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
Smaller exporter crops and lower global stocks could keep wheat markets sensitive to weather, trade, and shifts in demand.
National Pork Board’s Andy Tauer discusses the growing popularity of the Boston Butt Pork Burger and key topics at the USMEF Spring Conference.
Smith’s Farm Market now draws visitors with produce, flowers, and homemade ice cream.
Ashley Stockwell discusses representing dairy farmers during one of motorsports’ most recognizable traditions.

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:

EU simplification may reduce some paperwork, but U.S. exporters still face costly traceability requirements.
Lower wheat production, smaller stocks, and higher projected prices explain the rally and put more attention on Plains crop conditions.
U.S. grain export inspections stayed solid for the week ending May 7, with corn still leading the export pace and soybeans posting a strong weekly rebound.
U.S. beef imports are running at a record pace while exports are falling, reflecting tight domestic cattle supplies and high U.S. beef prices.
ASFMRA’s Chad Hertz joins us to discuss farmland trends, economic pressures facing producers, and how outside influences are shaping today’s land market.
Cattle analysts say the U.S. beef cattle herd rebuild still faces major hurdles despite some minor positive signals noted in certain regions.