Dairy Business News

From Constraints to Catalysts: How Ag Leaders Turn Hardships into Strategy

Thu, 02 Apr 2026 18:19:04 GMT

In an industry defined by “one-year-at-a-time” cycles, the greatest threat to a growing operation isn’t just a market downturn—it’s the inertia that comes with size. Farm Journal CEO Prescott Shibles argues that long-term survival requires a rare blend of faith and agility. To maintain an entrepreneurial mindset, leaders must lean into “conviction” as the core of a strategy that survives the lows.

Here is how four industry leaders are turning today’s constraints into tomorrow’s differentiators.

1. Build when times are hard.

When Brent Smith, president and CEO of NewLeaf Symbiotics, joined the company in 2023, the grain market was entering a significant down cycle. While some saw a risky time to lead a startup, he saw an opportunity.

“I learned in my first startup that the best time to build a business is in hard times,” Smith said said during a discussion at Top Producer Summit. “Because if you can’t withstand tough times, you’re not going to survive long term.”

For Smith, survival meant doubling down on the company’s core: science. Despite the pressure to cut costs, NewLeaf continues to spend half of its operating expenses on science.

“It would be very easy to peel that back,” he admits. “But we focused on projects that make the most impact the quickest, while keeping an eye on the long-term innovation in our pipeline.”

2. Control what you can control.

Farmers face the ultimate constraint every year: the weather. Scott Beck, president of Beck’s Hybrids, recalls the planting crisis of 2019 when constant rains kept tractors out of the fields well into May.

“I was concerned for our customers not being able to plant, but also for us not being able to plant our seed for the next year,” Beck says. “There was nothing that we could do to control the weather, but we could control how we interacted with our customers.”

Rather than retreating, the Beck’s team focused on transparency and empathy, using video series to connect with farmers and even forming small groups for prayer and support. Ultimately, they wanted farmers to know they cared and were there to support them however they could.

Despite the financial reality of what could happen if farmers didn’t plant and returned seed, Beck’s decided their course of action would not include employee layoffs. Instead, they prepared to sell land to protect their people.

“Fortunately, the weather broke and everybody was able to get planted,” he says. “Then the second miracle happened. We had the second warmest September on record, and that’s what brought the crop through to enable 2019 to not turn out as bad as it started.”

3. Turn disadvantages into advantages.

In 2014, Lamar Steiger, owner of The 808 Ranch, was tasked with a monumental challenge: helping Walmart reinvent its beef supply chain. At the time, the retail giant was at a disadvantage, forced to accept whatever the major meatpackers provided.

Steiger’s strategy was to turn that lack of control into a new kind of independence.

“I convinced the Walmart team to go around the traditional supply chain,” Steiger says. Today, Walmart sources 28% of its beef from its own “farm-to-table” supply chain.

There’s no question that decision was really good for Walmart. But Steiger says it was also really good for him personally.

“It reminded me that no matter how big you are, there are always challenges,” he says.

4. Create “white space” for the future.

When the day-to-day tasks of an operation become overwhelming, long-term strategy is often the first thing to go. James Burgum, CEO of The Arthur Companies, believes leaders must intentionally carve out “white space” for their teams.

“It’s important to find ways where people can actually spend their time working on the business, not just in the business,” he says.

By protecting time for team members to execute ideas that are three to five years out, Burgum manages the tension between short-term urgency and long-term viability.

“It’s hard to step away from the daily fires you’ll face in your operation, but it’s important,” he adds. “How we manage that tension of short term and long term is creating that white space and making sure that we consciously work on the business.

The Long Game

Ultimately, resilience in agriculture is about knowing when to push and when to pivot.

“You have to know when to put the gas down, and you need to know when to tap the brake,” Smith says. “And regardless of what you are doing, you need to stay focused on what you’re doing.”

Whether it is investing in science during a downturn or choosing customer empathy over the bottom line, these leaders say constraints don’t have to be roadblocks; they can be the very catalysts that drive an operation forward.

Data is the New Crop: Why Financial Companies are Betting on Farm Information

Thu, 02 Apr 2026 13:04:28 GMT

For decades, agricultural lending was a straightforward calculation of acreage and appraisals, but lender’s role is evolving as the global economy shifts toward renewable energy and digital infrastructure.

Farmer Mac President and CEO Brad Nordholm, who has spent 45 years at the intersection of agricultural and energy finance, sees how the farm of the future could look more like a high-tech power plant than a traditional row-crop operation.

At the International Dairy Foods Association (IDFA) Dairy Forum earlier this year in Palm Springs, Calif., Nordholm laid out how Farmer Mac is navigating the disconnect in today’s land market and why the industry is betting big on the integration of data and energy.

The Data Advantage: Why Lenders Crave Farmer Information

One of the most significant shifts in modern finance is how lenders view information. Financial companies are keen on farmer data because it transforms speculative lending into predictable project finance.

According to Nordholm, when Farmer Mac looks at high-growth areas like broadband, data centers or renewable natural gas (RNG), it isn’t making speculative bets. Instead, it is looking for data-backed certainty. Lenders value farmer data for three primary reasons:

Securing forward commitments — Data allows producers to prove revenue streams 10, 15 or 20 years into the future. By showing forward commitments from customers, a farm operation stops being a gamble and starts being a bankable asset.
Bridging the land-price disconnect — There currently is a gap between high land prices and lower cash flows in sectors like corn and soy. Nordholm notes that Farmer Mac no longer lends solely on an appraisal of $10,000 an acre. Instead, it uses data to size debt based on pro forma cash flows. This data-driven approach protects both the lender and the farmer from overleveraging.
Risk management tools — Unlike the 1980s, today’s data allows for sophisticated risk management. From forward-pricing sales at the beginning of the growing season to utilizing fixed-rate loan products, data provides a suite of tools that creates resilience against inflation and market volatility.

“Financial data are the only way a lender can determine a farm’s profitability and financial soundness,” says independent dairy financial consultant Gary Siporski. “As long as a farm wants to borrow money, lenders will demand data.”

Powering the Grid: From Methane to Data Centers

The dairy industry is uniquely positioned to benefit from the electrons-and-molecules era. Nordholm highlights the massive growth in anaerobic digesters and RNG. With retail and wholesale electric rates climbing, capturing methane to produce heat and electricity is no longer just a sustainability play; it’s an economic necessity.

“We don’t allocate capital because someone says, ‘I’m sustainable,’” Nordholm explains. “We ask: Does this investment improve efficiency? Does it result in less waste?”

For dairy producers, this means looking at manure and energy management as a core financial performance metric.

This energy demand is also being driven by a massive backlash against data centers taking power off the traditional grid. The new generation of data centers is going behind the meter, looking to wind, solar and batteries — often located on or near agricultural land — to guarantee 100% assurance of their energy needs.

Why This Isn’t the 1980s

Despite sad stories in row crops like cotton and sorghum, Nordholm remains optimistic. The liquidity being stored during recent good years is helping operators ride through the current stress. More importantly, the financial system has evolved.

“In the 1980s, almost all loans were variable rate,” Nordholm recalls. “Today, the ability to lock in fixed rates and use data to manage input costs means the industry is far more resilient.” While the electric power situation will remain a challenge for the next five years, the combination of a growing global population and America’s world-class financial and transportation systems keeps the long-term outlook bright.

For the modern producer, the message is clear: Your most valuable crop might not be what you harvest, but the data and energy you produce alongside it.

The Shrinking Slice: Farmers Receive Less Than 6 Cents of Every Food Dollar

Tue, 31 Mar 2026 20:45:07 GMT

For the past two years, USDA has estimated farmers and ranchers received less than 6 cents of every food dollar. In 2023, that was 5.9 cents, and using the latest data from 2024, it’s 5.8 cents.

“Our oldest data point right now is 2007 [USDA updated the data series] and that’s 14.7 cents per dollar, and now we’re down all the way to 11.8 cents per dollar,” says Faith Parum, economist with the American Farm Bureau Federation. “So we’ve really seen that decline year after year. It reflects how much of the value of things in the grocery store or when you go out to eat is going to other parts of the supply chain and not necessarily to farmers and ranchers.”

