Summer slump situation

U.S. dairy prices weakened during June, largely driven by competition in the export market and continued strong growth in U.S. milk production. The July 2026 CME Class III milk price futures peaked at $19.02 on April 27, but by June 25 it was at $15.71. The July 2026 CME Class IV milk futures also lost about $3.00 between June 1 and June 25. This has been a disappointing decline for U.S. dairy farmers.

On the supply side, milk production growth has slowed, but we’re still growing supply faster than domestic demand is growing. Headline U.S. milk production was up 2.4% from last year in May. However, the fat and protein in the milk was strong and, on a component adjusted basis, production was up closer to 3.9%. Long-run growth in domestic consumption averages about 2%. The strong production growth means the U.S. needs to stay competitive in the export market to clear the growing supply into the export market.

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Nate Donnay

July 2, 2026

hoards.com