Herd Growth, Protein Demand Drive Milk Gains
September 1, 2026
U.S. milk production rose 3.0% on a liquid basis in June as producers added 52,000 head to the milking herd and responded to signals for more dairy proteins.
Circana data shows that cottage cheese sales so far this year have risen 11%, yogurt sales have increased 6.5%, and ultrafiltered milk sales are up 8.3% as consumers reach for high protein dairy products at retail. Skim ingredients are in demand at the Chicago Mercantile Exchange as well. Nonfat dry milk prices rebounded in August as competition for skim solids continued and dry whey prices remain firm. Butter demand remains healthy both at home and abroad, although ample production is limiting price upside. Domestic demand for cheese has ebbed as consumers visit quick service restaurants less frequently, but record export volumes have prevented CME Cheddar and Class III prices from easing further.
U.S. milk production seems to have been unbothered by summer heatwaves, aside from a few regions where milk per cow yields dipped.
Looking ahead, NMPF analysts anticipate growth to continue as producers push for higher protein components and the beef market incentives producers to retain heifers for longer. However, feed prices are forecast to rise as drought limits corn yields and low stocks keep futures elevated. Analysts don’t expect rising feed costs to be accompanied by an increase in the All-Milk Price; that suggests that DMC margins could fall below the $9.50/cwt maximum payment threshold from August through the end of this year.
