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.
Low prices are painful now, but production response could support stronger milk markets later in 2026.
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