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
Cattle imports from Mexico remain stalled amid the New World screwworm outbreak. At the same time, Tyson closures add pressure on Nebraska producers and markets ahead of the USDA’s upcoming Cattle on Feed Report.
Record yields and exceptionally low BCFM strengthen U.S. corn’s competitive position in global markets.
Water access—not acreage alone—is driving where irrigation expands or contracts.
Mike Steenhoek, with the Soy Transportation Commission, shares his outlook on current grain stocks and transportation lines amid bumper crops filling bins across the United States.
The FAO Food Price Index for November fell by more than 1 percent in November, marking the third straight month of declines.
Rooster is a full-time farmhand, right-hand man on Shawn Raff’s cattle and dairy operation in Eatonton, Georgia.

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:

Lower oil prices may trim input costs but pressure biofuel demand.
Tight storage could widen basis and limit marketing flexibility.
Cold-driven spikes in gas prices can quickly raise fertilizer and energy costs.
Large carry-in stocks across major crops could limit price recovery in 2026/27 unless demand strengthens or weather-related supply reductions occur.
Stable small business confidence supports rural economies, but lingering cost pressures and uncertainty continue to shape farm-country decision-making.
Cotton acres slipping as competing crops gain ground.