USDA’s July Dairy Outlook included production forecast updates that raised U.S. milkproduction for both 2025 and 2026. Half a billion pounds in 2025 and 900 million pounds in2026.These numbers are based on higher cow inventories and more milk per cow according to WorldAgricultural Outlook Chairman Mark Jekanowski.So far in 2025, the increase in U.S. dairy cow numbers appears to reflect reduced culling ratherthan accelerated heifer additions. Weekly slaughter rates remain below year-ago levels, helpingstabilize herd size despite historically tight replacement inventories. With low heifer numbersand strong demand for productive replacements, prices have surged to record highs across majorauction markets, reflecting limited supply. Many producers are extending the productive life ofexisting cows.Strength in cheese exports is behind the month over month increases in total dairy exports boththis year and next.“Product prices are mostly higher with one modest exception, we lowered our cheese priceforecast by two cents per pound to $1.84 per pound for 2025 reflecting some new productioncapacity that has come online increasing supplies putting a little bit of pressure on prices but alsomaking us even more competitive in those export markets,” Jekanowski said.The outlook showed a lot of strong domestic demand supporting butter prices, non-fat dry milkand dry whey. The prices of those products have been adjusted higher for both 2025 and 2026.“The all milk price for 2025 in now forecast at $22 per hundredweight raised by five cents,”Jenkanowski said. “For 2026 all milk prices are forecast at $21.65 per hundredweight, raised 35cents per hundredweight this month.”