The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released May 12.
Milk production, prices
The 2025 milk production forecast is raised from the previous month on expectations of an increased cow herd and a faster growth rate in output per cow, all based on the latest information published in the NASS Milk Production report. Estimated at 227.3 billion pounds, it was raised 400 million pounds from last month’s report.
Milk and dairy product price forecasts reflect the updated price formulas of the Federal Milk Marketing Order, as published in the Federal Register on Jan. 17, 2025, by the Agricultural Marketing Service. Almost all the changes do not become effective until June 1, 2025.
Cheese, butter, nonfat dry milk (NDM) and whey prices for 2025 are all raised based on recent prices and increased export demand for the second half of the year. As a result, the Class III milk price forecast is raised to $18.70 per hundredweight (cwt), and the Class IV price is also raised to $18.45 cwt. The 2025 all-milk price is raised 50 cents to $21.60 per cwt.
Milk production in 2026 is forecast to increase from 2025, driven by an expanding milk cow herd and slightly higher milk per cow. Estimated milk production is at 227.9 billion pounds.
Dairy product prices in 2026 are forecast to be lower for cheese, butter, NDM and whey, primarily due to increased milk supplies. As a result, the Class III milk price forecast is $17.50 per cwt, and the Class IV price is $18.10 cwt. The 2026 all-milk price is forecast to be $21.15 per cwt.
Beef outlook
For 2025, the beef production forecast is lowered as higher dressed weights more than offset reduced steer and heifer slaughter due to the suspension of cattle imports from Mexico.
Fed cattle price forecasts are raised from last month on recent price strength seen through early May and tighter fed cattle supplies expected during the second half of the year. The 2025 average is now forecast at $214.51 per cwt, with highest prices in the fourth quarter of the year.
Feed supply, price forecasts
The USDA’s WASDE report provided potential insights into dairy feedstuff supplies and prices:
- Corn: This month’s WASDE 2025-26 U.S. corn outlook called for record supplies and total use, and higher ending stocks. The corn crop is projected at 15.8 billion bushels, up 6% from a year ago on increases to both area and yield. Planted area of 95.3 million acres, if realized, would be the highest in over a decade. The yield projection of 181 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing-season weather. With smaller beginning stocks partially offsetting the increase in production, total corn supplies are forecast at 17.3 billion bushels.
At $4.20 per bushel, the projected season-average corn price received by producers is down 15 cents from the 2024-25 average of $4.35 per bushel.
- Soybeans: This month’s 2025-26 U.S. soybean supply and use projections shows slightly lower supplies, higher crush, reduced exports and lower ending stocks compared with 2024-25. The soybean crop is projected lower at 4.34 billion bushels with trend yield and lower area. With higher beginning stocks but lower imports and production, soybean supplies are down less than 1% from 2024-25.
The 2025-26 U.S. season-average soybean price is forecast at $10.25 per bushel, up 35 cents from last month and from the average price of $9.95 per bushel in 2024-25. Projected soybean meal prices were raised $10 to $310 per short ton, up about $10 from the 2024-25 average of $300 per ton and $75 less than the 2023-24 average of $385 per ton.
- Cottonseed: As a predictor of cottonseed availability, cotton production is projected to be 14.5 million 480-pound bales, as the national all-cotton yield estimate is also down at 832 pounds per harvested acre. February cottonseed prices averaged $250, up $33 from January and $73 more than February 2024.
The forecast for 2025-26 U.S. cotton shows a small increase in production, higher exports, beginning and ending stocks and unchanged consumption compared to 2024-25. Planted area is expected to be 9.87 million acres based on the March 31 Prospective Plantings report. With recent precipitation in the Southwest, abandonment is projected to be lower than average, resulting in a U.S. harvested area of 8.37 million acres – higher than the 7.81 million harvested in 2024-25. The projected season-average price for 2025-26 is 62 cents per pound.
Alfalfa and other hay
The latest USDA Ag Prices report indicated dairy-quality alfalfa hay prices averaged $242 per ton in March, while alfalfa hay prices averaged $167 per ton, and prices for other hay averaged $139 per ton.
