Monthly Dairy Comments

by Andrew P. Griffith, Livestock Marketing Specialist

September 30, 2026

Milk Production

Milk production in the 24 major states during August totaled 19.2 billion pounds, up 1.8 percent from August 2025. Production per cow for August averaged 2,070 pounds. The number of milk cows was 9.26 million head, 15,000 more than July 2026. July production was revised down 0.5 percent from preliminary estimates. For milk production in the top 5 producing states, California decreased 0.7% from August a year ago; Wisconsin up 1.5%; Texas up 5.1%; Idaho up 1.6%; and New York up 0.9%. Other states with large production increases were Kansas (13.9%), South Dakota (8.4%), Oregon (7.7%), Georgia (7.0%) and Florida (6.8%). States with large production decreases were Utah (-3.6%) and Arizona (-3.1%).

Milk Price and Utilization

The Southeast Uniform milk price for August was $22.93, down $2.57 from July and $0.62 lower than August 2025. The Appalachian Uniform milk price was $22.71 down $2.69 from July and $0.31 lower than August 2025. August’s Class III price was $16.64, up $1.12 from July, and $0.60 lower than August a year ago. The Class IV price was down $0.98 at $17.36, and $1.14 lower than August 2025. The Class I Mover price for October is $18.88, up $1.84 from September. The milk/feed ratio for August was 2.00, down 0.12 from July.

Southeast Class I utilization was 72.16%, down 1.18% from July and 4.38% lower than August a year ago. The Uniform butterfat price was $1.6378 down 7.54 cents from last month and 117.45 cents lower than August 2025. The August Class I price was $24.56. September Class I price is $22.84. Appalachian Class I utilization was 73.75%, up 0.60% from July, and 0.68% higher than August a year ago. The Uniform butterfat price was $1.6307, down 8.25 cents from last month and 117.56 cents lower than August 2025. The August Class I price was $24.36.

Cheese Production and Stocks

Total cheese production in July was 1.26 billion pounds, up 2.1% from a year ago while butter production was up 5.5% to 189 million pounds. Nonfat dry milk (NDM) production was up 26.6% compared to a year ago with total production at 165 million pounds while skim milk powder (SMP) production was down 50.3% to 22.0 million pounds compared to a year ago. Total cheese stocks at the end of August were up 2% from August a year ago and up slightly from the previous month while butter stocks were down 5% from last month and up 10% from a year ago.

Cow Slaughter

Dairy cow slaughter in August was 221,100 head, down 6,500 head from July and 3,700 head more than August 2025.

Southeast Federal Order Prices

Month	Uniform Price $/cwt.	Class I Price $/cwt.	Class III Price $/cwt.	Class IV Price $/cwt.	Class I % Utilization	Butterfat Price $/lb.
Mar 26	20.95	21.27	16.16	18.94	72.15	1.8993
Apr 26	22.94	24.46	16.82	20.22	70.53	1.9581
May 26	24.31	25.95	16.92	22.32	67.58	1.7926
Jun 26	26.48	27.98	15.98	20.96	73.61	1.7298
Jul 26	25.50	27.13	15.52	18.34	73.34	1.7132
Aug 26	22.93	24.56	16.64	17.36	72.16	1.6378

Appalachian Federal Order Prices

Month	Uniform Price $/cwt.	Class I Price $/cwt.	Class III Price $/cwt.	Class IV Price $/cwt.	Class I % Utilization	Butterfat Price $/lb.
Mar 26	20.64	21.07	16.16	18.94	70.09	1.9116
Apr 26	22.86	24.26	16.82	20.22	73.95	1.9596
May 26	24.02	25.75	16.92	22.32	67.35	1.7914
Jun 26	26.05	27.78	15.98	20.96	72.13	1.7299
Jul 26	25.40	26.93	15.52	18.34	73.15	1.7132
Aug 26	22.71	24.36	16.64	17.36	73.75	1.6307

What is the Market Offering for Milk to be Sold in December?

Ex:  It is Sep. 30 and Dec. Class III milk futures are trading at $15.82. Local Dec. basis estimate is +$3.00.

If December futures				=	17.25	15.75	14.25
and actual blend price				=	20.25	18.75	18.00
Sample Strategies					Realized Prices for December Milk
1) Sold Futures		@	15.82		18.82	18.82	18.82
2) Bought Put	14.75	@	0.20		20.05	18.55	17.55
3) Bought Put	15.25	@	0.36		19.89	18.39	17.89
4) Bought Put	15.75	@	0.60		19.65	18.15	18.15
5) Synthetic Put
Sold Futures		@	15.82
Bought Call	16.75	@	0.10		19.22	18.72	18.72