U.S. Milk Output Leads Global Growth into 2026

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.

WTFCF_S4E3_BTS_3_hickory-hill-milk_bottling-plant_1920x1080.jpg

The bottling line at Hickory Hill.

The bottling line at Hickory Hill. (Photo by Donna Sanders, Where the Food Comes From)

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
Related Stories
Analysts warn the closed U.S.-Mexico border is straining cattle supplies and packing capacity. StoneX and USDA data point to long-term industry shifts.
USDA’s 2026 Food Price Outlook projects food prices rising 3.1%, with higher beef costs and falling egg prices shaping consumer trends.
Alan Bjerga of the National Milk Producers Federation discusses the Dairy Margin Coverage program, recent improvements, and what producers need to know ahead of this week’s enrollment deadline.
Higher output keeps milk supplies ample, reinforcing expectations for softer dairy prices even as feed costs remain favorable.
RFD Farm Legal & Tax expert Roger McEowen shares guidance on the 45Z Clean Fuel Production Credit, its impact on renewable energy and agriculture, and what producers should know moving forward.
Border closures tied to the threat of New World Screwworm continue to stall Mexican fed cattle imports, tightening U.S. feeder cattle supplies over time — triggering feedlot closures that hinder herd rebuilding efforts, threaten the beef supply chain, and shrink production while consumer prices stay elevated.

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:

Farm legal expert Roger McEowen discusses a new rail antitrust case in Kansas and its potential implications for farmers as rail upgrades signal continued export-driven demand for logistics.
Surging energy markets are quickly becoming a cost story for U.S. agriculture as crude oil climbs on supply fears tied to the Middle East conflict.
Strike risk adds volatility to already tight markets.
Technology-driven lending decisions may shape the future availability of farm credit.
Logistics remain firm, but freight costs continue to rise.
Strong corn demand and cotton shipments support export outlook.