Livestock vs. Crops: A Widening Gap

The aggregate decline masks a widening gap between sectors. While the overall farmer share is down, livestock and crop producers are seeing divergent trends:

Crop Farmers: Share dropped from 2.9 cents to 2.5 cents (a 2.5% year-over-year decrease).
Livestock Producers: Share increased from 3 cents to 3.3 cents.

“Overall, the farmer share is down. But we have those two markets really at odds,” Parum says. “We’ve seen that tale of two farm economies where our livestock producers maybe have seen a little bit of better days than they had had in the past, while our row crop farmers and our specialty crop farmers are really facing strong headwinds in the market.”

Effect at the Farm Gate

As highlighted by USDA, farm finances are quickly strained when farmers/ranchers are capturing a small percentage of the food dollar and even modest swings in commodity prices and/or input prices take place.

Parum adds, “when we talk about the health of our farms and the health of future generations on the farm, and being economically viable and sustainable and being able to keep their operations open, the trends we’re seeing right now are really hard for those farmers. Our ranchers are seeing a little bit of better days right now with high beef prices, but that’s not going to last forever, and with production expenses continuing to increase, we’re really going to see that that question come up of, what is sustainable if, if these dollars we’re spending in the grocery store aren’t making it back to our farmers.”

Where Does the Money Get Distributed?

The key takeaway: farmers produce the raw commodities that make food production, however, the price is clearly more determined by what happens after the products first leave the farm.

The USDA Food Dollar Series tracks how each dollar is spent by consumers and then divides it across the industries contributing to the value in the supply chain, such as farming, food processing, transportation, packaging, wholesaling, retail and food service. As noted by the USDA, with each step in the process, the additional services, labor, transportation and infrastructure add value and increase costs to the final food product.

USDA’s Economic Research Service Food Dollar Series shows in 2024, farmers received 11.8 cents of every dollar spent on domestically produced food, the remaining 88.2 cents of the food dollar went toward the ‘marketing bill’, which includes costs associated with food processing, transportation, packaging, wholesaling, retailing and food service. Over time, this shift illustrates how an increasing share of food spending is driven by services and supply chain activities rather than farm production itself.

Groceries Leave the Most on The Table For Farmers

Farmers’ share of consumer food spending varies widely depending on the type of food purchased. For example, the farm share of the food-at-home dollar was 18.5 cents in 2024, up slightly from 18.4 cents in 2023. But even in this category it means only than one-fifth of what consumers spend on groceries goes back to farmers.

As you may expect, products with minimal processing, require less of the value to be retained in that part of the food system, and therefore return a larger share of the food dollar to producers.

“The highest commodity that gets the most of that food dollar is fresh eggs,” Parum notes. “That’s just because there’s limited labor to process that food.”

Examples include:

Fresh Eggs: 69.1 cents (+6% from 2023)
Beef: 52.2 cents (+4.8%)
Fresh Milk: 50.8 cents (+5.6%)
Pork: 23.7 cents (+7.2%)
Poultry (+3.1%)
Fish (+2.8%)
Tree nuts and peanuts (-1.7%)
Fresh fruits and vegetables (unchanged)
Bakery Products: 4.8 cents (-9.4%)
Soft Drinks/Bottled Water: 1.3 cents (-7.1%)

The Infinite Business Model: Strategic Ownership and the Future of Dairy Expansion

Wed, 25 Mar 2026 13:03:09 GMT

In the high-stakes world of dairy expansion, the most critical decision a producer makes isn’t which parlor to build or which cows to buy; it’s how they structure the business for the next 50 years.

During a recent panel at the Milk Business Conference, Greg Bethard of High Plains Ponderosa Dairy, TJ Tuls of Tuls Dairy and Hank Hafliger of Cedar Ridge Dairy shared a candid look at the infinite business model and why they are choosing strategic partnerships over private equity.

Partners Versus Investors

As dairies grow in scale, the need for capital often brings outside investors to the table. However, Greg Bethard is wary of the traditional private-equity model. For Bethard, the dairy business is a multigenerational marathon, while private equity is often a sprint toward a five-year exit.

“Our model has been taking on partners as we grow to provide capital, but we’ve elected not to go with private equity,” he explains. “Private equity typically wants to get out in five to seven years. We use an infinite business model; we want to be here in 40 or 50 years. We are looking for partners, not investors.”

This philosophy ensures every stakeholder is aligned with the long-term health of the operation rather than short-term dividends. By seeking out partners who already have successful track records in agribusiness, these producers ensure their backers understand the inherent volatility and biological timelines of the dairy industry.

The Tuition of Failure

Success in the dairy industry is rarely a straight line. Each panelist noted their most valuable insights came from expensive, “hard-knock” lessons — what Tuls’ father famously called “tuition.”

Tuls recalls a pivotal moment as a young manager in Wisconsin when he neglected to closely monitor a new separator building. Four years later, the oversight resulted in a $600,000 refit bill.

“My dad just looked at me and said, ‘That’s the tuition I’m going to have to pay for you. We won’t make that mistake again,’” he says.

Bethard shares a similar sentiment regarding the steep learning curve of expansion. After “getting his tail kicked” during his first expansion in 2018, he realized that persistence is the only way through the struggle. He points to the importance of time spent in the trenches to achieve operational mastery.

“We have our 10,000 hours of experience now,” Bethard says, referencing the mastery concept popularized by Malcolm Gladwell. “We’re going to screw stuff up. There are going to be bad days. There’s going to be stuff that doesn’t work right. But we just keep going at it, and we’ll get it figured out.”

Strategic Location: The New Map

If these producers were to build a brand-new dairy in the next five to 10 years, their criteria for where that would be has fundamentally changed. The days of building a dairy and waiting for a processor to knock on the door are over.

“You have to have a contract before you can even build now,” Bethard notes. Beyond the milk market, his checklist for a new location is focused on risk mitigation: “I’d choose a place with low environmental risk and a place without a lot of people.”

Tuls’ answer is even more direct: “Close to a milk plant.” As transportation costs and regional milk marketing orders become more complex, the proximity to processing is the ultimate hedge against logistics volatility.

The Next Generation

For Hafliger, the infinite nature of the business is personified by his family. With 16 grandchildren, some of whom are already starting to count cows, the focus is on creating a viable structure they can inherit.

Hafliger’s best strategic move was moving to Idaho and partnering with his son and sons-in-law to run three dairies as a single, unified unit.

“By running them as one, we don’t have that ‘my dairy is doing better than yours’ conflict,” Hafliger says. “It’s about maturity, learning to relax and let things happen rather than trying to force them. That makes the business much more rewarding.”

The infinite business model isn’t just about milk production; it’s about the endurance of the ag-entrepreneur. By avoiding the short-term pressures of private equity, embracing the costly “tuition” of their mistakes and strategically positioning themselves near processing hubs, these producers are ensuring that their operations are built to last for the next half-century.

The Cows, The Cows, The Cows: Inside the High-Speed Surge of U.S. Milk Production

Mon, 23 Mar 2026 14:05:26 GMT

The latest USDA milk production report sent a clear signal: The U.S. dairy industry is in a phase of significant expansion. While the rhythm of farm life is often characterized by the slow, steady turn of the seasons, data from February 2026 reveals a sector moving with a level of momentum that has caught even seasoned analysts by surprise.

Across the U.S., milk production reached 18.3 billion lbs. in February, a 2.9% increase over the same month in 2025. When looking at the 24 major dairy-producing states, the growth was even more pronounced at 3.1%. This isn’t just a minor fluctuation; it is a testament to a “more and better” strategy being deployed across the country’s milk sheds.

The Engine of Growth: More Cows, More Milk

To understand the big picture, one must look at the two primary levers of dairy production: herd size and efficiency. According to the report, the U.S. is pulling both levers simultaneously.

