2026 Dairy Market Forecast: Key Trends, Global Pressures, and What Producers Need to Prepare For

A Clear Look at the Forces Shaping Profitability and Risk Heading Into 2026

As market volatility continues across agriculture, staying ahead of economic signals is essential. In episode 287 of the Uplevel Dairy Podcast, Joe Kerns of Ever.Ag broke down the major factors influencing dairy markets today and the trends producers should be watching closely as they plan for 2026. The following highlights the biggest drivers shaping the road ahead.

Global Protein Demand Is Rising and Dairy Will Play a Central Role

Joe highlighted a long-term increase in global demand for nutrient-dense, affordable protein. Food insecurity, population growth and widening economic disparities across developing regions are all pushing protein needs higher.

What this means for dairy producers:
• The U.S. remains one of the world’s most reliable surplus protein suppliers.
• Global demand for dairy products, especially powders, is likely to strengthen.
• Producers who track global hunger indicators and demand signals can position themselves ahead of market shifts.

Government Programs Remain Key Market Stabilizers

Joe emphasized that government policy continues to be a significant source of stability in dairy. Programs such as PLC and ARC support producer margins, reduce operational risk during volatile periods and help maintain acreage and production levels. Understanding these tools and planning around them will remain important heading into 2026.

Trade Agreements Will Influence Market Access and Price Stability

Because global markets are increasingly connected, U.S. dairy performance depends heavily on trade policy. Joe noted that trade agreements and tariffs influence export opportunities, price competitiveness and long-term international partnerships. He added that future growth may rely on government-led humanitarian aid and financial support that increases global access to protein.

Renewable Energy and Biofuels Introduce New Market Variables

The rapid expansion of renewable diesel and biofuels is influencing agriculture in multiple ways. Higher feedstock demand can tighten commodity supplies, biofuel growth can shift input costs and sustainability incentives may create new revenue opportunities. As agriculture and energy markets overlap more heavily, producers will need to consider how these shifts could affect margins and long-term planning.

The 2026 Dairy Outlook Shows Cautious Optimism

Looking ahead, Joe pointed to several encouraging signals for producers. More predictable feed costs, stronger beef markets that support beef-on-dairy strategies and balanced but mixed market indicators suggest cautious optimism. One of his key messages was that flexibility and diversification will be important tools for navigating the next few years.

Preparing for the Unexpected

Forecasts can guide decisions, but disruptions have the power to change markets quickly. Joe noted that disease outbreaks, geopolitical shifts and trade interruptions can affect demand and supply almost overnight. Producers who thrive will be those who stay adaptable, track global indicators, evaluate their risk exposure and remain ready to pivot as conditions change.

To hear the full story from Joe Kerns, stream the episode on Apple Podcasts, Spotify or watch the complete conversation below.