USDA Forecasts Stronger U.S. Milk Output and Price Adjustments
The U.S. Department of Agriculture (USDA) has released its latest milk product class and price forecast for 2025 and 2026, offering new insights into the dairy sector’s economic trajectory. According to World Agricultural Outlook Board Chair Mark Jekanowski, the outlook includes significant upward revisions in production and modest shifts in commodity and class prices.
Milk Production Forecast Increases
USDA now forecasts an increase of 500 million pounds in milk production for 2025 and an even more substantial 900 million-pound gain in 2026. These upward revisions are driven by factors including herd productivity and favorable market conditions.
Product Prices Adjusted Higher—Except for Cheese
While most dairy product prices saw increases, cheese stands out as the exception:
- Cheese price forecast was slightly lowered by two cents per pound, to $1.84 per pound in 2025.
- The reduction reflects new production capacity coming online, leading to increased supply and price pressure.
- Despite the price dip, the added capacity enhances U.S. competitiveness in export markets.
Other dairy products such as butter, nonfat dry milk, and dry whey saw price increases, buoyed by strong domestic demand.
Class 3 and Class 4 Price Forecasts
- Class 3 Price (2025): Decreased by $0.15 per hundredweight, due to the downward adjustment in cheese prices.
- Class 4 Price (2025–2026): Increased, aligned with stronger product prices across the board.
These updates suggest continued market strength outside the cheese category, with firm support for other key dairy commodities.
All Milk Price Forecasts Raised
- 2025 All Milk Price: Now projected at $22.00 per hundredweight, up $0.05 from previous forecasts.
- 2026 All Milk Price: Raised $0.35 to $21.65 per hundredweight.
These price increases signal a positive outlook for dairy farmers, indicating stable returns amidst expanding production.
Outlook
The updated USDA forecast suggests a resilient and growing U.S. dairy industry, supported by rising production, healthy domestic demand, and expanding export potential. While cheese faces downward price pressure from increased supply, the broader market outlook remains strong.
Stay tuned to Southeast AgNet and USDA releases for continued updates on dairy economics and market trends.