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

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
Wed, 6/4/25 – 7:30 PM ET | 6:30 PM CT | 5:30 PM MT | 4:30 PM PT
Lean Ground Beef, fresh parsley, and cumin are formed into meatballs and served in flatbreads for a light and fresh summer main dish.
These Easy Roast Beef Sliders are perfect for potlucks and parties, or a quick and easy dinner main dish you can prepare in advance. Thinly sliced Deli Roast Beef is sandwiched between rolls and baked with cheese until golden and delicious.
This quick and easy beef recipe comes together in under 30 minutes and celebrates peak-season summer produce.
Ready for grilling season? Throw beef Strip Steaks and corn covered in a spicy, smoky seasoning mix on the grill for an easy, flavorful Mexican-inspired meal.

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:

All eyes will be on today’s Cattle on Feed Report, which analysts say could give a clearer picture of where the market goes next.
Corn and beef exports showed strong momentum, cotton sales surged, and soybean sales held steady, though China remains absent from the U.S. market.
Cheaper freight is helping exports move, especially corn, but weaker soybean demand looms large.
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.
The modest cut should slightly reduce borrowing costs on operating loans, land notes, and equipment financing for agriculture, giving some relief to producers under heavy debt loads.
Agriculture Shows
From soil to harvest. Top Crop is an all-new series about four of the best farmers in the world—Dan Luepkes, of Oregan, Illinois; Cory Atley, of Cedarville, Ohio; Shelby Fite, of Jackson Center, Ohio; Russell Hedrick, of Hickory, North Carolina—reveals what it takes for them to make a profitable crop. It all starts with good soil, patience, and a strong planter setup.
Champions of Rural America is a half-hour dive into the legislative priorities for Rural America. Join us as we interview members of the Congressional Western Caucus to learn about efforts in Washington to preserve agriculture and tackles the most important topics in the ag industry on Champions of Rural America!
Featuring members of Congress, federal and state officials, ag and food leaders, farmers, and roundtable panelists for debates and discussions.
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.