More Cows, More Milk Expected in 2025, USDA Says
Published: Friday, June 20, 2025
The following is from Lee Mielke, author of a dairy market column known as "Mielke Market Weekly."
The Agriculture Department raised its 2025 and 2026 milk production forecasts from last month in its latest World Agricultural Supply and Demand Estimates (WASDE) report, based on the latest milk production data showing increased cow numbers for 2025 and increased milk per cow for both 2025 and 2026.
2025 production and marketings were projected at 227.8 and 226.8 billion pounds, respectively, up 500 million on both from a month ago. If realized, both would be up 1.9 billion pounds, or .8%, from 2024.
2026 production and marketings were projected at 228.2 and 227.2 billion pounds, respectively, up 300 million pounds from a month ago. If realized, both would be up 400 million pounds, or .2%, from 2025.
Butter, cheese, whey and NDM price forecasts for 2025 were raised from the previous month on recent price strength. Butter, cheese and whey price forecasts for 2026 were raised as strong demand is expected to absorb the growth in milk production. NDM prices were unchanged.
Class III and Class IV milk price forecasts were raised as well. The Class III average was projected at $18.65 per hundredweight, down a nickel from last month's estimate, and compares to $18.89 in 2024 and $17.02 in 2023. The 2026 average was projected at $17.80, up 30 cents from a month ago.
The 2025 Class IV is expected to average $18.85, up 40 cents from last month's estimate, and compares to $20.75 in 2024 and $19.12 in 2023. The 2026 average was estimated at $18.20, up a dime from last month.
This month's corn outlook was little changed from last month, with lower beginning and ending stocks. Corn area and yield forecasts were unchanged. USDA will release its Acreage report on June 30, which will provide survey-based indications of planted and harvested area. Beginning stocks are down 50 million bushels reflecting a forecast increase in exports, according to the USDA.
Exports were raised 50 million bushels, based on reported U.S. Census Bureau shipments through the month of April, inspection data during the month of May, and current outstanding sales. Ending stocks were lowered 50 million bushels to 1.8 billion. The season-average farm price was unchanged at $4.20 per bushel.
Soybean supply, use and price projections were unchanged. The season-average soybean price was forecast at $10.25 per bushel; soybean meal and oil prices were projected at $310 per short ton and 46 cents per pound, respectively.
The USDA's latest weekly slaughter report showed 42,700 dairy cows were sent to slaughter the week ending May 31, down 2,800 from the previous week, and down just 200, or .5%, from a year ago, smallest since early January. Year to date, 1,106,600 head had been culled, down 96,600, or 8%, from a year ago.
Live cattle prices hit new highs, selling at over $1,300 per head, driven primarily by supply-side constraints, according to HighGround Dairy. "Imports of Mexican cattle have been halted due to screwworm concerns, and U.S. inventories remain historically low. Seasonal demand related to grilling season is also contributing to price strength. While dairy cow culling has lagged 2024 levels, current market conditions would yield a sizable return for animals sent to the packinghouse."
HighGround's Curtis Bosma said in the June 16 Dairy Radio Now broadcast that historically, cull cows and beef calves didn't represent a major portion of income but now is running 10-15%. He also pointed out, "We're at the lowest cattle inventory in the U.S. since the 1950s as we saw a lot of heifers get placed on feedlots a couple years back, which reduced the herd. We haven't seen much of a rebuilding since then and as a result, we're seeing this astronomical rise in cattle prices the last couple years." He sees no sign of it stopping any time soon.
Bosma also reported on updates to the Livestock Risk Protection program (LRP) beginning July 1. The LRP is an insurance program dairy producers can use to secure the value of their day-old beef calves and cull cows. He said the timing is great for such a program and his clients are eager to use it.
Meanwhile, the National Milk Producers Federation announced a new program to boost U.S. dairy exports and replace the Cooperatives Working Together program. The announcement followed the federation's board of directors meeting last week, held in conjunction with its annual fly-in of its Young Cooperators who met with members of Congress to discuss their concerns and received a Capitol tour.
The member-funded export assistance program, "NMPF Exports and Trade" or NEXT, begins July 1. "A majority of the milk supplied to consumers worldwide by NMPF members is supporting the NEXT program with a 2 cent per hundredweight contribution through 2028," said an NMPF press release, and will support dairy exports in key global markets, including Latin America, the Caribbean and Asia.
CME Cheddar block cheese closed last Friday the 13th at $1.8375 per pound, down 2 cents on the week, lowest since May 13, and 13.25 cents below a year ago. The barrels finished at $1.8350, 2.50 cents lower, and 18.50 cents below a year ago when they were at $2.02. The week saw 26 loads of block sold and one of barrel.
Milk output varies throughout the Central region, says Dairy Market News. Contacts in the southern portion say high temperatures are contributing to lighter output, but cool temperatures in the upper-Midwest in recent weeks has kept milk output steady. Educational institutions are out for summer break, reducing demand from bottling operations. The additional availability pushed spot prices lower; and were trading $7 to $1-under at mid-week. Cheesemakers continue to run busy schedules. Export demand is strong, as U.S. product remains competitively priced. Domestic demand is light. Inventories are somewhat snug.
