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
Rising adoption of GLP-1 drugs may gradually reshape food demand, with potential downstream effects on protein markets and consumer purchasing patterns.
Winter Weather, Drought Shape Early 2026 Farm Conditions
As domestic production and blending slowed, export demand remained a clear bright spot.
Protein markets are fragmenting. Beef is supply-driven and more structurally expensive, whereas pork and poultry remain price-competitive.
Tight fed supplies shift margin risk to packers, strengthening cattle price leverage but increasing volatility.
Expanding chicken supplies are likely to keep prices under pressure in early 2026 despite steady demand growth.

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:

China may no longer serve as a consistent anchor market for U.S. cotton exports. Lewis Williamson of HTS Commodities joined us to discuss the factors influencing planting decisions, river conditions, and what producers are considering as they finalize acreage plans for the season.
Falling commodity prices and rising costs continue to squeeze farm margins. Kip Jacobs with The Mosaic Company addresses fertilizer market pressures, nutrient use efficiency, and strategies growers can consider to protect their fertilizer investment this season.
Weather Swings Shape Early Season Farm Conditions Nationwide
Dry conditions may tighten hay supplies before summer growth. John Mays of Central Life Sciences joined us to discuss the risks of extended grain storage, how quality can be affected over time, and what growers can do to protect their grain while waiting for market opportunities.
Crop value concentration keeps farm income tied closely to commodity price cycles.
High fertilizer costs and global risks threaten spring margins for growers.