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USDA projects more milk production, dairy trade, and higher 2026 milk prices

The USDA’s May supply and demand report predicts higher milk production, more domestic use of dairy products, and more imports and exports.

The report released Tuesday says the U.S. dairy herd is stable, even though it is around 200-thousand more cows than a year ago.  Production per cow is also expected to rise.

The 2026 price forecasts for cheese, nonfat dry milk, and whey are higher compared to April, but butter price projections are lower. The Class III milk price projection for 2026 was raised on increased cheese and whey prices. The Class IV price also went up, as USDA expects higher nonfat dry milk prices will more than offset the effect of lower butter prices. The all-milk price for 2026 is now $21.25 per cwt

Prices for cheese and butter in 2027 are expected to rise, but whey and nonfat dry milk prices are expected to fall.  As a result, the Class III price is forecast to be higher and the Class IV price lower in 2027, with the all-milk price in 2027 forecast to drop to $20.95 per hundredweight.

Commercial milk exports and imports in 2027 are forecast to be higher than in 2026 on both a fat basis and a skim-solids basis.  USDA says exports will benefit from additional overseas cheese and whey sales, while U.S. customers will find more imported cheese and milk proteins.