Rural Rundown: Tony’s Top 5 Takeaways from the USDA Agricultural Outlook Forum

Farmers may see only limited price relief in the coming marketing year as world cotton demand edges higher, but structural headwinds remain.

USDA’s Agricultural Outlook Forum projects 2026/27 global cotton production falling 3 percent to 116.0 million bales while consumption rises to 120.1 million bales. Lower stocks are expected to nudge prices upward, with the A-Index near 78 cents per pound. However, long-term demand growth continues to lag synthetic fibers, which have steadily captured market share in textile manufacturing.

U.S. plantings are forecast at 9.4 million acres, producing about 13.6 million bales — slightly smaller than last season. Exports are expected to improve to 12.2 million bales as foreign demand strengthens, while domestic mill use remains historically low at 1.6 million bales due to overseas manufacturing competition.

Ending stocks are projected near 4.2 million bales, supporting an average farm price around 63 cents per pound.

Weather in the Southwest and global economic growth will largely determine whether prices strengthen further.

Grain producers enter the 2026 season with slightly firmer price expectations as supplies tighten modestly across major crops.

USDA projects the U.S. corn crop at 15.8 billion bushels with ending stocks at 1.84 billion bushels. Soybean production is forecast at 4.45 billion bushels with ending stocks near 355 million bushels. Wheat output is projected at 1.86 billion bushels, and ending stocks at 933 million bushels. Sorghum was not included in this initial interagency outlook release.

Operationally, acreage shifts drive much of the change. Corn planted area drops to 94 million acres while soybean acres expand to 85 million due to stronger relative returns. Lower corn exports and feed demand tighten stocks, while higher soybean crush — supported by renewable diesel demand — keeps oilseed use elevated.

Regionally, competition from South America pressures corn and soybean exports, and larger global wheat supplies cap U.S. export growth despite reduced domestic production.

Prices improve only slightly: corn averages $4.20, soybeans $10.30, and wheat $5.00 per bushel.

Dairy producers face a margin squeeze in 2026 as lower milk prices offset cheaper feed and slightly higher output.

USDA projects U.S. milk production at 234.5 billion pounds, up 1.3% from last year. The January 1 dairy herd totals 9.568 million cows, larger than 2025, but herd growth is expected to slow later in the year as weaker milk prices discourage expansion and replacement heifers remain scarce.

Operationally, favorable feed costs — including corn, soybean meal, and hay near five-year lows — support production efficiency. Output per cow continues rising while improved genetics increase milkfat and protein levels. Many dairies also rely more on beef-on-dairy calves as an added revenue stream while feeder cattle prices stay historically strong.

Trade flows expand in both directions. The United States remains competitive exporting butter and cheese while importing specialty dairy products demanded by consumers. Domestic dairy consumption also increases modestly.

Prices weaken as supply outpaces demand. The all-milk price is forecast at $18.95 per cwt, down from $21.17 in 2025.

ARLINGTON, Va. (RFD NEWS) —

(Tags: USDA Outlook Forum, Dairy, Milk Production, Prices, Livestock Economics)

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(Tags: USDA Outlook Forum, Corn, Soybeans, Wheat, Supply Demand, Prices)

(Tags: USDA Outlook Forum, Sugar, Sweeteners, Trade, Mexico, Food Demand)

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Sugar supplies tighten slightly as production slips and imports grow to meet steady food demand.

USDA projects 2026/27 U.S. sugar production at 9.235 million short tons raw value, down about 2%. Beet sugar totals 5.021 million tons, as acreage and yields stabilize near recent averages. Beginning stocks fall sharply to 1.940 million tons, while ending stocks drop to 1.721 million, pushing the stocks-to-use ratio down to 14.1 percent.

Operationally, imports rise to 2.751 million tons, including 529,000 tons from Mexico, to help balance supply. Domestic deliveries remain steady near 12.05 million tons as food demand holds, but face uncertainty from changing diets and from GLP-1 weight-loss drugs reducing consumption growth.

Regionally, Florida and Louisiana cane output eases slightly from last year’s record levels. Mexico’s production of nearly 5.3 million metric tons allows it to meet domestic needs and U.S. trade commitments.

Livestock producers head into 2026 with cheaper feed, but tighter cattle supplies are shaping markets across the protein sector.

USDA forecasts total red meat and poultry production at 108.4 billion pounds, up 1 percent. Beef output declines again as the cattle herd shrinks to 86.2 million head, the seventh consecutive year of contraction. However, higher pork, broiler, turkey, and egg production offsets the drop. Beef prices stay strong, with fed cattle averaging $240 per cwt and feeder calves near $364 per cwt as supplies remain tight.

Operationally, lower corn, soybean meal, and hay prices improve feeding margins. Hog production rises nearly 3 percent on improved productivity, while broiler and turkey output expands modestly as disease pressures ease. Egg production rebounds 6% after avian influenza losses last year.

Trade adjusts to supply shifts. Beef exports fall but imports rise to cover lean processing demand, while pork exports improve slightly on better competitiveness.