Cheese manufacturers in the West indicate milk volumes are meeting needs. Cheese output is steady but availability is mixed among manufacturers. Some convey that, although loads are available, stocks are tighter than anticipated due to newly built facilities not yet producing at full capacity. Domestic demand is moderate to steady. Exports are steady to strong. Some say strong international demand is offsetting weaker domestic demand and governing stock levels.
Lots of butter were sold last week in Chicago, where the price fell to $2.5050 per pound last Tuesday, but rallied to a Friday finish at $2.57, up 1.50 cents, fifth week of gain, but 52 cents below a year ago. There were 135 sales last week, up from 102 the previous week, and the biggest weekly total since the week of Oct. 14, 2024.
Midwest contacts said temperatures remain comfortable for cows, keeping components steady from week-to-week, and leaving plenty of cream available. Southwest temperatures were in the 90s and had a negative impact on milk output and components thus cream was tighter. Churns are active in the region, and some are running full schedules. Some are freezing product to build inventory for use later in the year. Domestic demand is steady. Internationally produced butter remains priced at a premium to Central region product and the price difference is contributing to strong export demand, according to DMN.
Western cream was steady or slightly tighter this week but remained sufficient to cover needs, though not robustly. Multiples were in line with the prior week. Many plants were running churns seven days a week and building inventory. Some noted however that the build is lighter than a year ago due to strong export demand as the U.S. remains competitively priced. Domestic demand is steady.
Grade A nonfat dry milk closed last Friday at $1.2675 per pound, up a half-cent on the week, and .75 cents above a year ago. There were nine sales on the week.
International markets continue to see weakness, accelerated by the weak Pulse, according to StoneX.
The Daily Dairy Report's Sarina Sharp warned in the June 6 Milk Producers Council newsletter, "The U.S. can afford to lose some nonfat dry milk exports due to the multi-year decline in U.S. milk powder production. But exports have dropped roughly twice as fast as output."
Dry whey finished the week 2.75 cents lower, at 55.25 cents per pound, 8.25 cents above a year ago. The whey had seven CME sales on the week.
China has turned to Belarus and New Zealand for its whey needs, according to Sarina Sharp. "If tariffs continue to push China toward other suppliers," she warned, "the U.S. will need to nearly double its exports to all other markets to make up for the loss. China typically accounts for about 40% of U.S. whey powder exports. But domestic demand for high-protein whey products continues to restrain U.S. whey powder output and support prices."
Fluid milk sales are back to their old ways. The USDA's latest data shows April packaged sales at 3.5 billion pounds, down 1.8% from April 2024, and follows a 1.5% slippage in March. Conventional product sales totaled 3.3 billion pounds, down 2% from a year ago. Organic sales, at 251 million pounds, were up .3% from a year ago, and represented 7.1% of total milk sales in the month.
Whole milk sales totaled just under 1.3 billion pounds, up 1.3% from a year ago with a 35.7% market share, and up .4% year to date. Skim milk sales totaled 150 million pounds, down 5.6% from a year ago and down 6.2% YTD.
Packaged fluid sales in the four-month period totaled 14.3 billion pounds, down 1.5% from 2024. Conventional product sales totaled 13.3 billion pounds, down 1.8% from a year ago. Organic products, at 1 billion pounds, were up 2.4%, and represented 7.2% of total milk sales in the four months.
Agriculture Secretary Brook Rollins, in signing last week's WASDE report, also reinstated the July Cattle Report and the County Estimates for Crops and Livestock that the Biden-Harris administration "recklessly cancelled last year." "Farmers and ranchers rely on these critical reports to provide important data needed to make decisions about their operations," Rollins said.
President Trump acknowledged last week that his immigration policies are "ripping long-time workers from the farming and hospitality industries," in a Truth Social post. "Our great farmers and people in the hotel and leisure business have been stating that our very aggressive policy on immigration is taking very good, long-time workers away from them, with those jobs being almost impossible to replace." We await whatever changes Trump will make as a result.
The dairy industry got a big thumbs up from an updated "Dairy Delivers" report, according to the International Dairy Foods Assn. The report "reaffirmed the industry's immense contributions to the nation's economy and quality of life for American families and communities," said the IDFA. "Dairy supports over 3 million American jobs, $198 billion in wages to American workers, and nearly $780 billion in economic impact to the U.S. economy," according to the 2025 analysis.
"The data is clear: dairy runs deep in every community across America," said Michael Dykes, president and CEO of IDFA. "From family-owned dairy farms to processors, retailers, and community businesses, dairy supports livelihoods, sustains local economies, and delivers real value to the people who depend on it. These numbers reflect more than economics, they reflect the reach and relevance of dairy in the daily lives of Americans."
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