USDA raises 2027 milk output forecast on expanding dairy herd
Milk price forecast trimmed as cheese outlook softens
15 July 2026
1 minute read
By: The USDA has raised its 2027 US milk production forecast by 1.0 billion pounds to 237.0 billion pounds, driven by an expanding dairy herd and higher yields per cow, according to the agency's June livestock, dairy and poultry outlook.
The forecast for the average dairy herd size in 2027 was revised up by 30,000 head to 9.650 million, with yield per cow lifted 25 pounds to 24,560 pounds. The USDA said robust dairy margins over feed costs and continued demand for beef-on-dairy calves are expected to support herd expansion through the second half of 2026, with a lagged impact on 2027 herd size.
On exports, butter shipments are expected to be higher while dried skim milk product exports are projected lower. On a milk-fat basis, dairy exports are forecast at 20.7 billion pounds while on a skim-solids basis exports are projected at 49.3 billion pounds. Domestic use forecasts were also raised, with milk-fat basis use projected at 223.8 billion pounds and skim-solids basis use at 194.0 billion pounds.
On prices, the 2027 Cheddar cheese forecast was trimmed 0.5 cents to $1.710 per pound, while dry whey was raised 1.0 cent to $0.650 per pound. Butter and nonfat dry milk forecasts were unchanged at $1.820 and $1.575 per pound respectively.
The all-milk price for 2027 is now forecast at $20.90 per hundredweight, down 5 cents from last month. Class III is forecast at $17.55 per hundredweight and Class IV at $18.60 per hundredweight.