Phil Plourd, president of Ever.Ag Insights, notes that the sheer volume of animals entering the supply chain is the defining characteristic of this report.

“At the risk of sounding like a broken record, this report is about the cows, the cows, the cows,” he says. “With 211,000 more milking animals in the U.S. herd compared to last year, it’s difficult to imagine a major retreat in output over the next several months. Plus, on paper, we’ve seen significant improvement in prospective on-farm margins over the past several weeks. To me, that says more milk, too.”

The numbers bear this out. The national dairy herd has climbed to 9.62 million head, an increase of 211,000 cows compared to February 2025. Perhaps more telling is the month-over-month growth; the herd grew by 15,000 head between January and February 2026 alone. Plourd points to light slaughter and high retention as the primary drivers behind the rising cow counts nationwide.

This suggests a high level of producer confidence and underscores the massive wave of capital investment in new facilities and herd expansions.

However, the story isn’t just about the number of cows; it’s about what those cows are producing. Production per cow averaged 1,899 lbs. for the month, up 12 lbs. from the previous year. This incremental gain in efficiency — driven by advancements in genetics, precision nutrition and cow comfort — is the quiet driver of the industry’s record-breaking numbers. Today’s dairy cow is a marvel of biological efficiency, producing more with a smaller environmental footprint per gallon than ever before.

Perhaps the most compelling aspect of the March 2026 report is the geographic migration of milk production. The center of gravity for the U.S. dairy industry is shifting. While traditional dairy regions in the West and Northeast are facing significant headwinds, the High Plains and the I-29 corridor are experiencing an era of explosive growth.

The Standouts

Kansas: The absolute leader in the expansion race, Kansas saw a staggering 28.7% increase in production. This was fueled by a massive jump in herd size, adding 51,000 head in a single year, and a notable increase in milk per cow. Kansas is rapidly maturing into a premier dairy hub, likely driven by the arrival of new, large-scale processing capacity and favorable regional economics that make it an attractive destination for relocating dairies.
South Dakota: Continuing its decade-long trend of aggressive expansion, South Dakota posted a 10.6% increase in production. The state added 23,000 cows to its total, cementing its status as the growth engine for the northern Plains.
Texas: The Lone Star State remains a dominant powerhouse. Despite its already massive scale, Texas managed a 5.2% increase in production, adding 34,000 cows to its herd over the last 12 months.

The Challenges

The growth, however, is not universal. Some regions are seeing a marked contraction. New Mexico saw production drop by 5.7%, and Washington state fell by 4.5%. These declines are often attributed to a perfect storm of challenges: tightening environmental regulations, high land costs, labor shortages and shifting water availability. In many cases, the “missing” cows from these states aren’t leaving the industry entirely; they are being moved to the more dairy-friendly climates of the Plains.

The January Revision: A Stronger Start than Realized

The March report also contained a crucial update to the January figures that changes how we view the start of the year. Initial estimates for January were revised upward to 19.1 billion lbs. for the 24 major states, representing a 3.6% increase over 2025.

This revision is vital because it suggests the industry entered 2026 with even more gas in the tank than analysts first realized. When the first two months of the year show such robust, consistent year-over-year growth, it sets a high bar for the remainder of the year. It also signals that the spring flush — the period of peak seasonal production — could be one of the most productive in U.S. history.

Double-Edged Sword of Success

For the U.S. dairy farmer, this big picture is a double-edged sword. On one hand, the data showcases an incredibly resilient and efficient industry. The ability to increase both herd size and per-cow productivity simultaneously is a feat of modern agriculture that ensures a stable, affordable supply of dairy products for a growing global population.

On the other hand, a 3% surge in production puts immense pressure on the entire dairy ecosystem. The most immediate concern is processing capacity. As milk production outpaces the ability of plants to turn that raw product into cheese, butter or powder, the basis for milk prices can weaken.

Furthermore, the industry must find a home for this additional volume. With the U.S. domestic market relatively mature, the burden of this growth falls on the export market. To prevent a supply glut that could depress on-farm milk prices, the U.S. must remain competitive on the global stage, navigating volatile trade waters and shifting international demand.

An Industry in Motion

As we move further into 2026, the dairy industry will be watching to see if this February surge is a temporary peak or the new baseline for American production. With cow numbers rising and efficiency improving at a steady clip, the industry isn’t just growing; it is evolving into a more concentrated, more efficient, and more geographically focused version of itself.

The “Grace of Stillness” may be a valuable lesson for personal healing, but in the dairy world of 2026, the rhythm is one of undeniable, high-velocity growth. The challenge for producers and processors alike will be to manage this expansion with the same precision they use to manage their herds, ensuring that the surge in production leads to a sustainable and profitable future for the next generation of dairy farm families.

From Handshakes to High-Speed Data: The New Reality of Dairy Lending

Mon, 09 Mar 2026 12:26:51 GMT

For decades, the relationship between a dairy farmer and a lender was often built on a firm handshake and a look at last year’s tax returns. But in the modern dairy landscape, the handshake has been replaced by a high-speed data transfer.

To the uninitiated, the mountain of spreadsheets, herd monitoring reports and feed inventories required for a loan might feel like a bureaucratic hurdle. To Ashley Vande Zande, senior credit officer for Compeer Financial, and Gary Sipiorski, an independent dairy financial consultant, that data is something much more powerful: It is a story.

Painting the Picture

“Detailed data helps paint a picture of your farming operation,” Vande Zande says.

When a loan moves from a farmer’s kitchen table to a lender’s desk, it travels through a gauntlet of departments from origination to underwriting to final funding. In those back offices, the people making decisions haven’t walked your pens or seen your new parlor.

The data acts as their eyes. Accurate, complete and detailed records allow a lender to develop financial trends. These trends aren’t just numbers; they are an analysis of the borrower’s balance sheet and earnings that identify hidden strengths and calculate true borrowing power.

Without the data, the picture is a blur; with it, the lender can see exactly where the operation stands today and, more importantly, where it can go.

The Cow-Side Connection

One might wonder why a credit officer cares about herd monitoring records or cow flow. For Vande Zande, these metrics are the leading indicators of financial success.

“Submitting herd monitoring or feed information allows us to drill down into the operation’s herd health and production,” she explains.

Consider a farmer who invests in improved cow comfort or a more precise ration. The immediate result is a spike in milk production. In the eyes of a data-savvy lender, that spike isn’t just a win for the cows; it’s a forecasting tool. Improved production trends suggest higher future revenue, which leads to better efficiency ratios. This historical data cements past performance and allows the lender to structure a loan that suits the operation’s specific repayment ability.

Furthermore, these records turn “invisible” assets into collateral. Detailed machinery listings and inventory spreadsheets provide a clear understanding of the assets available to secure a loan, giving the farmer more leverage and the lender more confidence.

The Consultant’s Checklist

Sipiorski, who has spent decades navigating the bridge between the barn and the bank, views data as the ultimate tool for financial soundness.

“Financial data are the only way a lender can determine a farm’s profitability,” Sipiorski says. “As long as a farm wants to borrow money, lenders will demand data.”

Sipiorski notes that while technology like RFID tags and computer outputs are great for management, the lender is looking for four financial pillars:

Solvency — Can the farm survive a market hit?
Liquidity — Can the farm pay its bills on Tuesday?
Profitability — Is there actual net income after the dust settles?
Repayment ability — Can the operation cover principal and interest without breaking?

Lenders may evaluate as many as 25 different items, ranging from debt per cow to the increasingly vital metric of debt per hundredweight (cwt) of milk. These numbers ensure that a loan is a ladder, not a weight. As Sipiorski bluntly puts it: “No lender wants to set up a farm to fail.”

The Partnership Model

At the heart of this data obsession is a shift in the philosophy of ag lending. For lenders like Compeer Financial, the goal isn’t just to be a source of capital but rather a partner in the operation’s future.

