USDA Lowers Meat Output as Dairy Supplies Grow

Cattle and hog supplies continue to tighten while dairy output expands, creating a split outlook in which red-meat prices soften and milk values come under pressure from larger supplies.

Holstein dairy cows

Getty Images

WASHINGTON, D.C. (RFD-TV) — The latest World Agricultural Supply and Demand Estimate (WASDE) Report from the U.S. Department of Agriculture (USDA) shows livestock markets experiencing mixed momentum, as cattle and hog production move lower while dairy output continues to grow.

The update gives producers an early view of how slaughter trends, disease pressures, and product prices may shape margins over the next year. Beef and cattle markets see the most signs of tightening, hog supplies are slipping as slaughter slows, and dairy faces downward pressure from larger milk volumes.

For cattle, the USDA lowered 2025 beef production on reduced steer and heifer slaughter and lighter weights, even though cow and bull slaughter is expected to rise. Prices for the fourth quarter of 2025 were revised down and are forecast to remain soft into early 2026. The agency also lowered 2026 beef output as the slower fed-cattle marketings are expected to extend into next year.

Hog markets show similar signs of tightening: USDA reduced 2025 pork production due to a slower slaughter pace that outweighs heavier carcass weights. Updated inventory data also point to smaller hog supplies in 2026, prompting the USDA to raise its 2026 hog price outlook even as late-2025 prices ease.

Dairy markets are moving in the opposite direction. USDA raised milk production forecasts for both 2025 and 2026 on higher cow inventories and stronger productivity. Larger milk supplies are pushing product prices lower — particularly butter, cheese, and nonfat dry milk — leading to reduced Class III and Class IV values. The all-milk price is now forecast at $21.05/cwt for 2025 and $19.25/cwt for 2026. Dairy exports, however, were increased due to competitive butter, cheese, and whey markets.

Farm-Level Takeaway: Cattle and hog supplies continue to tighten while dairy output expands, creating a split outlook in which red-meat prices soften and milk values come under pressure from larger supplies.
Tony St. James, RFD-TV Markets Specialist
Related Stories
Enforceable origin labels could create clearer premiums for U.S. cattle and address concerns some producers have had with competition from foreign imported beef.
Rural businesses report softer sales, tougher hiring, and restrained investment — a backdrop that can pinch farm support capacity even if posted prices cool.
Friday’s release will be the first WASDE report in about two months, and early estimates indicate a corn surplus is still on the way.
The National Milk Producers Federation (NMPF) says recent wins in markets like Malaysia and Cambodia help farmers focus on production rather than trade barriers.
Lucia Ruano, USMEF’s Central America representative, discusses what is driving demand for U.S. beef and pork in the region.
Tyson expects another year of beef-segment losses due to tight cattle supplies, even as chicken, pork, and prepared foods strengthen overall margins.

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:

Harvest Pace, Logistics, and Input Costs Drive Fall Decisions
With China halting U.S. soybean purchases and talks tied to broader strategic issues, growers face renewed export uncertainty.
Talks highlight the widening role of agriculture in U.S.–India trade policy, though neither side appears ready for major concessions before tariff issues and oil imports are resolved.
Southern farms are deepening online engagement for cost savings and market access, while higher-cost precision technologies face renewed scrutiny amid tight budgets.
Global trade teams and summit discussions highlight expanding opportunities for U.S. corn and ethanol exports as nations explore renewable fuel options and reduced-carbon energy pathways.
Slightly higher output amid softer gasoline pull points to steady corn grind — watch regional stocks and export pace for basis clues.
Agriculture Shows
Hosted by Scott “The Cow Guy” Shellady and RFD News Markets Specialist Tony St. James, Commodity Talk delivers expert insight into the day’s ag commodity markets just before the CME opens. Only on RFD-TV and Rural Radio SiriusXM Channel 147.
A look at the news, weather and commodities headlines that drove agriculture markets in the past week.
Everything profits from prairie. Soil, air, water — and all kinds of life! Learn how you can improve your land with prairie restoration, cover crops and prairie strips, while growing your bottom line.
Special 3-part series tells the story of the Claas family’s legacy, which changed agriculture forever.