USDA Dairy Forecast Shows Rising Production and Lower Milk Prices Through 2026
The USDA has released its latest dairy forecast, offering important updates for producers, processors, and industry watchers. According to the report, “USDA has released the dairy forecast for price and production, and World Agricultural Outlook Board Chairman Mark Jackanowski provides more details on the report.” The new data highlights record-level dairy cow numbers, accelerated growth in milk yields, and notable shifts in all-milk price expectations for 2025 and 2026.
Jackanowski explains that, “We’re looking at the highest dairy cow inventories since the 1990s and also very strong growth in milk per cow as well. So our 2025 milk production forecast was raised one and a half billion pounds this month to 231.4 billion pounds.” This sharp increase reflects both herd expansion and productivity gains, signaling a robust supply outlook.
The forecast anticipates even stronger output heading into the following year. As noted, “We increased it even further into 2026, raised the forecast by three billion pounds to 234.3 billion. So pretty large milk supplies, when you have those large milk supplies, that also tends to mean larger supplies of dairy products.” The growth in dairy product availability is expected to influence both domestic markets and export dynamics.
One segment showing continued resilience is dry dairy products. Jackanowski emphasizes that, “One area of strength in terms of dairy products that we continue to see is some of the dry products, strong demand for protein, that’s supporting a lot of dry products, especially dry whey.” Global demand for protein ingredients remains a key driver in this category.
However, the expanded supply comes with downward pressure on prices. According to the report, “And on the 2025 all-milk price? Down this month by 30 cents per hundredweight, down to $21.05 per hundredweight.” Further declines are expected in 2026: “For 2026, the all-milk price was lowered by $1.15 per hundredweight to $19.25, and year-over-year, that would be down $1.80 per hundredweight.”
Overall, the USDA dairy forecast signals a high-production, lower-price environment, underscoring the importance of strategic planning for producers navigating the evolving dairy landscape.
Audio Reporting by Dale Sandlin for Southeast AgNet.