“We really want to partner with our clients, so they understand every aspect of their finances,” Vande Zande says. “We’re here to help crunch the data so they know where they stand today and where they can go in the future.”

By sharing data, the adversarial nature of the bank-client relationship disappears. Instead of a farmer asking for money and a banker looking for reasons to say no, the two parties work together to establish specific steps to work toward long-term goals. The data allows the lender to understand the industry factors, both positive and negative, that have affected the operation, allowing them to build a loan structure that survives the volatility of the dairy market.

The Bottom Line

Combing through data and financial planning can be an overwhelming part of running a dairy, but it is the only way to move from surviving to thriving. In today’s modern era, the most successful dairy farmers aren’t just experts at cow comfort or crop yields; they are masters of their own farm information.

When you hand over your data, you aren’t just fulfilling a requirement; you are giving your lender the tools they need to help you win.

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Reciprocity and Balance: The New Blueprint for U.S. Agricultural Trade Agreements

Thu, 05 Mar 2026 21:01:57 GMT

Ambassador Julie Callahan is the chief ag negotiator at the U.S. Trade Representative, and she reports positive momentum toward rebuilding trade agreements equating to a positive U.S. ag trade balance.

“We came into a situation in January 2025 where the US ag trade deficit was ballooning in a really unsustainable manner,” she says.

At the beginning of 2025, USDA forecasted a $50 billion deficit for U.S. agricultral trade.

“Compare that to an agricultural trade surplus in 2020 when President Trump left office, of a $6 billion surplus. So we were $56 billion in the hole, you might say, at the beginning of the administration, but through the efforts of the president ensuring trading partners understand they need to treat U.S. farmers and ranchers right, we are seeing real shifts in our trade balance and chipping away at the deficit toward a surplus.”

Trade Wins Highlighted by Government Officials

Callahan points to eight signed trade agreements with: Malaysia, Cambodia, El Salvador, Guatemala, Argentina, Bangladesh, Taiwan and Indonesia. She says these are binding agreements, where the foreign governments are:

lowering tariffs for U.S. ag products
removing unfair trade practices
and lifting regulatory barriers

“These are serious binding trade agreements that will deliver real value for U.S. farmers and ranchers,” Callahan says. And when asked if Congressional action to codify agreements is necessary, Callahan says that action would be supported but should not be necessary.

“These foreign governments have made binding commitments in terms of adjusting tariff schedules, they are also making regulatory changes. USTR will be enforcing these agreements. They are enforceable.”

Examples of enforceable commitments include:

Indonesia removes its import licensing requirements
Malaysia accepts facilities on their registration list as long as FSIS has them on their list

The Future of the U.S./China Trade Relationship

At the 2026 Top Producer Summit, Lyu Jiang, minister for economic and commercial affairs at the Chinese Embassy in the U.S., characterized the U.S. and Chinese relationship being a phase of stabilization.

When prompted to react, Callahan agreed saying, “We very much want a stable, predictable, transactional relationship with our Chinese counterparts. We do want to normalize, bring reciprocity and balance back to our trade relationship and ensure that U.S. farmers, and ranchers can benefit from the Chinese market again.”

She says her office is balancing the agricultural stakeholders wanting access to the large-scale Chinese market with a strategy to also diversify trade partnerships as to not be too reliant on a single country.

“We are working through the agreement on reciprocal trade to diversify our markets so we don’t overly rely on China,” she says. “We are looking to address that very serious situation where China may see agriculture as a pain point for the United States.”

With the upcoming meeting of President Trump and President Xi in April, Callahan says her team and the larger U.S. trade team is working to prepare and set the stage for a positive outcome. Callahan points to specific issues to be worked through and market focuses spanning crops and livestock.

“Both sides want the meetings to be a success,” she says. “Certainly, in the meetings leading up to the president level discussion, we will be having open and frank conversations with China where we need to see areas of improvement. That’s not limited to soybeans to sorghum. Our beef producers don’t have access to China due to China’s unfortunate actions that are not renewing facility registrations.”

The Review of USMCA

With a goal of “reciprocity and balance across north America” the trade team is working on its review of the North American trade deal.

“We absolutely understand the importance of USMCA for U.S. farmers and ranchers,” Callahan says.

Describing this as a “comprehensive review” she says that spans:

Look at what is working
Maintain what is working
Improve on areas not be delivering the benefits U.S. farmers and ranchers expect

She brings up the overall trade balance with Canada and specifically, Canadian dairy.

“With Canada, we went from a $3 billion deficit in 2020 and now we have an $11 billion ag trade deficit. So there are certainly areas for improvement, and we’re taking all of our stakeholders’ comments into consideration,” Callahan says.

The Succession Gap: Why Two-Thirds of Farms Face an Uncertain Future

Tue, 03 Mar 2026 20:18:09 GMT

Farm Journal recently reported that 44 million acres of U.S. farmland are expected to change hands in the coming years - nearly 15% of American cropland by 2030.

That’s a staggering number. But what concerns me most isn’t just the acreage. It’s what that number represents: leadership transition, ownership transition and decision-making transition happening all at once across the country.

When I look at the accompanying data, I see both opportunity and vulnerability.

According to the Farm Journal Seed & Planting Survey and Consolidation Index Predictive Model Analysis, only 34% of growing operations have a formal succession plan. Among benchmark producers, that number drops to 29%. For operations identified as at-risk, just 21% have a documented succession plan in place.

Let that sink in.

Even among farms positioned for growth, two-thirds do not have a formal plan for how leadership and ownership will transition. And nearly four out of five at-risk farms are operating without one.

At the same time, consolidation risk is not limited to smaller operations. Farms under $250,000 in gross income show a 58% consolidation risk. Farms between $250,000 and $500,000 show 48%. But even operations in the $1 million to $2.5 million range carry a 32% risk. And those between $2.5 million and $10 million still sit in a baseline consolidation risk zone of roughly 27–30%.

In other words, income alone does not protect you.

Succession gaps, management transitions and strategic exits are driving consolidation regardless of size.

I’ve spent my career working with agricultural families navigating generational transition, and I can tell you this: consolidation rarely happens overnight. It happens when pressure meets unpreparedness. A health event. A lender conversation. A market downturn. A disagreement that was never resolved. A next generation that was never fully developed or clearly empowered to lead.

Agriculture has always been unpredictable. We all understand that. Weather changes. Markets move. Policies shift. But what feels different right now is how layered the uncertainty has become. Interest rates have restructured balance sheets. Input costs remain volatile. Capital demands continue to rise. Technology expectations are accelerating. And the average age of the American farmer keeps climbing.

Generational turnover is not something we can push off for “someday.” It is happening now.

So, here’s the question I would ask any farm leader reading this: If something unexpected happened tomorrow, would your operation be okay?

Would there be clarity about who makes decisions? Would ownership be clearly defined? Would compensation and reinvestment policies be understood? Would lenders feel confident in your continuity? Would your successors be prepared - not just present - to lead?

If you hesitate in answering that, you are not alone. But hesitation is a signal.

The data in the Farm Journal analysis tells an important story. Growing operations are more likely to try new technology. They are more likely to plan land investment. And they are more likely to have formal succession plans in place. That is not coincidence. It reflects intentional leadership.

The leaders that plan tend to think about the long term - not just the next growing season. They understand their profitability by enterprise. They are disciplined about capital allocation. They define leadership roles. They have hard conversations before circumstances force communication. They build clarity into the business so that transition strengthens it rather than destabilizes it.

Succession planning is often misunderstood.

It is not simply an estate planning document. It is not a will tucked in a drawer. It is not something you address only when someone retires. It is a business discipline.

It requires clarity about management transfer and ownership transfer - and those are not always the same thing. It requires fairness, which is not necessarily equality. It requires governance structure so family conversations don’t become a business crises. It requires intentional development of the next generation so leadership transition feels earned and prepared, not assumed.

And perhaps most importantly, it requires timing.

Consolidation favors clarity. It favors farms that reduce ambiguity before outside forces expose it. It favors operations that are structured - not just successful.

