Milk production across the U.S. has been rampant in 2026 with both processing capacity and global demand pressuring dairy farms to produce more, and a larger national dairy herd is helping keep the pace. Despite all the dynamics working in favor for U.S. dairy farmers, milk margins remain tight and risk management strategies remain critical.

June marks the halfway mark for 2026, but it is already time to start thinking about risk management coverage for 2027 as the new crop year is on the horizon.

Milk prices are moving in favorable directions, with May Class IV futures closing at $22.29 per hundredweight (cwt) on April 24 and May Class III futures closing at $17.56 per cwt. But markets can quickly change. Add in the record prices dairy producers are receiving for cull cows and beef-on-dairy animals, and an established risk management plan becomes even more critical.

As we look to the second quarter of 2026, dairy markets have improved and margins are historically strong with forecasts playing in producers’ favors, particularly with incremental improvements in Class III and Class IV.

Futures prices are rising with news of competitive international prices and strong U.S. dairy exports coupled with the government’s announcement of dairy product purchases, all making for a bullish outlook for U.S. dairy producers in March.

The influx of milk has pushed prices downward, and despite alternative revenue sources helping ease the pain on farms’ bottom lines, pressure is mounting on margins.

The past year provided ample opportunities for dairy producers to capitalize on market conditions with both longstanding and new risk management strategies.

USDA reports influencing dairy markets remain delayed following the conclusion of the government shutdown, and at the same time, seasonal pressures from the holiday season are shaping the U.S. dairy outlook for December. Producers should evaluate their current risk management options and secure additional coverage as 2025 comes to a close.

At the time of this writing, the government shutdown is now in its fourth week. While the shutdown has many USDA reports delayed and data unpublished, dairy insurance programs are available even if a prolonged shutdown could delay claim processing if indemnities are triggered.

As fall arrives and a new month approaches, the dairy industry is buzzing with concern over falling milk prices as domestic supply flows with strong outputs of butter and cheese, and exports remain strong, particularly with cheese products turning out record volumes month over month.