The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released Jan. 12.
Milk production, prices
The milk production forecast for 2025 is unchanged from the previous month, based on the data in the most recent Milk Production report. Estimated at 231.4 billion pounds, it was unchanged from December’s report.
For 2025, dairy product and class prices are adjusted to reflect reported prices. The cheese, butter and nonfat dry milk (NDM) price forecasts for 2025 were slightly lowered, and the whey price forecast is raised. The Class III milk price forecast was reduced to $18.01 per hundredweight (cwt), and the Class IV milk price was also reduced to $17.38 per cwt. The 2025 all-milk price is raised 15 cents to $21.15 per cwt.
The milk production forecast for 2026 is increased on higher output per cow. Estimated milk production is at 234.3 billion pounds.
For 2026, butter and cheese prices are reduced on recent price weakness, but NDM and whey are raised on robust demand for protein. The Class III milk price is lowered to $16.35 per cwt while the Class IV milk price is raised to $14.45 per cwt. The 2026 all-milk price forecast is lowered 50 cents to $18.25 per cwt.
Beef outlook
For 2025, beef production is raised as well as for 2026 beef production, which is raised on heavier dressed weights. Heavier weights will more than offset reduced fed cattle slaughter in the second half of the year.
Fed cattle price forecasts for 2025 are adjusted to reflect data through December. Cattle prices for 2026 are raised on recent price data for the first quarter and tighter fed cattle supplies expected in the second half of the year. The 2025 average is now forecast at $224.37 per cwt, with highest prices in the third quarter of the year.
Feed supply, price forecasts
The USDA’s WASDE report provided potential insights into dairy feedstuff supplies and prices:
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Corn: This month’s WASDE 2025-26 U.S. corn outlook called for larger production, higher feed and residual use, reduced food, seed and industrial use, and greater ending stocks.
- Corn production is estimated at 17 billion bushels, up 269 million on a 0.5-bushel increase in yield to 186.5 bushels per acre and a 1.3-million acre rise in harvested area. Since the July 2025 WASDE, harvested area has surged 4.5 million acres. Notably, the record crop in 2025 exceeds the prior high set in 2023 by 1.7 billion bushels or over 40 million tons.
- At $4.10 per bushel, the projected season-average corn price received by producers is up a dime from the previous report and down a quarter from the 2024-25 average of $4.35 per bushel.
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Soybeans: This month’s 2025-26 U.S. soybean supply is raised 17 million bushels on higher beginning stocks and production.
- U.S. soybean production is estimated at 4.3 billion bushels, up 9 million, led by increases for Kansas, Kentucky and Minnesota. Harvested area is estimated at 80.4 million acres, up 0.1 million. Yield is unchanged from last month at 53 bushels per acre.
- The 2025-26 U.S. season-average soybean price is projected at $10.20 per bushel, down 30 cents, reflecting reported NASS prices during the first quarter of the marketing year and expectations for future marketings and prices. The soybean meal price is forecast at $295 per short ton, down $5. The soybean oil price is unchanged at 53 cents per pound.
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Cottonseed: This month’s 2025-26 U.S. cotton balance shows lower production and ending stocks compared to December.
- Production is reduced by over 2% from last month to 13.9 million bales primarily because of lower production across the Delta. The national average yield declined by 8% from last month to 856 pounds per acre as a result of lower yields in the Delta and larger harvested area in the Southwest. With the smaller crop, ending stocks are reduced by 7% to 4.2 million bales, or 30.4% of disappearance.
- The projected season average farm price is raised to 61 cents per pound, a decline of 2 cents from last year and 30 cents since 2021-22.
Alfalfa and other hay
The latest USDA Ag Prices report indicated dairy-quality alfalfa hay prices averaged $216 per ton in November, while alfalfa hay prices averaged $159 per ton and prices for other hay averaged $134 per ton.