One of the most revealing pieces of the consolidation data is that even higher-income farms carry measurable risk. A $3 million or $5 million operation is not immune. Scale does not eliminate vulnerability if leadership transition is unclear or strategic direction is undefined.

The 44 million acres projected to change hands represent a defining moment for American agriculture. Some families will use this season to strengthen continuity and expand. Others will find themselves reacting - not because they lacked work ethic or competence, but because they delayed putting structure in place.

Planning does not eliminate uncertainty - but it does provide framework and stability.

It allows you to make proactive decisions rather than reactive ones. It gives lenders confidence. It gives the next generation clarity. It protects family relationships. And it preserves optionality.

If your farm is truly okay - strategically aligned, financially transparent, leadership-ready - then planning becomes a growth tool.

If it’s not, planning becomes urgent.

Either way, it matters.

Knowing the data should never create paralysis. Understanding your consolidation risk, your succession gaps and your financial position gives you something incredibly valuable: choice. When your business structure is clear and your succession plan is thoughtful but flexible, you can pivot as markets shift, opportunities emerge or circumstances change. You may not be able to eliminate uncertainty - but you can position yourself to move through it with confidence.

Employer of Fatal Colorado Dairy Accident Addresses Rumors and OSHA Citations

Wed, 25 Feb 2026 18:08:04 GMT

In August 2025, six lives were lost on a Colorado dairy farm as a result of a tragic accident involving exposure to hydrogen sulfide, or H2S. This loss has shaken not only the families, but also the victims’ local Weld County communities.

Four of the victims were employees of HPR, or High Plains Robotics, a dairy equipment company based in Johnstown, Colo. – one of several outside contractors whom the dairy hires to service its equipment. Jorge Sanchez Pena, 36, was a service manager. Alejandro Espinoza Cruz, 50, and Carlos Espinoza Prado, 29, were service technicians. Oscar Espinoza Leos, 17, was an intern. The other two victims were employees of the dairy where the accident occurred.

“Losing these guys is something we have felt and grieved every day since the accident,” says Kevin Fiske, owner of HPR. “As a local, family-owned company, we have never been through anything like this, and the families they have left behind have been first and foremost on our minds.”

Throughout the six months since the accident, OSHA has been completing its investigation at the dairy.

“The only ones who truly know what happened are no longer with us, but we do know that the HPR employees were experienced and careful.” Fiske says. “The four men would not have put themselves or others in harm’s way if the extent of the danger had been even a possibility in their mind.”

As of mid-February, 2026, OSHA completed its investigation, assigning citations to HPR, the dairy and another contractor. Citations to HPR include failure to protect employees from hazardous atmospheres and failure to provide hydrogen sulfide detection training.

“We’ve been supportive throughout the investigation, answering questions and providing documentation,” Fiske says. “We disagree with the findings, and we’re exploring our next steps.”

According to a statement from OSHA, the investigation also concluded an HPR employee and a Prospect Ranch employee attempted to stop the flow but were overcome by the gas. Subsequently, three more HPR employees and one Prospect Ranch employee entered the pump room, which led to the loss of a total of six workers.

In light of the release of the OSHA citations, HPR has released the following statement:

“Our hearts are heavy as we review OSHA’s citations related to the accident that claimed the lives of four of our employees in August 2025. We have cooperated with the investigation proceedings to date. While we disagree with the findings and are reviewing our options to determine next steps, we are focused on doing what is in our power to ensure that a tragedy like this never happens again.

The men that we lost were not only pillars of their families and communities, but they were also valuable and respected members of HPR. We share in the grief of their untimely passing. As employees of HPR, their pride in their work was evidenced by the diligence with which they served our dairy customers.”

“I just wish everyone knew how great these guys were at their jobs,” Fiske says. “A few of them had been with us at HPR for years, and we knew them like family. They were some of the best dairy technicians around.

“They were sons, husbands, dads, brothers, uncles, grandfathers. The accident was just that – an accident. They are so dearly missed by so many, and will be for years to come.”

Dairy's 2026 Safety Net: Producers are Moving from DMC to DRP

Tue, 24 Feb 2026 14:56:55 GMT

In the high-stakes world of dairy production, the margin between a profitable versus a catastrophic year is often measured in pennies. For decades, the industry relied on a relatively simple equation: the price of milk minus the price of feed. In 2026, that equation is more complex. The tools that once served as a reliable safety net are now facing a paradox – a reality where the data says producers are thriving, but the checkbook says otherwise.

To understand the future of dairy survival, the two pillars of the federal safety net must be dissected: Dairy Margin Coverage (DMC) and Dairy Revenue Protection (DRP). While one is a legacy program struggling to adapt to a world of hidden costs, the other is a flexible, high-tech shield that is rapidly becoming the industry standard.

The Dairy Margin Coverage Era: A Foundation in Flux

The Dairy Margin Coverage program, created by the 2018 farm bill, was designed to be the ultimate insulator against market shocks. Through various iterations from the 2014 farm bill’s Margin Protection Program for Dairy (MPP-Dairy) to the current DMC program, the program has been a statistical success. For most producers, the math is compelling: An average premium of 15 cents per cwt yields an average payment of $1 per cwt.

The structure for DMC, which is administered by the Farm Service Agency (FSA), is simple. Tier 1 offers a “safe harbor” for the first 5 million pounds of production, allowing for coverage up to $9.50 per cwt. Tier 2 allows larger operations to cover their excess production at a lower $8 cap and higher premiums.

However, the “success” of the DMC has hit a wall and is increasingly becoming a thing of the past. The formula relies on four main ingredients: the National All-Milk Price, corn, soybean meal and premium alfalfa. When these crop prices are low, the “calculated” margin looks healthy.

This is where the paradox lies.

“When crop prices are this low, it makes the milk margin under the DMC program look really high on paper, which is why the program didn’t trigger payments at any coverage level between May 2024 and November 2025,” says Danny Munch with the American Farm Bureau Federation.

The December 2025 pricing data finally points to the first payments in more than a year, but only for producers covered at the highest available $9.50 margin (at a $9.42 per cwt margin), he adds.

According to Katie Burgess with Ever.Ag, the DMC program uses national numbers for both the milk price and feed costs, so it has never really reflected the reality of any individual dairy operation.

“For the sake of keeping it simple and straight forward, I believe [the DMC program] does a fine job of representing a margin over feed. Of course, it’s not capturing the non-milk or feed data, so it’s not accounting for the higher non-feed costs the past few years. It’s also not making any adjustments for higher cull cow and calf revenue either,” she says. “For a producer really looking to dial in their margins, it’s not perfect. But, for a producer looking for some basic coverage against falling milk prices or rising feed costs, it does the trick – especially when you consider it comes at an affordable premium cost of 15 cents per hundredweight for the $9.50-margin Tier 1 coverage.”

The “Hidden Cost” Crisis

The primary criticism of the current DMC is its simplicity. Grant Grinstead with Vir-Clar Farms in Wis., says the DMC formula doesn’t account for modern cost factors.

“There are so many other cost factors that come into play now versus just feed,” he says. “I think we’re still missing some of that for true risk protection ... it makes us look like we’re doing better than we are.”

“The additives, minerals and fuel costs — those costs play a role,” Munch adds.

Beyond inputs, there is the massive, uncounted elephant in the room: labor. In fact, since 2016, the cost of keeping a reliable team on the ground has surged by 30% to 50%, driven by a tightening rural workforce and rising cost of living. This especially holds true for farms in states that have mandated overtime laws for dairy employees.

As dairy operations scale, labor has moved from a minor line item to one of the largest expenses on the balance sheet. Because DMC only looks at feed, a producer can be losing money on every gallon of milk due to labor and fuel, yet USDA data will show they are operating in a “healthy” margin.

Industry leaders are now “ringing the bell” for a formula enhancement. Suggestions include a “floor” for feed costs to protect those who grow their own crops or the inclusion of a “total cost of production” index that accounts for the reality of additives, minerals and human capital.

