The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released May 12.
Milk production, prices
Milk production for 2026 is raised slightly from the previous month on expectations of a larger cow herd but a slower growth rate in output per cow, all based on the latest information published in the Milk Production report.
- At 235.4 billion pounds, the 2026 milk production estimate was raised from last month’s report and would be up 3.7 billion from 2025’s total of 231.7 billion pounds.
Cheese, nonfat dry milk (NDM) and whey prices for 2026 are raised compared to the previous month’s forecast, but butter is lowered to reflect recent prices. As a result, the Class III milk price forecast is raised on increased cheese and whey prices to $17 per hundredweight (cwt), and the Class IV price is also raised to $19.95 per cwt as higher NDM prices will more than offset the effect of lower butter prices. The 2026 all-milk price is raised 75 cents to $21.25 per cwt.
The milk production forecast for 2027 is forecast to increase from 2026, driven by higher milk per cow and a stable milk cow herd.
- In its forecast for 2027, the USDA estimated milk production at 236 billion pounds.
Dairy product prices in 2027 are forecast to be higher for cheese and butter but lower for whey and NDM compared with 2026. As a result, the Class III milk price is forecast higher $17.55 per cwt, and the Class IV price is lower at $18.60 per cwt. The 2027 all-milk price is forecast to be lower at $20.95 per cwt.
Beef outlook
For 2026, beef production is lowered on official data through March and lower-than-expected marketings in the second quarter due to the recent pace of steer and heifer slaughter. Marketings were also lowered in the second half of the year due to the slow pace of placements into feedlots reported in the first quarter and reduced expectations for second-quarter placements. Lower expected cow slaughter also underpins the production decrease.
Fed cattle prices are increased from last month on recent data and tighter expected supplies. The 2025 average was forecast at $224.37 per cwt, while the 2026 average is now forecast at $249.66 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:
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Corn: This month’s WASDE 2026-27 U.S. corn outlook is for reductions to supply, total use and ending stocks with higher expected prices.
- The corn crop is projected at 16 billion bushels, down 6% from a year ago on declines to both area and yield. Planted area of 95.3 million acres, if realized, would be down 3.5 million. The yield projection of 183 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather. Larger beginning stocks partially offset the forecast reduction in production, resulting in total corn supplies declining 2% to 18.1 billion bushels.
- At $4.40 per bushel, the projected season-average corn price received by producers is raised a quarter from the previous report and up a quarter from the 2024-25 average of $4.15 per bushel.
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Soybeans: This month’s 2026-27 U.S. soybean outlook shows higher supplies, crush, exports and lower ending stocks from the prior marketing year.
- The soybean crop is projected at 4.435 billion bushels, up 173 million from last year’s crop, reflecting trend yield and higher harvested area. Along with higher beginning stocks, supplies are 188 million bushels above the 2025-26 marketing year. U.S. soybean crush for 2026-27 is projected at 2.75 billion bushels, up 120 million from the 2025-26 forecast on favorable crush margins and strong demand for soybean oil as a biofuel feedstock.
- The 2026-27 U.S. season-average soybean price is projected at $11.40 per bushel, compared with $10.40 in 2025-26. The soybean meal price is down $5 at $310 per short ton, and the soybean oil prices was also raised 7 cents to 70 cents per pound.
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Cottonseed: The forecast for the 2026-27 U.S. cotton balance sheet shows lower production and ending stocks, and higher exports and beginning stocks compared to 2025-26, with consumption unchanged.
- Planted area is projected at 9.64 million acres based on the March 31 Prospective Plantings report. Harvest area is forecast to be 7.38 million acres for an abandonment rate of about 24%, approximately equal to the 10-year average.
- The 2026-27 national average yield is projected at 866 pounds per harvested acre based on regionally weighted five-year averages, slightly above last year’s 852 pounds. Production is projected to be 13.3 million bales, 600,000 below the 13.9 million bales produced in 2025-2
- The 2025-26 season-average farm price forecast is raised 2 cents to 63 cents per pound reflecting recent strength in cotton futures. The projected season-average price for 2026-27 is 73 cents per pound.
Alfalfa and other hay
The latest USDA Ag Prices report indicated dairy-quality alfalfa hay prices averaged $230 per ton in March, while alfalfa hay prices averaged $166 per ton, and prices for other hay averaged $138 per ton.
