Grade A nonfat dry milk finished Thursday morning at $1.29 per pound, after closing Friday at $1.2875.

StoneX says demand from Mexico has stalled a bit and buyers have stepped back after some buying in the beginning of July. “A stronger U.S. dollar and the potential of a weaker GDT would put short term pressure on nonfat prices.”

Dry whey was trading Thursday at 53.25 cents per pound. It finished Friday at 54 cents per pound.

The July 25 Daily Dairy Report stated, “On July 1, 3.5 million heifers were available for milk-cow replacement, the lowest midyear total since USDA began estimating heifer counts in 1989. The agency did not publish its semi-annual Cattle inventory report in 2024 due to budget cuts, so year-over-year comparisons were not unavailable. However, in July 2023, USDA pegged the inventory of dairy heifers weighing 500 pounds or more at 3.65 million head, the lowest count since 2004. In today’s report, USDA revised its July 2023 estimate downward to 3.5 million head. So, while the agency’s revised figures show no change in dairy heifer inventories in the most recent 24 months, USDA’s estimate is much lower than it was two years ago,” according to the DDR.

To the chagrin of President Donald Trump, and no one’s surprise, the Federal Reserve left interest rates unchanged this week. Meanwhile, as the president’s Aug. 1 tariff deadline approached, Trump announced a new trade agreement with the EU. EU goods will face a 15 percent tariff rate, with some exemptions, and the EU agreed to purchase $750 billion of energy and invest $600 billion more in the U.S. Officials from the U.S. and China resumed negotiations in Sweden on Monday. Agreement was made with South Korea. Talks with India were not successful.

The National Milk Producers Federation and U.S. Dairy Export Council Executive Vice President for Policy Development & Strategy, Jaime Castaneda, and Senior Vice President for Global Economic Affairs, Will Loux, testified Monday before the U.S. International Trade Commission, citing the need for the government to hold trading partners accountable for policies that disrupt global markets for nonfat milk solids products and harm U.S. dairy producers and exporters. 

Chief among those concerns were Canadian policies, says NMPF.