The Rise of Dairy Revenue Protection

As the DMC program struggles with its rigid formula, producers are shifting to a more surgical tool: DRP. Launched by the USDA Risk Management Agency in 2018, the program covered nearly 30% of all U.S. milk production in 2025.

Unlike the DMC, which focuses on the margin, DRP is designed to insure against unexpected declines in quarterly revenue. It is a “fluid” policy — markets change daily, and the coverage can be adjusted to match. For the lifetime of the program through 2025, net indemnities to producers have totaled more than $850 million, proving its effectiveness in a volatile market. Through the first three quarters in 2025, the program paid out a net of $31 million, but according to Phil Plourd, president of Ever.Ag, that number will go up considerably once Q4 figures land, estimated at an additional $150 million.

Ken McCarty, co-owner of McCarty Family Farms in Rexford, Kan., says that in their experience DMC is less applicable to a farm of their size compared to DRP.

“We believe that it is important that all safety net programs are kept nimble enough to adjust to changing market dynamics and the evolution of the dairy industry,” he says.

Grinstead views risk management as a way to provide control points for the business, ensuring the farm survives the future. Since 2019, Grinstead has utilized DRP as a net-positive tool for Vir-Clar Farms, managing his strategy at least a year in advance to secure incremental margins. After experiencing a significant premium loss during the COVID-19 pandemic, he shifted to combining DRP with options to protect his financial downside while still participating in potential market rallies.

“We’re not looking for home runs,” he shares. “We’re looking for base hits and just kind of driving our business through some control points and being here for the next generation tomorrow.”

5 Pillars of the Dairy Revenue Protection Strategy

For producers, DRP offers five advantages DMC cannot match:

1. Class vs. Component Pricing. DRP allows producers to choose how their milk is valued. Class pricing (Class III and IV) is ideal for those focused on fluid volume. However, for the rising number of Jersey and high-component herds, component pricing is a game-changer. It allows producers to establish an insured price based on butterfat, protein and other solids.

2. Flexible Coverage Levels. Producers aren’t locked into a “one-size-fits-all” tier. They can cover up to 100% of their expected production at levels between 80% and 95%. This allows a producer to “buy what they need” based on their specific break-even points.

3. State-Level Indexing. DRP is not a national average; it is indexed to the state or region where the producer is located. This accounts for regional basis and production fluctuations, making the indemnity much more accurate to the producer’s actual loss.

4. Natural Market Protection. DRP is a pure market tool. It covers revenue loss caused by natural occurrences in market prices and yields. While it doesn’t cover the death of cattle or management errors, it provides a “floor” that allows a producer to keep doing business even when the global market turns sour.

5. The 2026 Evolution. The program is not stagnant. For the 2026 crop year, several key revisions are being implemented to protect the integrity of the program and the producer. This includes a new “Insured’s Certification Against Subsidy Capture,” ensuring the program remains a legitimate insurance tool rather than a speculative one. Most importantly for herd health, the 2026 revisions include language that considers animal disease a “natural disaster” event that can trigger coverage if it prevents a producer from marketing milk.

“We continue to see strong interest in DRP insurance, as it helps protect against falling milk prices regardless of what feed prices do,” Burgess shares. “It’s especially useful for producers with output of more than 6 million pounds annually who can’t fully cover their production with the DMC program.”

Even if a producer can cover all their milk with DMC, it is also a good idea to have a DRP policy because many times DRP allows them to lock in a higher milk price than what would be protected by DMC, she adds.

“For instance, in 2025, many DRP policies saw sizable claim payouts whereas DMC only had an 8 cent payout in December,” Burgess notes. “Both DMC and DRP are useful programs, but knowing the strengths and weaknesses of each is important to make sure you are using the right tool for the job.”

The sign-up period for the 2026 DMC is still open, but time is quickly running out. Producers have until Feb. 26 to lock in coverage, and current market conditions suggest payments can be expected throughout 2026.

Why High Protein Demand Isn’t Raising Your Milk Check

Mon, 23 Feb 2026 14:09:09 GMT

For the owner of a 700-cow dairy, the math of 2025 and 2026 isn’t just a line item on a spreadsheet — it’s a $275,000 hit to the bottom line. In an industry where margins are often measured in pennies, a slump of that magnitude can feel like a recession. But according to Ben Laine, Terrain’s senior dairy analyst, what we are seeing isn’t necessarily a total industry collapse; it is a high-stakes evolution.

In a recent deep-dive into the dairy markets, Laine dissected the inverse world of milk pricing, the growing reliance on beef-on-dairy revenue, and why the industry’s current short-term pain might be the necessary precursor to long-term gains.

High Demand Doesn’t Always Equal High Checks

Walk into any grocery store and the trend is undeniable. If a product doesn’t have “20g of protein” emblazoned on the label, it’s behind the curve. Consumers are insatiable for whey protein, shakes and bars. Logic suggests this surge in demand should be a windfall for dairy producers. However, Laine points out a unique quirk in federal order pricing that often leaves producers confused.

“The protein demand story is very positive,” Laine explains. “But the fact that protein values are high on milk checks right now is really more a function of the fact that butter values are low.”

Under the current federal order structure, protein value is often inverse to butter value. When butter prices fall — as they have recently — protein values automatically climb, regardless of whether a single extra shake was sold. This means producers must be careful not to mistake a pricing quirk for a long-term demand signal. While the long-term demand for protein is real and growing, the milk check doesn’t always reflect it in a straight line.

The Second-Half Rebound

The weak start to the 2025/2026 season is largely a result of a global oversupply. The U.S., Europe and New Zealand all saw production surges that hit the market simultaneously. However, Laine is optimistic this slump won’t be a multi-year trough like those seen in the past.

“I’m hopeful that this is a pretty short-lived trend,” Laine says. “We’re starting to see slaughter rates pick up, which moves us in the right direction toward reining in that oversupply. I expect to see prices improve in the second half of the year as global prices rise and our export values regain strength.”

The silver lining of low prices is that they often spur demand. As consumers find relief at the grocery store, and as U.S. cheese remains competitive on the global market, the surplus should begin to clear — setting the stage for a rebound by late 2026.

The Black Calf and the Aging Herd

Perhaps the most significant structural change in the industry is the beef-on-dairy revolution. Estimates from groups like Dairy Farmers of America (DFA) suggest 70% of producers are now engaged in breeding dairy cows to beef bulls — a number Laine suspects might actually be higher.

This isn’t just a side hustle; it’s a survival strategy. At current market rates, the revenue from these black calves can add $3 to $4 per hundredweight to a milk check. This buffer is what allows many farms to weather the current low milk prices.

However, this trend is creating a secondary effect: a tightening heifer inventory.

“We have the lowest ratio of heifers to milk cows since the ‘90s,” Laine notes. “Producers are holding onto older cows for an extra lactation just to get one more high-value beef calf.”

While this has caught the market off guard, Laine isn’t panicked. He argues the industry is becoming more surgical with its genetics. Producers are only breeding their absolute best animals for replacements, resulting in a smaller, but genetically superior, pool of heifers. While the industry may eventually find itself wishing for more replacements in the pipeline, the current expert management of the herd is keeping production levels surprisingly resilient.

The $11 Billion Question: Where Does the Milk Go?

The dairy industry is currently in the middle of a massive $11 billion processing expansion. New plants are popping up in regions like Kansas, where production is exploding to fill the new capacity. Laine notes that while this gives milk a place to go, it creates a new challenge at the other end of the plant.

“It’s a positive that we’re not seeing base programs or limitations because we have processing capacity,” Laine says. “But then we have to make sure there’s a place for the finished product — the cheese or the whey — to go. Often, that means exporting at lower prices than we’d like, but it’s better than having nowhere to send the milk.”

Diversification as a Shield

When asked if the industry is on the verge of a recession, Laine’s answer is a firm “no.” He views the current climate as an evolution rather than a decline. The modern dairy farm is no longer a single-commodity business. Between beef-on-dairy revenue, manure digesters producing natural gas, and carbon credits (LCFS), the revenue streams are more diversified than ever before.

