NASHVILLE, TENN. (RFD-TV) — U.S. milk production surged over the summer, climbing 3.6 percent year-over-year during June through August, while milkfat output jumped 5.3 percent, according to the latest Dairy Market Report from the National Milk Producers Federation.
Dairy cow numbers rose to 9.5 million head, and per-cow output averaged 6,153 pounds for the period — reflecting both strong productivity and rising milkfat composition, now averaging 4.2 percent.
Despite record-high production, fluid milk sales fell by four percent in August from a year earlier and 1.7 percent for the quarter, underscoring weak consumer demand. The all-milk price averaged $20.90 per hundredweight, modestly higher than July, while feed costs dropped enough to lift the Dairy Margin Coverage (DMC) margin to $11.52 per hundredweight. Still, retail dairy inflation remains mild — up just 0.7 percent from last year — compared with three percent overall food inflation.
Butter inventories declined 6 percent year-over-year, while American cheese stocks rose 3 percent. Wholesale butter prices tumbled to $2.04 per pound, down more than a dollar from last August, dragging Class II, III, and IV milk prices lower across the board. Analysts say margins may tighten again into late 2025 as milk output continues to expand faster than consumption, though international demand could lend some support.
Farm-Level Takeaway: High milk production and soft retail demand are squeezing prices and margins — making careful feed and risk management essential through year-end.
Tony St. James, RFD-TV Markets Expert
President Donald Trump speaks at the World Economic Forum in Davos, addressing SNAP spending, tariff threats against Europe, market reactions, and the upcoming USMCA review.
January 21, 2026 11:50 AM
·
Corn and wheat exports remain a demand bright spot, while soybeans are transitioning into a more typical late-winter shipping slowdown.
January 21, 2026 10:36 AM
·
From meatpacking settlements to landmark NEPA rulings, Roger McEowen outlines the top legal developments in 2025 that will shape agriculture in the years ahead.
January 20, 2026 03:39 PM
·
Alan Bjerga with the National Milk Producers Federation joined us to review new policies and regulations supporting the dairy industry and what they mean for the year ahead.
January 20, 2026 03:25 PM
·
Despite rising costs and growing food insecurity, meat demand remained strong in 2025 as higher-income consumers offset cutbacks elsewhere. Economists break down the K-shaped economy, upcoming USDA cattle reports, livestock production outlooks, and renewed debate over beef imports and country-of-origin labeling heading into 2026.
January 20, 2026 02:47 PM
·
Livestock strength is carrying the farm economy, while crop margins remain tight and increasingly dependent on risk management and financial discipline.
January 19, 2026 05:00 PM
·
