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
Texas lawmakers secure funding for sterile fly production as officials work to stop the New World screwworm from spreading into the U.S. cattle herd.
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.

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:

Bipartisan momentum builds, but final farm policy remains unsettled.
Heavy cattle weights are cushioning beef supplies despite shrinking herd numbers.
Farm bill negotiations remain unsettled, leaving producers waiting for updated federal support programs.
Domestic textile demand plays a shrinking role in supporting U.S. cotton prices.
Strong cattle markets are masking ongoing financial stress across crop agriculture.
Record ethanol demand continues supporting corn markets and rural economies.
Agriculture Shows
From barnyards and back roads to metros and highways, Simply Southern TV on RFD Network explores all of Alabama to bring you the best stories on farming, gardening, forestry, rural living, and youth in agriculture.
In the first week of each month, “Down Home Virginia,” produced by the Virginia Farm Bureau, airs its half-hour program. Other states’ Farm Bureaus featured on different weeks include Texas, Arkansas, Indiana, Illinois, Tennessee, Idaho, and New York, and news from the American Farm Bureau from Washington, D.C.
Created by former Louisiana Farm Bureau PR Director and former host Regnal Wallace, “This Week in Louisiana Agriculture,” is one of the state’s longest-running TV programs.
From the rapid technological advances in the business of farming to the policy that helps shape the industry, growers get unparalleled perspective from these guys. Max Armstrong, Mike Pearson and Greg Soulje: the names producers have long known and trusted for agriculture news, weather, and commentary.