“It’s not just about milk prices anymore,” Laine concludes. “We’ve developed better tools for managing risk, and we have additional revenue streams that help weather these storms better than in the past.”

For the American dairy farmer, the message of 2026 is one of grit and perspective. While the base milk price may feel like a flashback to leaner times, the tools at the farmer’s disposal — from genetic precision to renewable energy — are firmly planted in the future. The moment dairy is having is one of transformation, proving that even when the check stays stagnant, the farmer never stops moving forward.

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USDA to Buy $148 Million in Dairy Products, But Will it be a Major Market Mover?

Thu, 19 Feb 2026 19:14:47 GMT

USDA is helping create an additional outlet for milk, cheese and butter by purchasing millions of dollars’ worth of dairy products for food banks and federal nutrition programs.

In a recent announcement, U.S. Secretary of Agriculture Brooke Rollins shared USDA’s plans to purchase up to $263 million in agricultural products through the department’s Section 32 authority under the Agriculture Act of 1935. Of that total, nearly $148 million is earmarked specifically for dairy products, including butter, cheese and milk.

“These staples are essential for feeding families and sustaining America’s agricultural economy,” Rollins says, emphasizing the purchases are designed to deliver real food to Americans while injecting dollars back into rural communities.

The move by USDA closely aligns with a formal request made by the National Milk Producers Federation (NMPF) late last year.

“These are almost exactly the numbers that we sent [in] a request to the Secretary on Nov. 25,” says Gregg Doud, president and CEO of NMPF, during an interview with “AgriTalk” host, Chip Flory. “We ran our analysis, suggested what we thought aligned with USDA’s historical dairy Section 32 purchases, and USDA agreed and announced it this morning.”

What’s Included for Dairy

According to USDA, the planned dairy purchases will include:

Butter: $75 million
Cheddar cheese and cheese products: $32.5 million
Swiss cheese: $10 million
Fresh fluid milk: $20.5 million
Ultra-high temperature (UHT) milk: $10 million

For dairy farmers, the purchases could help absorb product during periods of tight margins and volatile milk prices.

“Dairy farmers have shared in the struggles faced throughout the agricultural economy, and these purchases will provide important relief to producers who will benefit from the additional demand, helping them provide nutritious dairy products to Americans and the world,” Doud says.

He notes NMPF has been particularly focused on the butter market, where supply and demand have been misaligned.

“We were especially looking at the butter market,” he says. “Right now, we’re looking for any demand under any rock we can find in the dairy business.”

Rollins emphasized the purchases are designed to support not only dairy farmers, but also the broader network of jobs tied to dairy production.

“These Section 32 purchases help stabilize farm income while supporting rural jobs tied to dairy processing, transportation and manufacturing,” Rollins says. “By turning farm production into meals, we’re supporting the farmers who feed America.”

Market Impact: Helpful, But Not A Game-Changer

While these new purchases made by USDA will help provide support, Phil Plourd, head of market intelligence for Ever.Ag, notes the impact on prices could be modest in scale.

“This is one of the ways that low prices can work to cure low prices,” Plourd says. “Without the details — especially on timing — it’s difficult to offer much specific commentary on potential price impact. At first blush, the commitment to buy butter seems substantial. Based on recent solicitations and purchases, we’d guess that the $32.5 million for cheddar cheese and cheese products might buy about 18 million pounds. That’s not nothing, but if our math is accurate, it’s only about 5% of one month’s worth of U.S. output and less than 1% of annual production. But, the bottom line is straightforward: $148 million in additional dairy purchases counts as supportive.”

Doud echoes that view, noting while the purchases won’t transform markets overnight, they do provide meaningful support — especially for butter and cheese.

“148 million isn’t anything that’s going to be a huge market mover, but it certainly helps, especially on the butter side of the equation,” he says.

Ben Laine, senior dairy analyst at Terrain, adds that even though the purchase won’t dramatically shift markets, it should be positive news for prices.

“The purchase announcement should be favorable for milk prices,” Laine says. “We’re starting the year in an oversupplied situation, and most of the positivity in dairy markets so far has been around nonfat dry milk and whey. Support for butter and cheese in particular through these purchases should help round things out and provide more strength to milk prices.”

In the global dairy sector, Doud says signals from the international dairy market are starting to improve, offering more support for prices.

“The good news is we’re seeing these markets — dairy markets, butter markets and cheese markets in Europe — begin to turn around here a little bit,” Doud says. “The world market’s starting to turn, and every little bit helps in this kind of environment.”

That comes against the backdrop of robust U.S. dairy exports.

“The year-end trade numbers came out today, and U.S. dairy exports were tied for an all-time record at $9.5 billion, ” Doud notes. “U.S. dairy is the third-biggest ag exporter, behind corn and soybeans. We had a really good year in exports. We did really, really well in 2025 on cheese exports, an all-time record by a country mile.”

That strong export base, combined with USDA’s planned purchases, contributes to a steadier overall demand picture, with international buyers drawing product abroad and federal programs taking in additional volumes domestically.

How Section 32 Works

USDA’s Agricultural Marketing Service (AMS) purchases domestic agricultural products when market conditions call for extra support. The products are then distributed through nutrition programs run by USDA’s Food and Nutrition Service (FNS), including food banks participating in The Emergency Food Assistance Program (TEFAP).

For dairy processors, these purchases often mean larger orders for products like butter and cheese, which can indirectly help support farm-level milk demand. Historically, Section 32 has acted as a pressure valve for farmers during periods of oversupply or weak commercial demand, moving dairy out of commercial markets and into programs that feed families while keeping milk flowing off farms.

Broader Ag impact

In addition to dairy, USDA plans to purchase fruits, legumes and tree nuts, including:

Chickpeas: $12 million
Dried Beans (Black and Pinto): $25 million
Fresh Pears: $15 million
Lentils: $14 million
Pecans: $10 million
Split Peas: $24 million
Walnuts: $15 million

USDA says the combination of products helps strengthen the nation’s food safety net while reinforcing agriculture’s role in economic resilience.

With this action, the Trump administration says it is aiming to bolster American agriculture, support rural communities and ensure families in need have access to nutritious, domestically produced food.

Why the U.S. Milking Herd is Growing Despite Record-Low Replacement Numbers

Thu, 19 Feb 2026 15:09:47 GMT

The traditional “manual” for running a dairy farm is being rewritten in real-time. For decades, the math was straightforward: cull underperforming cows, raise as many replacement heifers as possible, and focus almost exclusively on fluid milk volume. Today, that equation has been upended by a historic surge in the beef market and a genomic revolution that is fundamentally changing the biological output of the American herd.

According to Abbi Prins, a livestock analysis from CoBank’s knowledge exchange division, the industry is currently navigating a structural shift where the value of a cow is no longer tied solely to her milk production, but to her role as a surrogate for the high-value beef market. This beef-on-dairy movement is redefining heifer inventories, culling strategies and the very composition of the milk hitting the processing plants.

The Heifer Inventory Paradox

The current state of the U.S. heifer inventory is a primary point of concern for the industry. Historically, a tight heifer supply would signal an impending contraction in milk production. However, the U.S. milking herd remains robust, sitting at over 9.5 million head — the largest in over 30 years.

According to Prins, the reason for this paradox isn’t just producers holding onto older cows; it is a calculated shift in how they view their elite genetics.

“The beef-on-dairy movement has played a huge role in where total inventories stand,” Prins explains. “Dairy producers have found that when it comes down to profitability, they are breeding their elite animals for replacements and everything else to beef. You get a better price for that animal selling it as a beef-cross than you do making an extra replacement heifer that you might not need.”

This strategy has rewritten the traditional culling manual. In the past, if a cow wasn’t covering her feed costs or was underperforming in the parlor, she was sent to the back door. Today, the black calf in her uterus — often worth upward of $1,400 — acts as a high-value insurance policy.

