The war in Iran may have come to an end as a Memorandum of Understanding was digitally signed by Iran’s President and President Donald at the recent G7 Summit. Meanwhile, the Federal Reserve, now under its new chairman Kevin Warsh, decided to not make any changes in interest rates.

The USDA announced the July Federal order Class I base milk price at $21.33 per hundredweight, down 85 cents from June, but is $2.51 above a year ago. It equates to $1.83 per gallon, up from $1.62 a year ago. The seven-month Class I average now stands at $18.41, down from $19.53 at this time a year ago, and compares to $19.16 in 2024.

Fluid milk sales inched higher in April after gaining 2.3 percent in March. USDA’s latest data reported packaged sales at 3.5 billion pounds, up 0.3 percent from April 2025. Conventional product sales totaled 3.3 billion pounds, up 0.6 percent from a year ago. Organic sales, at 241 million, were down 4.0 percent from a year ago, and represented 6.9 percent of total milk sales in the month.

Whole milk sales totaled 1.3 billion pounds, up 2.6 percent from a year ago, and up 3 percent for the four-month period. Whole milk represented a typical 36.5 percent of total sales for the month. Skim milk sales, at 136 million pounds, were down 9.3 percent from a year ago and down 8.3 percent year to date.

Packaged fluid sales in the four months totaled 14.3 billion pounds, down 0.1 percent from 2025. Conventional product sales totaled 13.3 billion pounds, virtually unchanged from a year ago. Organic products, at 1.0 billion pounds, were down 0.9 percent, and represented 7.1 percent of total milk sales for the year so far.

The figures represent consumption in Federal market orders which account for about 92 percent of total fluid sales in the U.S. About 7.5 percent of U.S. fluid sales are consumed in schools.

CME block Cheddar fell to $1.45 per pound Thursday, lowest price since Feb. 17, 2026, down 3.75 cents on the Juneteenth-holiday shortened week, and 21.50 cents below a year ago, as traders anticipated Monday’s May Milk Production report. The barrels were bid up 4 cents Thursday, hitting $1.46, 19.75 cents below a year ago. Trading totaled a whopping 63 cars of block on the week, highest since the week of June 23, 2025, and no barrel.

Central region milk production is strong, reports Dairy Market News. Some cheesemakers said they were getting fewer offers for discounted Class III milk. Prices at mid-week ranged $2-under to 50 cents over Class.

Cheesemakers continue to run busy schedules, though some were producing more barrels.

Domestic demand for cheese was unchanged in both retail and food service markets. Export interest is strong and contacts say they are hearing more from purchasers in Mexico looking for additional loads than they were a year ago.

Cheese manufacturers in the West report milk and cream production continues to meet their needs. Cheese production was steady. Some manufacturers report production paces and demand are in good parity making their uncommitted inventories tight. Demand from domestic and international buyers is steady.

Butter fell to $1.5550 per pound Wednesday, lowest CME price since May 22. It stayed there Thursday, down 11.25 cents on the week and 94.50 cents below a year ago. There were 51 sales on the week, down from 161 the week before.

Higher temperatures in the Midwest are negatively impacting component levels and contributing to lighter cream production, says DMN. Spot cream is available, but strong demand from Class II and III processors was leaving little available for churns. Some were paying higher cream multiples this week, while others were securing volumes from other regions. Butter makers continue to run busy production. Retail butter demand was unchanged, and some contacts noted an uptick in food service sales. Export interest has softened compared to the early months of 2026, but demand is meeting expectations.

Grade A nonfat dry milk continued to plunge, dipping to $1.6350 per pound Wednesday, lowest since Feb. 19, but closed Thursday at $1.64, 14.50 cents lower on the week, and 38 cents above a year ago. There were 26 sales.

Dry whey finished Thursday at 68 cents per pound, unchanged on the week, but 11 cents above a year ago, with one sale posted for the week.

Writing in the June 12 Milk Producers Council newsletter, the Daily Dairy Report’s Sarina Sharp stated: “European whey prices have climbed straight upward since April, making U.S. whey look like a bargain. U.S. dry whey exports posted their second-largest monthly total on record in April, up 72 percent year over year. Strong demand from China has boosted whey exports all year, but going forward the U.S. is likely to gain marketshare around the globe. While U.S. exporters typically compete with their European peers, Europe is suddenly the destination of choice for US whey product shipments,” Sharp says.

The latest Margin Watch (MW) from Chicago-based Commodity and Ingredient Hedging LLC. Stated, “Dairy margins were relatively flat over the first half of June as lower milk prices and feed costs were largely offsetting. With expanding milk production, there has been a significant boost in dairy product output although strong exports are helping to limit a surge in inventories.

“USDA’s Dairy Products report showed April butter production was up 4.5 percent from last year, with cottage cheese output up 16 percent and full-fat ice cream up 5.5 percent from 2025. Total cheese output was 1.7 percent higher than April 2025, with Cheddar production down 3.5 percent from last year but Mozzarella production up 2.1 percent. April milk powder output was the highest since 2023 at 216.9 million pounds, with combined nonfat dry milk and skim milk powder production up 9.4 percent from last year. Total powder inventories increased 25 million pounds from March to 253.4 million pounds, though that was still down 6.9 percent from April 2025. While milk powder inventories were relatively tight in February and March, which helped contribute to the strong price surge, stocks were no longer tight by April due to increased production and a slowdown in exports,” the MW stated.

“USDA also reported strong dairy product exports in April, with volumes increasing across nearly every product and growth to several destinations. Cheese exports hit a new monthly record of 141.5 million pounds, up 29.9 percent from last year with shipments to Mexico up 28.2 percent and South Korea up 69 percent. Butter exports were 103.9 percent higher than April 2025 to 21.4 million pounds, with strong shipments to Saudi Arabia, South Korea, Australia and Mexico. US nonfat and skim milk powder exports were also up 9.5 percent from 2025 to 124.3 million pounds,” the MW concluded.

Meanwhile, the USDA’s monthly Livestock, Dairy, and Poultry Outlook, issued June 17, mirrored milk price and production projections in the June 11 World Agricultural Supply and Demand Estimates report.

“The dairy herd is projected to continue to expand in 2027,” the Outlook stated. “Both dairy margins over feed costs and demand for beef-on-dairy calves are expected to stay robust throughout the second half of 2026, which in turn have a lagged impact on the size of the dairy herd in 2027.”