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
“It, all of a sudden, says that tracking and fighting hunger is not a priority, apparently, at the federal level.”
In a final rule published in the Federal Register, the Department states that it will no longer base wage rates on the Farm Labor Survey.
Trump’s upcoming talks raise hopes for U.S. soybeans, but China’s record purchases from Brazil and Argentina show America’s market share remains under heavy pressure.
USDA’s report shows wheat strength overall, with winter wheat yields setting records, while spring wheat and rye saw declines. Oats and barley remain constrained by record-low acreage despite stable or rising yields.
Bigger-than-expected corn and wheat stocks are bearish for prices, while soybean figures were neutral. Farmers may face additional price pressure as harvest accelerates.
“MAKE SOYBEANS, AND OTHER ROW CROPS, GREAT AGAIN!”

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:

Rabobank’s outlook signals a tightening margin environment, emphasizing the need for cost control, trade stability, and clearer policy signals heading into 2026.
Treat succession like any major crop — plan early, document clearly, and calibrate cash flow so the next generation can succeed.
Chris Bliley with Growth Energy discusses ongoing concerns about U.S. ethanol exports and the expansion of market access promised under the Phase One deal between the U.S. and China.
With core input inflation still hovering high, growers and retailers should plan pricing and promotions with tighter margins in mind — target early sales, leverage bundle deals, and secure logistics ahead of peak Halloween demand.
The U.S.-China summit raises hopes for stronger exports and reduced barriers, but U.S. ag players should remain strategically cautious until concrete volumes and certifications materialize.
Global agriculture is stabilizing after years of price swings, with flat to modestly rising returns expected as productivity offsets slower demand growth.