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
Cuban economic reforms could open up nearby export demand, but policy execution remains the key uncertainty.
Real Ag’s Shaun Haney explains how farmers are approaching risk management and the steps they’re taking to strengthen profitability through better financial planning.
Heavy cattle weights are cushioning beef supplies despite shrinking herd numbers.
Strong cattle markets are masking ongoing financial stress across crop agriculture.
Record ethanol demand continues supporting corn markets and rural economies.
Purdue University’s Dr. Michael Langemeier discusses the survey’s findings in February and broader signals in the months ahead.

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:

Mexican livestock officials are emphasizing surveillance and inspection systems to preserve access to the U.S. cattle export market. Texas’ Bovina Feeders explains the rising stakes as the border stays closed.
Nutrition policy shifts may influence retail demand across agriculture.
Weak crop margins and tariff uncertainty are delaying machinery purchases and signaling slower capital investment across U.S. agriculture.
Farm Bureau Economist Dr. Faith Parum explains the role farm safety net programs play in supporting farm finances as growers head into the 2026 planting season.
Corn demand is rising thanks to ethanol expansion, yet year-round E15 remains missing from the Farm Bill—leaving farmers questioning the policy gap.
Bipartisan momentum builds, but final farm policy remains unsettled.
Agriculture Shows
The goal of “Where the Food Comes From” is as simple as its name implies — host Chip Carter takes you along on the journey of where our food comes from — and we don’t just mean to the supermarket (though that’s part of the big picture!). But beyond where it comes from, how it gets there, and all the links in the chain that make that happen.
Join markets specialist Scott Shellady, better known as the Cow Guy, as he covers the market-close, breaking down headlines that drive the commodities and equities markets with commentary from respected industry heavyweights.
Crop yield champions David Hula from Virginia and Randy Dowdy from Georgia are back for another season with the aim of schooling more growers across the country in their winning ways.
“Texas Agriculture Matters” is a fun, informative look at the role of agriculture in our daily lives. The show utilizes the trademark wit and wisdom of its host Commissioner Sid Miller — an 8th-generation farmer-rancher and 12-time World Champion rodeo cowboy — to explore a new Texas ag-related topic each week.