U.S. Milk Output Rises as Class Prices Drop Sharply

Milk output is rising, but steep drops in Class I–IV prices are tightening margins heading into 2026.

NASHVILLE, Tenn. (RFD-TV) — U.S. milk production continues to expand, but dairy producers are facing a very different price environment heading into winter. Recent milk production data (PDF Version) from the U.S. Department of Agriculture (USDA) show national milk output up 3.6 percent from August through October, driven by modest gains in cow numbers and slightly stronger production per cow. At the same time, federal order class prices have weakened considerably, creating a tighter margin picture for many farms.

October’s Class I Base price fell to $18.04 per hundredweight — more than $5 below last year — while Class III and Class IV prices also declined by similar margins. Those declines mirror weaker dairy product prices across most categories and suggest that additional downside pressure may continue into early 2026. USDA’s latest forecast expects next year’s all-milk price to average $1.80 per hundredweight lower.

Regionally, production gains were broad, with most states posting year-over-year increases. Butterfat and milk solids output also continued to rise, adding to the overall supply.

Looking ahead, USDA projects U.S. milk production will increase another 2.4 percent in 2026 as herd stabilization and efficiency gains continue.

Farm-Level Takeaway: Milk output is rising, but steep drops in Class I–IV prices are tightening margins heading into 2026.
Tony St. James, RFD-TV Markets Specialist
Related Stories
A stalled World Trade Organization appeals body increases long-term trade policy risk for U.S. agriculture.
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.
High beef prices are squeezing South Texas restaurants, but Texas Farm Bureau says consumer demand remains strong despite record costs.
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.

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:

manage risk as milk price volatility increases.
Strong beef demand is offsetting weaker cash cattle.
Brazil logistics issues may support U.S. soybean demand.
AFBF Economist Danny Munch breaks down a new Farm Bureau analysis showing that producers now earn less than 6 cents of every food dollar, as farm input costs continue to squeeze margins.
Productivity gains are supporting supply despite limited herd expansion.
Brooks York with AgriSompo addresses how current market conditions and risk management are impacted by volatility in the Middle East, and considerations for farmers in the spring planting season.