The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released July 11.
Milk production, prices
The milk production forecasts for both 2025 and 2026 are raised from last month based on higher cow inventories and an increased rate of growth in milk output per cow according to the latest information published in the National Agricultural Statistics Service (NASS) Milk Production report. Estimated at 228.3 billion pounds, it was raised 500 million pounds from last month’s report.
Butter, whey and nonfat dry milk (NDM) price forecasts for 2025 are increased from the previous month’s forecast on robust demand. However, the cheese price forecast was lowered on recent prices. The Class III milk price forecast is lowered to $18.50 per hundredweight (cwt), and the Class IV price is raised to $19.05 cwt. The 2025 all-milk price is raised a nickel to $22 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 229.1 billion pounds.
For 2026, butter, NDM and whey price forecasts are raised, while the cheese price is unchanged from the previous month. As a result, the Class III milk price forecast is $17.85 per cwt, and the Class IV price is $18.60 cwt. The 2026 all-milk price is forecast to be $21.65 per cwt.
Beef outlook
For 2025, the beef production forecast is lowered on a slower pace of slaughter and reduced dressed weights. However, for 2026, beef production is raised primarily on higher expected feedlot placements during the second half of 2025, as strong demand for beef supports feeder cattle prices. The forecast assumes cattle imports from Mexico remain banned for the duration of the forecast period due to the presence of New World screwworm.
Fed cattle price forecasts in 2025 are lowered slightly based on reported data through the end of the second quarter. No changes are made to the forecasts for the second half of 2025 or 2026. The 2025 average is now forecast at $221.31 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 little change from last month, with lower beginning and ending stocks.
The corn production forecast for 2025-26 is down 115 million bushels on lower planted and harvested area from the June 30 Acreage report. The yield is unchanged at 181 bushels per acre. Total use is cut 50 million bushels with a reduction for feed and residual use based on lower supplies.
At $4.20 per bushel, the projected season-average corn price received by producers is unchanged from last month and down 15 cents from the 2024-25 average of $4.35 per bushel.
- Soybeans: This month’s 2025-26 U.S. soybean outlook called for slightly lower production, higher crush, reduced exports and increased ending stocks compared to last month.
Soybean production is projected at 4.3 billion bushels, down 5 million from last month on lower harvested acres and an unchanged yield of 52.5 bushels per acre.
U.S. soybean crush for 2025-26 is raised 50 million bushels to 2.54 billion, supported by higher demand for soybean oil for biofuel. This month’s report assumes the U.S. Environmental Protection Agency’s (EPA) proposed rule for required Renewable Fuel Standard volumes for 2026 and 2027 when evaluating soybean oil demand. The EPA not only significantly raised the mandates but also proposed to reduce the number of renewable identification numbers (RINs) generated for imported renewable fuels and renewable fuels produced from foreign feedstocks starting in 2026, which increases demand for domestically produced feedstocks like soybean oil.
Along with the EPA’s proposed rule, the forecast considered additional policy incentives like the 45Z Clean Fuel Production Tax Credit and current state mandates. As a result, soybean oil used for biofuel for 2025-26 is raised 1.6 billion pounds to 15.5 billion, reflecting a 23% increase from the prior three-year average.
With higher soybean oil prices supporting crush margins and higher crush in 2025-26, soybean meal production is raised 1.2 million short tons. Domestic disappearance is increased 0.5 million short tons to 41.8 million, a 3% increase over the prior year.
The 2025-26 U.S. season-average soybean price is forecast at $10.10 per bushel, down 15 cents from last month, but up 15 cents from the average price of $9.95 per bushel in 2024-25. Projected soybean meal prices were lowered $20 to $290 per short ton, down about $10 from the 2024-25 average of $300 per ton and $95 less than the 2023-24 average of $385 per ton.
- Cottonseed: As a predictor of cottonseed availability, cotton production is increased 600,000 bales from June’s projection to 14.6 million, and up from 14.41 million last year.
The forecast for 2025-26 shows higher U.S. cotton production and ending stocks, lower beginning stocks, and unchanged consumption and imports compared to last month. Planted area is raised to 10.12 million acres based on the NASS June Acreage report. Harvested area is increased 6% to 8.66 million acres, reflecting higher planted area along with lower abandonment in the Southwest that is partially offset by higher abandonment in the Southeast. The national average yield for 2025-26 is lowered 1% to 809 pounds per harvested acre as the reduced abandonment in the Southwest results in the harvest of more lower-yielding dryland acres. The projected season-average price for 2025-26 is unchanged this month at 62 cents per pound.
Alfalfa and other hay
The latest USDA Ag Prices report indicated dairy-quality alfalfa hay prices averaged $277 per ton in May, while alfalfa hay prices averaged $191 per ton and prices for other hay averaged $144 per ton.
