Dairy farmers and the entire industry continue to deal with a high-price, high cost environment unlike any seen for at least a decade, and in many ways, not in the past four decades. March and April set consecutive all-time highs for the monthly average all-milk price in the U.S., while the four federal order class prices set a collective record in May. Monthly retail prices of whole and lowfat milk, butter, ice cream and yogurt also reached all-time highs. Meanwhile, monthly U.S. dairy exports posted a strong recovery in April from a recent low in January, amounting to 18.7 percent of U.S. milk solids production, the third highest ever for a single month by this measure. The combination of continued lower U.S. cow numbers, milk production and record-high milk and retail dairy prices is beginning to show signs of impacting domestic dairy product consumption at retail and also food service. However, since retail price inflation is occurring for all food and beverages, and throughout the entire economy, it is unclear how or whether this will play out differently than if higher dairy product prices were an exception in an overall non-inflationary economy.