U.S. commercial dairy farms of nearly every size are expected to post positive margins in 2026, but the link between increased herd size and profitability is sharper than ever. The newest Zisk report points to another generally profitable year ahead for U.S. dairy producers, although – as in past reports – the outlook varies noticeably depending on herd size.
Smaller farms, particularly those milking fewer than 250 cows, are forecast to see modest improvement but will still trail larger operations by a wide margin. The size-profitability relationship remains intact: Herds milking more than 5,000 cows anticipate the strongest results, followed by those with 1,000 cows or more. Meanwhile, producers with fewer than 250 cows remain the least profitable group in what is otherwise an encouraging year for most dairies. Because these small herds have endured several consecutive years of thin or negative margins, even the favorable milk-price environment expected in 2026 is unlikely to fully offset prior losses.
This year’s projections again highlight the structural benefits larger farms enjoy – ranging from better feed contracting to more efficient labor use and increased negotiating power. Industry analysts have long argued the economic model of the future would be driven by very large herds, and the data continues to support that view. Still, the 2026 numbers show that the most profitable segment nationwide appears to be farms milking between 1,000 and 5,000 cows, many of which outperformed even the largest herds.
The Midwest is projected to be one of the strongest regions in 2026, with average profits of $588 per cow. Wisconsin and South Dakota remain leaders with $924 and $511 per cow, respectively, while Michigan, Minnesota, Indiana, Missouri, Iowa and Nebraska fall close to the regional average. North Dakota is expected to return $201 per cow, below the broader Midwest outlook. The Midwest continues to benefit from strong milk production, often exceeding 80 pounds per cow, and relatively stable basis levels.
The Southeast is projected to be the second-most-profitable region, averaging $464 per cow. Producers with fewer than 250 cows expect losses of –$234 per cow, and states such as Arkansas, Tennessee and Mississippi fall well below the regional average – largely due to lower milk production. By contrast, Florida, Georgia and North Carolina anticipate strong years, with Florida leading at $633 per cow. These states typically operate larger herds with higher production levels, often exceeding 74 pounds per cow, and benefit from more stable feed-basis conditions.
The Northwest is also expecting a favorable year, averaging $405 per cow. Wyoming, Utah and Colorado lead the way with profits between $556 and $677 per cow, and both Idaho and Washington anticipate solid margins. Zisk users in this region typically operate larger herds, which aligns with stronger profitability outcomes. Herds with 1,000 to 5,000 cows expect profits of $401 per cow, while the largest herds (those above 5,000) are projected to earn $481 per cow, the highest in the region.
The Northeast projects returns of $374 per cow. Strong returns in Rhode Island ($778 per cow) and Maryland ($570 per cow) lift the overall regional outlook, with New York following at $417 per cow. New Hampshire, New Jersey and Massachusetts remain below average, reflecting smaller herds and lower production, but the wider region, stretching from Vermont to Pennsylvania, expects a solid year. As in most regions, herds in the 1,000 to 5,000 range stand out, projecting returns of $601 per cow, compared to continued negative margins for small herds.
The Southwest, including California, anticipates returns of $339 per cow on average. Arizona remains the standout performer with $771 per cow, while California and Nevada are expected to exceed the regional average. Texas, Kansas and Oklahoma lag behind, and New Mexico faces one of the weakest outlooks at $34 per cow. The 1,000- to 5,000-cow category again shows strong performance here, projecting $402 per cow and emphasizing the competitive position of mid-large herds in 2026.
Despite some shifts in which regions are expected to perform best, the broader themes seen in previous annual reports persist: Larger herds consistently make more money, and farms with fewer than 250 cows face ongoing financial pressure. For many of these smaller operations, additional income sources or alternative business models will remain critical for survival.
The free Zisk Dairy App is now used by over 4,500 farms owning over 4.9 million cows. As a result, the data collected represents projections for more than half of U.S. herds. The app provides producers with profitability estimates for their farm, and projections of how those profits will change moving forward.
