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Why It Matters for Idaho Dairy Producers
Idaho ranks among the nation’s leading dairy states, and shifts in federal milk pricing directly affect the bottom line for farms across the Magic Valley and beyond. The latest federal order data shows both Class III and Class IV milk prices trending upward — welcome news for producers who have faced margin pressure over the past year.
What Happened
The U.S. Department of Agriculture announced the May federal order Class III milk price at $16.92 per hundredweight, a 10-cent increase over April and the strongest Class III result since November 2025. Despite the monthly gain, the price still sits $1.65 below where it stood in May of last year.
The Class IV price posted an even sharper jump, reaching $22.32 per hundredweight for May — up $2.10 from April and $4.19 above the same month in 2025. That figure marks the highest Class IV price recorded since November 2022, representing a significant improvement for producers in the butter and dry milk powder segment.
By the Numbers
- $16.92/cwt — May Class III milk price, up 10 cents from April
- $22.32/cwt — May Class IV milk price, highest in more than three years
- $15.89 — five-month average for Class III milk in 2026
- 91.3 million pounds — Idaho cheese output in April, up 6.7% from March
- 1.267 billion pounds — total national cheese production in April, up 1.7% year over year
Idaho Cheese Output Holds Steady
Idaho produced 91.3 million pounds of cheese in April, a 6.7% increase from March. On a year-over-year basis, the state’s output was essentially flat, down just 0.1% from April 2025. Idaho’s production remains well behind Wisconsin’s 305.2 million pounds and California’s 202.3 million pounds, but the month-over-month rebound is a positive signal heading into summer.
Nationally, mozzarella output reached 434.9 million pounds, up 2.1% from a year ago. Cheddar production came in at 329.8 million pounds, falling 3.1% from March and 3.5% below year-ago levels. Butter production totaled 224.4 million pounds, down 1.8% from March but up 4.5% compared to April 2025.
The four-month cumulative cheese total through April reached 4.97 billion pounds, a 2.8% gain over the same period in 2025 — indicating steady demand and robust processing capacity across the industry.
Spot Markets and Futures
On the spot market, CME block cheddar closed June 5 at $1.4725 per pound, a figure that sits 38.5 cents below the same date last year. CME butter closed at $1.6925 per pound, down 86.25 cents from a year ago — a notable gap that underscores how sharply butter prices have retreated despite the improvement in Class IV milk values.
Class III futures as of June 5 suggest continued price improvement through the remainder of the year. June contracts were trading at $16.12, with July at $16.76, August at $17.22, September at $17.76, and November reaching $18.45 — a forward curve that points to strengthening returns for cheese-oriented producers through the fall harvest season.
Zoom Out
The dairy industry across the Mountain West and Pacific Northwest has been navigating input cost pressures and volatile commodity prices over the past two years. A sustained Class III recovery above $17 in the second half of 2026 would offer meaningful relief to Idaho producers managing feed and operating expenses. The USDA recently restored a $59 million grant for University of Idaho farmers, a development that could also help strengthen the research and support infrastructure underlying the state’s agricultural sector.
Federal rural support programs are also expanding. Idaho has begun distributing federal rural health dollars authorized under recent federal legislation, reflecting a broader push to shore up rural economies that depend heavily on agriculture.
What’s Next
Markets will be watching whether Class III prices can sustain their upward trajectory through the summer months. If futures contracts hold and spot cheese markets recover from their year-ago deficit, Idaho dairy farmers could see improved margins by the third quarter. USDA will release subsequent federal order pricing in the weeks ahead.
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