Processing was addressed by those surveyed for State of Dairy as both an exciting opportunity and a challenge in some regions – especially since there are still many unanswered questions about how it will ultimately affect milk flows, if new processing facilities will eventually lead to the closure of some other existing ones and how much new capacity is actually available. 

USDA’s March WASDE raised 2025 milk production to 231.7 billion pounds and forecasts 234.7 billion pounds for 2026. Dairy prices strengthen, beef prices rise and most feed prices remain steady.

In January, the national conversation around nutrition reached a turning point. On Jan. 7, the U.S. Department of Health and Human Services and the USDA released the 2025-30 Dietary Guidelines for Americans. Additionally, a reimagined food pyramid was released to reflect a renewed focus on nutrient-dense, minimally processed foods.

Artificial intelligence (AI) is emerging in 2026 not as a futuristic concept but as a practical response to the complexity of dairy farming. Its primary value is not automation for its own sake but the ability to improve decisions across thousands of animals and management variables.

The beginning of a new year is often a time to refresh goals and evaluate the vision for one’s life. Similarly, multiple people interviewed for this year’s State of Dairy coverage said late 2025 and early 2026 will be remembered as a reset. 

In contrast to the start of last year, U.S. dairy markets are in a far more unsettled place to begin 2026. Dairy farmers are seeing noticeably lower pay prices than this time a year ago.