USDA Ups Milk Production Estimate by 1 Billion Pounds
Published: Friday, June 19, 2026
The Agriculture Department raised its 2026 and 2027 milk production estimates in last week's World Agricultural Supply and Demand Estimates (WASDE), based on the latest Milk Production report, cow inventories and milk per cow.
2026 production and marketings were projected at 236.4 and 235.4 billion pounds, respectively, up 1 billion pounds on both from a month ago. If realized, both would be up 4.7 billion pounds, or 2%, from 2025.
2027 production and marketings were projected at 237 and 236 billion pounds, respectively, up 1 billion on both. If realized, both would be up 600 million pounds, or .3%, from 2026.
The 2026 nonfat dry milk (NDM), cheese and whey price forecasts were lowered from last month's report on recent price declines. The butter price was raised on stronger demand expected in the second half of the year. The Class III and Class IV milk price forecasts were both lowered.
The 2027 price forecasts for NDM and butter were unchanged. The Class III milk price forecast was unchanged as lower cheese prices are offset by higher whey prices. The Class IV price forecast was unchanged due to no changes in the butter or NDM price outlook.
The 2026 Class III price was projected to average $16.60 per hundredweight, down 40 cents from last month's estimate, and compares to $18.01 in 2025 and $18.89 in 2024. The 2027 average was unchanged at $17.55 per hundredweight.
The 2026 Class IV price is expected to average $19.35, down 60 cents from last month's report, and compares to $17.38 in 2025 and $20.75 in 2024. The 2027 average was unchanged at $18.60.
The U.S. corn outlook was virtually unchanged relative to last month. Fractionally higher beginning and ending stocks reflect mostly offsetting trade and domestic use changes for 2025-26 with adjustments to imports, corn used for ethanol, and exports based on data to date. The season-average farm price was unchanged at $4.40 per bushel.
Soybean supply, use and price projections were unchanged. The soybean crush was raised on higher soybean meal exports and domestic disappearance. Soybean oil for biofuel was raised while exports were lowered. Soybean exports were reduced based on available U.S. Census data, offsetting the increase in crush and resulting in unchanged ending stocks, says the WASDE.
The season-average soybean price was forecast at $11.40 per bushel; soybean meal and oil prices were projected at $310 per short ton and 70 cents per pound, respectively.
As reported last week, two cases of New World screwworm were confirmed in Texas and two additional cases were confirmed this week. The National Milk Producers Federation released a member alert outlining the latest developments and recommended precautions for dairy farms. NMPF has also created a dedicated webpage with information and resources with the latest information.
Dairy culling remains above that of a year ago. The latest weekly slaughter report showed 44,500 cows sent to slaughter the week ending May 30, up 1,800 head, or 4.2%, from a year ago. Year to date 1,163,000 had been culled, up 56,400 head, or 5.1%. from a year ago.
April U.S. dairy exports continued to impress and set records, hitting 568.9 million pounds on a 30-day basis, up 16.9% from April 2025. HighGround Dairy said, "Strong sales of value-added products pushed exports, on a dollar basis, to over $900 million for the second time."
Cheese sailings totaled 141.5 million pounds, up 29.9% from April 2025, and set a new record for the third month in a row. Year to date exports were up 12.3%. HighGround reports that demand from Mexico in April was "particularly impressive," up 28%, and the highest level ever.
Butter exports hit 21.4 million pounds, up 103.9%, with YTD up 108.4%. U.S. butter imports totaled 22.1 million pounds, up 121.7% from a year ago.
Nonfat/skim milk powder exports totaled 124.3 million pounds, up 9.5% from a year ago and up 6.1% YTD.
Dry whey hit 58.5 million pounds, up 72%, and up 44.4% YTD. But, while dry whey and whey protein concentrate WPC<80 exports were up, WPC≥80 exports fell for the sixth time in seven months, according to HGD.
"Record prices seem to be affecting international demand for the high-protein commodity, with sailings to China, Japan, the Netherlands, South Korea and Australia dropping 200 metric tons or more," said HGD.
There was more good news on the demand side. The April Dairy Supply and Utilization report showed total cheese utilization at 1.28 billion pounds, up 1.4% from April 2025. HighGround Dairy credited "incredible export levels," up 29.8%, which helped offset slightly lower domestic consumption, down 1.3%.
Butter utilization was up 9%, with domestic usage up 4% and exports up 103.8%. HGD points out, "Although Easter was in early April, demand stateside was ravenous, and domestic disappearance easily set a record for the month."
Nonfat-skim milk powder utilization was up 1.5%, with domestic use up 10.2% and exports up 9.5%. HGD points out however "April 2025 was the lowest total for the month since 2014, and 2026 ranks just ahead of it, meaning usage was not much to write home about."
"What is lacking in domestic demand is being made up for in impressive exports of dry whey and whey protein concentrate," said HGD. "Mexico, Canada and China increased dry whey imports in April, with exports now accounting for 75% of total use."
CME block Cheddar fell to $1.46 per pound last Wednesday, lowest CME price since Feb. 17, 2026. It closed last Friday at $1.4875, 1.5 cents higher on the week, ending six weeks of decline, but is still 35 cents below a year ago. The barrels closed last Friday at $1.42, 2 cents lower on the week, lowest since Feb. 3 and 41.50 cents below a year ago. Sales totaled 21 loads of block on the week and four of barrel.
