USDA boosts 2026 milk output forecast on herd expansion
Higher supply pressures prices despite stronger exports
10 October 2025
1 minute read
By: Lower expected feed costs in the second half of 2025 could support further expansion of the number of milk cows in 2026, according to the US Department of Agriculture's Livestock, Dairy, and Poultry Outlook for September. The higher forecast for the dairy herd in 2025 is projected to extend into 2026, averaging 9.475 million head, 5,000 more than the last month’s projection. The yield per cow is also revised upward by 85 pounds to 24,415 pounds. Milk production for 2026 is projected at 231.3 billion pounds, 0.9 billion pounds higher than last month’s forecast.
The dairy import forecasts for 2026 have been revised downward from the previous month’s forecast to 8.3 (-0.6) billion pounds on a milk-fat basis, and to 7.1 (-0.1) billion pounds on a skim-solid basis. Declines in imports are anticipated to continue across most dairy products in 2026.
Exports forecasts for 2026 are revised upward from the previous forecast on a milk-fat basis but are unchanged on a skim-solids basis. On a milk-fat basis, dairy export volumes are forecast at 13.9 (+1.1) billion pounds, while on a skim-solids basis, exports are projected at 48.9 billion pounds. The forecast revisions are supported by higher expected exports across most dairy products except for SMP/NDM and lactose.
The domestic use forecast for 2026 is raised on a skim-solids basis and decreased on a milk-fat basis from the last forecast. On a milk-fat basis, domestic use is projected at 224.6 (-1.0) billion pounds. On a skim-solids basis, domestic use is forecast at 188.9 billion pounds, 1.8 billion pounds higher than last month’s projection.
With higher expected milk production, the 2026 forecasts for wholesale dairy product prices are revised lower. The adjusted wholesale dairy product price forecasts for 2026, in dollars per pound, are as follows: Cheddar cheese $1.775 (-3.5 cents), butter $2.245 (-30.5 cents), NDM $1.220 (-3.5 cents), and dry whey $0.510 (-0.5 cents).
The revised 2026 forecast for Class III milk is $17.40 per cwt, $0.45 lower than the previous forecast while the Class IV price is forecast at $17.25 per cwt, $1.60 lower than the previous projection. The all-milk price for 2026 is now forecast at $20.40 per cwt, down $1.50 from last month’s forecast.
