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
Dairy farmers are expected to face strong output and export gains, but lower prices and tighter margins will persist into next year.
Disease risks remain a key factor to watch heading into fall.
For rural communities, this shift could mean new housing options for farmworkers and young families priced out of metro markets.
Sen. Roger Marshall, a founding member and chairman of the Make America Healthy Again caucus, joined us with his thoughts on the commission’s latest report and the key ag-related issues.

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:

Slower grain movement may pressure basis, but falling diesel prices could help offset transportation costs.
Regional differences indicate that family ownership is universal, but farm structure and commodity mix determine the extent to which these operations drive agricultural output.
A new study found that retaining the EPA’s half-RIN credit protects soybean demand, farm income, and crushing-sector strength while preserving biofuel market flexibility.
Rising federal debt is increasing pressure on Washington to limit spending, which could tighten future funding and delivery for agricultural programs.
Freight Softens as Producers Plan 2026 Budgets Nationwide
“I’m not sure where this bridge goes,” trader Brady Huck with Advanced Trading told RFD-TV News earlier this week.