Milk production destined for Class III use was balanced last week in the Central region, according to Dairy Market News. Spot milk trade was more active with some facilities needing to move milk due to unscheduled downtime and production issues. Mid-week spot prices ranged from $7-under to flat class. Contacts were closely watching weather forecasts as warmer temperatures were expected to give way to rain and cooler days, providing more cow comfort and thus increased milk volumes. Cheesemakers are operating busy schedules to match current demand for bulk cheese. Some contacts indicate spot volumes are being purchased as soon as they are offered and export demand is strong.
Cheese manufacturers in the West report that milk production is meeting their needs, despite seasonally lighter output. Spot loads were more available, with downtime at some Class II and IV facilities. Most cheese plants continue to use much of their capacity as they work through milk intakes. Domestic cheese demand is steady. Demand from retail and other food manufacturers continues to outpace food service demand. International buying is steady, according to DMN.
Cash butter fell to $1.64 per pound last Thursday, but closed last Friday at $1.6675, 2.50 cents lower on the week, and 90.25 cents below a year ago. There were 161 sales on the week, 51 on Monday and a record 60 on Friday alone.
DMN warned that, while milk and cream production are strong in the Central region, some contacts are concerned with increasing temperatures affecting farm output. Cream demand from Class II and III facilities remains strong, leaving very little spot cream available for Class IV use. Some facilities were bringing in spot cream from other regions to keep churns operating seven days a week. Domestic spot sales of 80% butter are steady and 82% product destined for export is in demand due to lower prices compared to other international producers. Retail sales are steady to strong while food service demand is light.
Milk output in the West continues to readily fill cream processor needs. Some Class II manufacturing downtime was freeing up more spot cream in parts of the region. Demand from butter manufacturers was not heavy though churns are very active with contractual cream intakes and running well. Inventories are generally stable or building. Domestic demand is steady, international buying is mixed. Spot loads of 80% and 82% butterfat butter are available, says DMN.
Hemorrhaging continued in the powder, where Grade A nonfat plunged to $1.7850 per pound last Friday, lowest CME price since March 13, and 51 cents below its May 7 record high, but is still 51.75 cents above a year age. There were 51 CME sales on the week.
Dry whey saw its Friday closing at 68 cents per pound, up a penny on the week and 12.75 cents above a year ago, with four sales put on the board for the week.
In politics, Michael Lichte, chief insights and optimization officer for Dairy Farmers of America, testified last Wednesday before the House Committee on Agriculture on the importance of the United States-Mexico-Canada Agreement (USMCA) to U.S. dairy and the need for strengthening dairy implementation and enforcement during the agreement's forthcoming joint review. Lichte served as a witness representing the National Milk Producers Federation as a board member and the U.S. Dairy Export Council as a director.
"Export demand now accounts for 17% of total U.S. milk production and has become one of the primary drivers of incremental growth across the dairy sector," Lichte said. "For DFA and the U.S. dairy industry broadly, USMCA remains one of the most consequential trade agreements affecting long-term competitiveness, manufacturing investment, and farm-level economic stability. That's why it's essential that we strengthen and renew it."
Mexico and Canada together account for more than 40% of U.S. dairy exports by value.
Lichte's testimony focused on Canada's administration of its dairy tariff-rate quotas in a manner that limits trade and its circumvention of USMCA export disciplines for dairy proteins, while also highlighting the importance of preserving U.S. exporter's ability to use common cheese names like feta in Mexico."
Lichte also documented Canada's "chronic underfill of negotiated dairy tariff-rate quotas, with cumulative fill rates reaching only 64% for industrial-use cheese, 34% for fluid milk and just 7% for skim milk powder through 2025." He also detailed Canada's growing use of alternative tariff classifications to "move surplus dairy proteins into U.S. and global markets in ways that evade USMCA's dairy protein export caps, a practice confirmed by a May 2026 U.S. International Trade Commission report."
Meanwhile, more than 80 NMPF board members and young dairy farmers met with about 100 congressional offices last Wednesday in the organization's annual fly-in, advocating on behalf of dairy on issues ranging from agricultural labor to the recent return of New World screwworm to the U.S. The fly-in followed NMPF's June board meeting on last Tuesday.
Ice Cream Party
Ending on a sweeter note, thousands of lawmakers, staff and federal officials gathered last Wednesday for the International Dairy Foods Assn.'s 42nd Annual Capitol Hill Ice Cream Party, "celebrating America's favorite frozen treat and the dairy industry's continued leadership in delivering products families know, trust and enjoy," the IDFA stated.
"Nearly all Americans (97%) say they like or love ice cream, underscoring its status as one of the nation's most beloved treats," the IDFA stated. "Held at Union Square Park on Capitol Hill, this year's celebration featured ice cream and frozen dairy desserts made with real milk and without certified artificial colors, consistent with the IDFA Ice Cream Commitment."
"The voluntary, industry-led commitment brings together U.S. ice cream makers working to eliminate certified artificial colors from ice cream products made with real milk and sold at retail by the end of 2027," according to the IDFA.
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