USDA Reduces 2027 Output Estimates
Published: Friday, August 21, 2026
The Agriculture Department left its 2026 milk production estimate unchanged in this week's World Agricultural Supply and Demand Estimates (WASDE) report, but lowered its 2027 estimate. Based on the latest Milk Production report, cow inventories were raised for 2026 and were unchanged for 2027. Output per cow was reduced slightly for both 2026 and 2027.
2026 production and marketings remained at 236.6 and 235.6 billion pounds, respectively. If realized, both would be up 4.9 billion pounds, or 2.1%, from 2025.
2027 production and marketings were projected at 238 and 237 billion pounds, respectively, down 100 million pounds on both. If realized, both would be up 1.4 billion pounds, or .6%, from 2026.
Commercial export forecasts for 2026 were lowered on a skim-solids basis primarily on reduced shipments of lactose and nonfat dry milk (NDM) but increased on a fat basis on increased shipments of butter. Exports for 2027, on a skim-solids basis, were lowered on reduced shipments of NDM, while exports on a fat basis were raised on increased shipments of butter and cheese.
Imports were increased on both a fat and skim-solids basis for 2026 due to increased shipments of butter, cheese, and milk proteins. Imports were also increased on a skim-solids basis for 2027 on increased shipments of milk proteins and prepared foods. Imports, however, were decreased on a fat basis on the expectation of reduced imports of butter in 2027.
Price forecasts for 2026 were decreased for butter and NDM but increased for cheese and whey. As a result, the Class III milk price forecast was raised, and the Class IV price was lowered.
The Class III price is now projected to average $16.25 per hundredweight, up a dime from last month's report, and compares to $18.01 in 2025 and $18.89 in 2024. The 2026 Class IV is estimated at $18.15, down 25 cents from a month ago, and compares to $17.38 in 2025 and $20.75 in 2024.
Last Thursday's Class III futures settlements had the August contract at $16.59 per hundredweight; September, $17.33; October, $17.51; November, $17.48; and December was at $17.52. If realized, the 2026 average would be $16.45.
Dairy product price forecasts for 2027 were lowered for butter, increased for whey, and unchanged for cheese and NDM. Consequently, the Class III price was increased and the Class IV price was lowered.
The 2027 Class III is expected to average $17.25 per hundredweight, up 20 cents from last month's estimate. The Class IV was projected at $17.20, down 20 cents from last month's projection.
The U.S. corn outlook is for lower supplies, unchanged domestic use, larger exports, and smaller ending stocks. Corn production was forecast at 16 billion bushels, up 13 million from last month with a 1.2-million acre increase in harvested area that was largely offset by a reduced yield forecast.
This would be the second largest U.S. corn harvest on record. The season's first survey-based corn yield forecast was down 2.3 bushels per acre from last month to 180.7 bushels per acre. Corn beginning stocks were lowered 75 million bushels to 1.9 billion, reflecting raised exports for 2025-26.
Total U.S. corn use for 2026-27 was forecast 75 million bushels higher to 16.3 billion. Exports were raised 75 million bushels to 3.3 billion, reflecting increased global demand and constrained exports for Ukraine. Ending stocks were lowered 137 million bushels to 1.7 billion. The season-average corn price was raised 10 cents to $4.50 per bushel.
Soybean production was projected at what would be a record 4.5 billion bushels, up 44 million due to a higher harvested area and a slightly lower yield. Harvested area was revised up 1.4 million acres from the July projection to 85.8 million. The first survey-based soybean yield forecast of 52.7 bushels per acre was .3 bushels below last month's projection and last year's record yield. Soybean supplies for 2026-27 were projected up 39 million bushels from last month as higher production is partly offset by lower beginning stocks.
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