U.S. milk production is expected to grow by more than initially expected due to higher milk cow inventories and milking productivity. The milk production forecast for 2025 was raised to 231.4 billion pounds, according to the USDA’s WASDE report on Friday. Output was raised by 1.4 billion pounds compared to the previous report.

Milk production through September is running two percent ahead of last year’s pace, according to the USDA’s latest Milk Production report. Production for 2026 was raised to a record of 234.3 billion pounds, up from the previous forecast of 231.3 billion.

Dairy product exports are expected to benefit from the higher milk production. Exports for 2025 were raised on a fat basis and a skim-solids basis due to whey-containing products. Fat basis exports were also raised for 2026 to reflect higher expected shipments of butter and cheese.

Milk prices have been under pressure from rising domestic production. January class III dairy milk futures traded below 16 cents a pound this week, hitting new contract lows.

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