Producer Pay Forecast: May 29, 2026

U.S. milk production remains firmly in expansion mode.

April output across the 24-major milk producing states increased 2.77% year-over-year.

March milk production was revised upward, to +2.81% YoY.

The 24-state milking herd was up 2.14% YoY in April.

Despite this continued growth, dairy product inventories remain relatively balanced due to export strength. Butter stocks were 8.5% below prior year in April, while total cheese stocks were down 0.9% YoY. However, recent softness in CME spot cheese prices may signal softer export or domestic demand. If cheese exports begin to lose momentum, inventory growth may accelerate and place added pressure on cheese markets in the months ahead. Spot butter has remained rather range bound as prices move to maintain a competitive edge internationally. Nonfat dry milk hit a record high of $2.2950(5/7), before cooling off through mid-May, and popping back up to $2.09 (5/29). Class IV continues to receive support from the strength in nonfat prices, and pay prices are forecasted to continue improving over the next few months.

As always, please feel free to reach out with any questions!

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