Dairy Output Rises While Prices And Margins Weaken

Dairy farmers are expected to face strong output and export gains, but lower prices and tighter margins will persist into next year.

WASHINGTON (RFD-TV) — The U.S. Department of Agriculture (USDA) Dairy Market Report for September (PDF version) shows U.S. milk production climbed three percent year-over-year this summer, with milk solids up nearly four percent.

Strong cow numbers and per-cow yields boosted supplies, while butter output rose eight percent and cheddar production increased more than eight percent.

Despite growth, prices slipped as July’s all-milk average fell to $20.80 per hundredweight, down $2.00 from a year earlier. Feed costs also eased, but the Dairy Margin Coverage margin narrowed to $10.94.

On the demand side, domestic commercial use of all dairy products rose 2.2 percent, driven by yogurt and skim milk powders, though cheese use dropped two percent. Exports accounted for 17.8 percent of milk solids, the highest share since 2023, with butter shipments up 144 percent and cheddar exports up 83 percent. Imports remained below four percent, with butter and cheese both down sharply.

Looking forward, USDA raised milk production forecasts through 2026 but trimmed Class III, Class IV, and all-milk price projections, citing continued heavy supply pressure.

Tony’s Farm-Level Takeaway: Dairy farmers are expected to face strong output and export gains, but lower prices and tighter margins will persist into next year.

Related Stories
The investigation does not prove wrongdoing, but it raises federal scrutiny of a major cost center for crop producers.
The state-level focus is split between labeling and sales restrictions.
The reports cover biodiesel, diesel, gasoline grades, ethanol, aviation fuel, kerosene, and specialty fuels.
Farm Bureau economist Dr. Faith Parum says agriculture still needs to see U.S. products actively moving into China.
Farm CPA Paul Neiffer says producers forced to sell livestock due to drought may have several tax options available.
Ted Odle discussed buyer demand, current pricing trends and upcoming summer and fall cattle offerings.

LATEST STORIES BY THIS AUTHOR:

Textile strategist Robert Antoshak says responsible fashion is not dead, but voluntary sustainability language is not enough on its own.
The pricing signals come as biofuel and corn groups continue to press Congress for permanent nationwide E15 access.
The proposed merger between Union Pacific and Norfolk Southern would create the nation’s first transcontinental railroad connecting the East and West coasts under a single carrier.
USDA Elevates “Plant Not Plastic” Initiative and Supports Buying American Cotton Act
North Dakota State University’s Dr. Shawn Arita joins us to break down new research on U.S. ag export losses tied to retaliatory tariffs and what they signal for trade moving forward.
Soybean oil is already feeling the pressure.
Agriculture Shows
Champions of Rural America is a half-hour dive into the legislative priorities for Rural America. Join us as we interview members of the Congressional Western Caucus to learn about efforts in Washington to preserve agriculture and tackles the most important topics in the ag industry on Champions of Rural America!
Farm Traveler is for people who want to connect with their food and those who grow it. Thanks to direct-to-consumer businesses, agritourism, and social media, it’s now easier than ever to learn how our food is made and support local farmers. Here on the Farm Traveler, we want to connect you with businesses offering direct-to-consumer products you can try at home, agritourism sites you can visit with your family, and exciting new technologies that are changing how your food is being grown.
Featuring members of Congress, federal and state officials, ag and food leaders, farmers, and roundtable panelists for debates and discussions.
RFD-TV has partnered with a handful of agricultural social media influencers whom we have dubbed The New Crop. These folks have taken to the internet to tell their stories and to raise awareness of where our food comes from and all that goes into feeding the world population.