Milk Prices Improve as Volatility Builds into Spring

manage risk as milk price volatility increases.

Dairy farmer 1280x720.jpg

Market Day Report

NASHVILLE, TENN. (RFD NEWS) — Milk prices are improving in early 2026, but growing supplies and shifting product markets are setting the stage for increased volatility in the months ahead.

Analysis from Terrain economist Ben Laine shows Class III milk prices are expected to average $17 per hundredweight in the second quarter, while Class IV is projected near $19.50. That outlook reflects stronger-than-expected price movement early in the year, despite a global oversupply of milk entering 2026.

Production remains a key pressure point. U.S. milk output rose 2.8 percent in 2025, with continued growth into early 2026 supported by a larger herd and higher yields. January production was up 3.4 percent year over year, and reports of milk dumping in California highlight capacity constraints in some regions.

Recent price strength has been driven by gains in whey and nonfat dry milk, tied to strong global protein demand. At the same time, exports remain critical, with U.S. dairy shipments valued at $9.51 billion in 2025, helping balance growing supplies.

With supply expanding and product markets shifting, price swings are expected to remain elevated through the year.

Farm-Level Takeaway: Manage risk as milk price volatility increases.
Tony St. James, RFD NEWS Markets Specialist
Related Stories
Over 94 percent of U.S. dairy farms are family-owned, carrying forward a legacy built over generations that supports three million jobs and generates more than $40 billion in wages.
“Milk is the most nutritious drink known to mankind.”
On the radar right now are the Farm Service Agency, NRCS, and the Forest Service.
A Southern mac and cheese recipe that cuts like a casserole? Yes, please! The extra cheese is optional, but your family will thank you for it.
Paula Deen’s legendary Not Yo’ Mama’s Banana Pudding is an irresistible, easy, no-bake dessert recipe topped with decadent Chessmen butter cookies and a dollop of homemade whipped cream.

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

LATEST STORIES BY THIS AUTHOR:

U.S. aquaculture may gain competitive ground as harmful subsidies are phased out abroad, but producers should monitor shifts in import supply chains and trade enforcement closely.
Producers may need to prepare for margin pressure in livestock feeding, while dairy farmers could benefit from stronger product demand.
Farmers await concrete trade commitments from China. Until then, export prospects for soybeans, corn, and sorghum remain uncertain against strong South American competition.
National Sorghum Producers CEO Tim Lust said farmers face a challenging year with strong supply, murky trade conditions, and uncertain access to their largest market: China.
RFD-TV Markets Expert Tony St. James breaks down the state of agribusiness and harvest progress across the U.S. for the week of Monday, September 15, 2025.
U.S. trade talks with China resume, but meat industry leaders say dealing with shifting demand and market uncertainty is nothing new in this side of the ag sector.