USDA Ups Milk Production Estimates for 2026, 2027
Published: Friday, July 17, 2026
The Agriculture Department again raised its 2026 and 2027 milk production estimates in last Friday's World Agricultural Supply and Demand Estimates, based on the latest Milk Production report and raised cow inventories for both years. Output per cow was reduced slightly for 2026 but unchanged for 2027.
Production and marketings for 2026 were projected at 236.6 and 235.6 billion pounds, respectively, up 200 million pounds on both from a month ago. If realized, both would be up 4.9 billion pounds, or 2.1%, from 2025.
The 2027 production and marketings were projected at 238.1 and 237.1 billion pounds, respectively, up 1.1 billion on both. If realized, both would be up 1.5 billion pounds, or .6%, from 2026.
Price forecasts for 2026 were lowered for nonfat dry milk (NDM), cheese and butter due to continuing strong growth in the milk supply. The whey price was unchanged from last month. The Class III and Class IV milk price forecasts were both lowered.
Price forecasts for 2027 were lowered for NDM, cheese,and butter, while the price of whey was unchanged. As a result, the Class III and Class IV price forecasts were both lowered as well.
Class III milk futures prices last Friday morning had the July contract at $15.62 per hundredweight; August, $16.72; September, $17.18; October, $17.63; November, $17.85; and December was at $17.70.
The USDA's latest Crop Progress report showed 16% of the corn crop was silking, as of the week ending July 5, up from 9% the previous week, 1% below a year ago, but 2% ahead of the five-year average. Sixty-seven percent of the crop was rated good to excellent, unchanged from the previous week, but 7% behind a year ago.
Looking at the beans, 34% were blooming, up from 19% the previous week, 4% ahead of a year ago, and 6% ahead of the five-year average. Nine percent were setting pods, up 2% from a year ago, and 3% of the average. Sixty-four percent were rated good to excellent, down 1% from the previous week, and 2% behind a year ago.
Dairy cow culling remains well above a year ago. USDA's latest data shows 49,200 head sent to slaughter the week ending June 27, up 4,100, or 9.1%, from a year ago. Total date stands at 1,353,200, up 65,300, or 5.1%, from a year ago.
Prices on Chicago's LaSalle Street pushed higher last week. Block Cheddar climbed to $1.5650 per pound last Thursday, highest since May 20, but closed the second Friday of July at $1.5475, up 11.50 cents on the week, but still 11.25 cents below a year ago. The barrels closed last Friday at $1.56 per pound, up 8.50 cents on the week, highest since May 14, and 11.50 cents below a year ago. Trading consisted of 21 loads of block on the week and five of barrel.
High temperatures in recent weeks have negatively impacted milk output in the Central region, reports Dairy Market News. Contacts say they are getting fewer spot milk offers. Prices increased slightly last week and ranged from $3-under to $2-over class. Cheesemakers anticipate spot prices to increase in the coming weeks as milk output continues to decline seasonally. Cheese production is steady to stronger, as plants returned to full schedules following the Fourth of July holiday weekend. Retail cheese demand is steady but food service sales remain light. Export demand is strong, but declining cheese prices in Europe are negatively impacting international interest, according to some.
Milk and cream production are lighter in the West but cheese manufacturing is receiving expected milk deliveries. Class III spot milk is available but demand from cheese makers was moderate. Cheese production is stable and keeping pace with demand. Demand from domestic and international buyers is steady, according to DMN.
Cash butter closed last Friday at $1.65 per pound, 1.25 cents higher, but 94 cents below a year ago, with 36 sales posted for the week.
Central region high temperatures were negatively impacting milk output and component levels, says DMN. Cream production is declining week-to-week but remains up from last year. Cream demand picked up following the holiday weekend and cream multiples pushed higher last week. The strongest demand is from Class II manufacturers but some butter makers were purchasing it to keep churns full and build inventory for use later in the year. Domestic butter demand is steady to light. Export demand is strong, but lighter than earlier in the year. Inventories of 82% butterfat butter are snug, according to DMN.
Milk and cream production is lighter in the West but stakeholders say inexpensive spot loads of cream were available. Cream demand from butter manufactures was moderate though churns are active, keeping production and inventories stable. Domestic butter demand varied from steady to somewhat lighter last week, but manufacturers say year-to-date sales are up, especially for bulk butter. Export demand is steady.
Grade A nonfat dry milk fell to $1.4750 per pound last Tuesday, lowest since Feb. 2, but saw its Friday finish at $1.5550, up a nickel on the week, and 28.75 cents above a year ago. There were 70 CME sales.
CME dry whey ended the week at 69 cents per pound, a half-cent higher, and 12.25 cents above a year ago, with only one sale recorded.
The July 9 Daily Dairy Report said, "Whey prices have stayed above 60 cents per pound, a historically high price, since September 2025. A nickel increase in dry whey prices results in a 30 cent per hundredweight increase in the Class III price. With cheese prices in the doldrums, higher whey prices have been providing support to the Class III complex."
Dairy farmers can be grateful that strong exports are helping keep U.S. prices as strong as they are, considering the amount of milk being produced. May exports totaled 574 million pounds, up 13.4% from May 2025, and up .9% from April.
HighGround Dairy said, "More product moved to eight of the U.S.' top 10 export destinations, led by China, where shipments surged 213% from 2025. The sharp year-over-year increase largely reflects an easy comparison, as U.S.-China trade tensions weighed heavily on exports a year ago. Even so, May marked the largest monthly U.S. dairy export volume since June 2025."
Cheese exports hit 135.4 million pounds, up 18.4% from a year ago, and up 23.8% year to date. Butter sailings totaled 21.9 million pounds, up 89.4% from 2025, and up 104.2% year to date.
Nonfat dry and skim milk powder exports fell to 109.5 million pounds, down 20% from a year ago. HighGround says that likely reflects elevated U.S. prices relative to competing exporters. On a 30-day adjusted basis, it was the lowest monthly volume since January 2025, with exports to Mexico down 13.2%.
Dry whey exports, at 60.5 million pounds, were up 112%, highest volume since June 2010. Shipments rose to all of the top 10 destination countries, according to HighGround, with China's purchases up a whopping 437%.
Global dairy prices continued to fall seasonally at last week's Global Dairy Trade, down for the third event in a row. The weighted average dropped 4.9%, following a 2.8% decline on June 16, and .6% on June 2. Volume shot up to 58 million pounds, up from 28.5 million on June 16, and the highest since Jan. 20. The average metric ton price was $3,793, down from $3,979 on June 16.
HighGround Dairy warned in its pre-GDT analysis: "The new dairy season is under way in New Zealand, with another strong run of milk production expected through peak collections. As GDT offer volumes seasonally increase, buyers face less urgency to secure product, making price pressure more apparent."
Cheddar led the declines, down 12.3%, after dropping 3.4% on June 16. GDT Mozzarella, however, was up 3.8%, following a 5% fall last time. Skim milk powder was down 7%, after dropping 3.6%.
Whole milk powder was down 4.4%, following a 3.1% decline. Butter was down 5%, following a 2.4% loss, and anhydrous milkfat was down 3.9%, after seeing a 1% decline. Lactose was down 3.6%, after jumping 4.2% last time. Buttermilk powder was up 8.2%.
Return to Top of Page