NASHVILLE, Tenn. (RFD-TV) — U.S. milk production is expected to expand again in 2026, outpacing most major exporters and reinforcing America’s role as the primary driver of global dairy growth, according to the USDA’s latest Dairy: World Markets and Trade report. USDA forecasts U.S. milk production at 106.2 million metric tons, up 1.2 percent from 2025, accounting for most of the net increase among major exporting countries.
The growth reflects continued herd expansion and rising processing capacity in the United States. Strong cheese demand and solid export performance are pulling more milk into plants, encouraging producers to add cows despite higher capital and labor costs. U.S. output gains more than offset modest production declines expected in the European Union and New Zealand.
Outside the U.S., production trends are mixed. Argentina is forecast to post the largest percentage gain, up 4.0 percent in 2026, as pasture conditions and feed availability improve following drought impacts in 2024.
Australia is expected to rebound 1.8 percent, supported by improved rainfall in southern dairy regions and relatively low feed costs, though long-term industry consolidation continues to limit expansion. Conversely, New Zealand output is projected to decline 0.5 percent, as declining cow numbers offset strong milk prices and export demand.
European Union milk production is also forecast to decline by 0.5 percent for the second consecutive year, as environmental regulations, disease pressure, and herd contraction outweigh gains in milk per cow.
Collectively, milk production among major exporters is expected to be 0.4 percent higher in 2026, with the United States accounting for most of the increase.
Farm-Level Takeaway: U.S. dairy producers remain the primary growth engine globally, while tightening supplies in Europe and New Zealand could support export demand for American dairy products.
Tony St. James, RFD-TV Markets Specialist
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