USDA Weekly Dairy Market Report Shows Mixed Commodity Prices as Global Market Signals Evolve
July 31, 2026 – The latest weekly dairy market report from the USDA Agricultural Marketing Service highlights a mixed performance across key dairy commodities traded on the Chicago Mercantile Exchange (CME), reflecting shifting supply-demand dynamics in both domestic and international markets.
Butter prices softened during the week, while nonfat dry milk (NFDM) posted gains. Cheese markets displayed mixed trends, and dry whey prices edged lower, underscoring the varied market conditions currently influencing the dairy sector.
Butter Weakens While NFDM Gains
Grade AA butter closed the week at $1.5150 per pound, with the weekly average declining to $1.4470, down $0.0940 from the previous week. The decline reflects ample butter availability despite steady demand across several regions.
Cheese prices moved in different directions. CME barrels closed at $1.5475 per pound, while 40-pound blocks settled at $1.5725. Weekly averages fell to $1.5710 for barrels and $1.5600 for blocks, indicating continued pricing pressure within the cheese segment.
In contrast, Grade A nonfat dry milk (NFDM) strengthened during the week, closing at $1.5600 per pound with a weekly average of $1.4655, representing a $0.0470 increase over the prior week.
Extra-grade dry whey closed at $0.6925 per pound, although its weekly average slipped by $0.0165 to $0.6760.
Regional Milk Production Remains Uneven
Milk production trends continued to vary across the United States.
The Central region experienced a modest increase in milk output following milder weather conditions. However, production volumes and milk component levels remained below those recorded earlier in July.
Western states continued to report seasonally lower milk production, although several dairy-producing areas observed improved farm output after recent periods of extreme heat. California’s Central Valley recorded lower milk volumes compared to June, but production remained above the corresponding period in 2025.
Spot Class III milk trading remained relatively quiet, with premiums ranging from $1 to $5 over Class pricing.
Cream availability also differed by region, with reported multiples ranging from 1.28–1.40 in the East, 1.15–1.45 in the Midwest, and 1.08–1.28 in the West.
Dry Dairy Ingredients Reflect Mixed Supply Conditions
The USDA noted lower prices for nonfat dry milk across regional markets despite stable customer demand.
Meanwhile, whey protein concentrate (WPC 34%) continued to strengthen at the upper end of its price range as limited production and tight inventories supported pricing.
Several manufacturers have concluded seasonal production runs, reducing available supplies and contributing to stronger values for higher-protein whey products.
International Dairy Market Shows Positive Export Outlook
Global dairy markets continue to provide encouraging signals despite ongoing price volatility.
Retail cheese demand across Europe remains healthy, particularly for sliced cheese products. Increased milk production across the European Union is expected to support higher exports of cheese, whey, skim milk powder, and butter through 2026.
In Australia, a major multinational dairy processor announced plans to close one manufacturing facility in early 2027 while consolidating production at two other sites in Victoria.
Trade data for June also showed higher export values for milk powder, butter, and cheese compared with the same month last year, highlighting continued resilience in international dairy trade.
Cold Storage Inventories and Retail Promotions
US refrigerated warehouse stocks continued to reflect balanced supply conditions.
Butter inventories at the end of June were 1% lower than the previous month and 7% below year-ago levels. Natural cheese inventories increased 1% month-on-month but remained 1% below the same period in 2025.
Retail dairy advertising softened overall during Week 31, with conventional dairy promotions declining 11% and organic dairy advertisements falling 4%.
Ice cream emerged as the most heavily promoted conventional dairy product, with advertisements increasing 17% compared with the previous week. Organic milk promotions also strengthened, recording a 27% increase in advertising activity.
Market Outlook
The latest USDA report reflects a dairy market balancing fluctuating commodity prices with improving international demand and evolving regional milk supplies. While butter and cheese markets continue to face pricing pressure, stronger performance in nonfat dry milk and resilient global export demand suggest continued opportunities for dairy processors and exporters. Market participants are expected to closely monitor seasonal milk production, inventory levels, and international trade developments as the second half of 2026 progresses.