LUBBOCK, Texas (RFD-TV News) — Dairy producers are facing a more difficult margin outlook as weaker milk prices, falling beef-cross calf values and higher feed costs begin eroding several revenue advantages, according to Terrain analyst Ben Laine.
Beef-cross calf sales have added the equivalent of about $5 per hundredweight to milk revenue for many dairies, but day-old calf prices have fallen roughly 25% from their peak. Values remain historically strong but are providing less support.
Milk prices are also under pressure. The U.S. all-milk price averaged $19.78 per hundredweight during the first half of 2026, down $2.46 from a year earlier. Milk production increased about 3.2% through July, with the cow herd roughly 200,000 head larger.
Feed costs are moving higher as well. December corn and soybean meal futures have climbed about 15% from summer lows, while fuel and interest expenses remain elevated.
Laine says the combination of weaker milk and calf revenue with higher operating costs will require producers to manage margins more actively.