“The equation is not as conducive to culling anymore because of where the beef market stands,” Prins says. “The value of that beef-on-dairy calf is worth more than just selling that cow off to be culled. It’s the reason we’re keeping cows longer.”

Holstein Cows Who Milk Like Jerseys

While the herd is skewing older, it is also becoming remarkably more efficient in terms of components. Prins notes a sentiment shared by International Dairy Foods Association CEO Michael Dykes: modern Holsteins are starting to milk like Jerseys.

“The shift in genomics to be able to produce more components is a big deal,” Prins says. “We are seeing record butterfat and protein levels. Even though the milk price is strained, producers are adding $3 to $4 a hundredweight to the bottom line because of these beef-on-dairy calves and high component values.”

Prins dismissed concerns that keeping older cows longer would result in a loss of genetic potential for the national herd. Because producers are being much more surgical with their breeding — using gender-sorted semen on only their top-tier animals — the next generation of replacements is genetically superior to anything the industry has seen before. The older cows are simply serving as surrogates for the terminal beef market, fulfilling a dual purpose that keeps the farm’s balance sheet afloat.

Weathering the 2026 Storm

As Prins looks toward the next six to 12 months, her forecast is one of “sadly optimistic” realism. She anticipates a slow, strategic pullback in the national herd size rather than a massive move.

“If we send too many cows to the back door at once, we create other issues,” she warns. “I’m hoping for a slow trickle down in cow numbers over the next six months, which should hopefully help the milk price rebound as we move out of this oversupply situation.”

Regarding the beef market, Prins is keeping a close eye on USDA’s cattle reports. While a rebuilding of the beef herd is inevitable, she believes the dairy-beef market has at least two more years of strength.

“Even if we start rebuilding the beef herd, we have to keep extra heifers on the cow-calf ranch, which further contracts the immediate beef supply. With strong consumer demand, that beef-on-dairy price should stay buoyant for the next couple of years,” she says.

The Bullish Bottom Line

When asked if the dairy industry is on the verge of a recession, Prins remains cautious. She points out traditional metrics, like how much Dairy Margin Coverage (DMC) is paying, don’t account for cull cow revenue, calf sales or labor costs, and therefore don’t tell the whole story.

“If you look at milk income over feed cost, it looks tough,” Prins admits. “But if you add beef-on-dairy into the equation, we’re not looking so bad.”

For Prins, the path to long-term gains requires enduring some short-term pains. She remains bullish on the industry’s future, citing massive investments in dairy processing and the stability of feed costs — barring any catastrophic weather events.

“Agriculture is cyclical. The highs eventually end, and the lows eventually come back up,” she concludes. “Between the processing investment and the beef-on-dairy market, there are a lot of things to be bullish about. The dairy industry is in a good position to rebound without turning the table.”

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One Week Remains for 2026 DMC Enrollment as Margin Pressure Builds

Wed, 18 Feb 2026 20:20:20 GMT

The sign-up period for 2026 Dairy Margin Coverage (DMC) is still open, but time is quickly running out. Producers have until Feb. 26 to lock in coverage, and current market conditions suggest payments can be expected throughout 2026.

Why DMC Matters in 2026

Milk prices have started the year on the weak side, and with more milk coming from U.S. farms, plus plenty of product available on the world market, margins are expected to stay tight for much of the year. Lower feed costs have limited some of the downside, but the gap between milk income and overall production expenses continues to be narrow.

Because of those squeezed margins, analysts say early 2026 DMC payments are likely, with estimates pointing to more than $1 per hundredweight in support from January through April, followed by smaller payments into July.

Expanded Coverage Now Available

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, reauthorized the DMC program through 2031 and made several updates intended to improve its usefulness and flexibility. The changes reflect how milk production and risk management needs have evolved, particularly for small- and mid-sized operations that rely on DMC as a foundational safety net.

These improvements include:

Higher Tier 1 coverage – Tier 1 production increase from 5 million lb. to 6 million lb., allowing more milk to be insured at the lower premium.
New production history – All operations must establish updated production histories based on the highest milk marketings from 2021, 2022 or 2023, while newer operations will use their first year of production data. Milk marketing statements or other documentation will be required.
Multiyear enrollment with discounts – Producers can lock in coverage for 2026–2031 and receive a 25% discount on premium fees.
Flexible coverage options – Multiple levels remain available, including a catastrophic option at a $100 administrative fee. USDA’s online dairy decision tool can help producers determine the best level of protection.

Your DMC Enrollment Checklist

With milk margins tightening and updated coverage options in place for 2026, producers may need to evaluate whether DMC fits into their overall risk management plans. This risk management plan is structured to provide payments when the margin between milk prices and feed costs falls below selected coverage levels and is commonly evaluated alongside tools such as Dairy Revenue Protection (DRP), Livestock Gross Margin (LGM) and futures or options strategies.

Before the enrollment deadline, producers should review the following items:

Verify Production History: Gather marketing statements from 2021, 2022 or 2023 to set your new baseline.
Evaluate Coverage Levels: Determine if the expanded 6 million lb. Tier 1 cap changes your strategy.
Compare Premium Costs: Weigh the 25% multiyear discount against your long-term cash flow goals.
Review Supplemental Tools: Consider how DMC works alongside Dairy Revenue Protection (DRP) or Livestock Gross Margin (LGM).
Assess Financial Goals: Determine how potential early-year payments fit into your 2026 budget.

How Do I Enroll in DMC?

To enroll in DMC, dairy producers must complete and submit an application to their local FSA office during the specified enrollment period, according to USDA. The application process includes providing production records and selecting the desired coverage level. Detailed enrollment instructions and deadlines are available through the local FSA office.

The Kansas Surge: How Processing Capacity is Redrawing the Dairy Map

Tue, 17 Feb 2026 14:21:50 GMT

In the world of dairy expansion, the old adage “if you build it, they will come” has found a modern home in the Sunflower State. While traditional dairy hubs like California face structural headwinds and regulatory constraints, Kansas is witnessing a period of tremendous growth that is fundamentally reshaping the industry’s geography. According to Phil Plourd of Ever.Ag, this surge is a direct result of alignment between massive new processing infrastructure and on-farm expansion.

The “Hillmar Effect” and the Processing Pull

The epicenter of the Kansas dairy boom is inextricably linked to the arrival of significant processing capacity, most notably the Hilmar plant. Plourd notes the relationship between producers and processors has entered a new phase of lockstep development.

“If you create an attractive situation, farmers are coming,” Plourd explains. “You need plant infrastructure to encourage farm investment, because otherwise, there’s really no home for the milk.”

This growth isn’t just coming from green site projects, but also from the aggressive expansion of existing operations. Dairy producers in western Kansas are finding being in proximity to new, high-capacity plants reduces transportation costs and provides a stable, long-term market for their milk. Unlike other regions, where base programs and production caps have been implemented to slow supply, Kansas is actively building the pipeline to handle more.

The Competitive Edge: Labor, Feed and Water

Beyond the plants, Kansas offers structural advantages that make it an attractive destination for large-scale dairying. Greg Bethard of High Plains Ponderosa Dairy has noted the region’s existing agricultural density — specifically the presence of large beef feedlots — creates a unique synergy.

“When you’re next to other feed yards and similar enterprises, it helps with labor,” Plourd says, echoing Bethard’s observations. The concentration of agricultural activity means a ready pool of skilled labor and service providers who understand large-animal agriculture.

Furthermore, Kansas remains a good feed area. The ability to grow high-quality forages locally, combined with what Plourd describes as “okay” water characteristics relative to other high-production regions, provides a level of cost-stability that is becoming harder to find on the West Coast.

Bethard, operating in the High Plains of Kansas, is already strategizing for a future with less water by transitioning his crop rotation toward wheat and soy, which requires fewer inputs than corn silage.

“We have to make sure that 30 years from now, we can still milk cows where we are,” Bethard says.

California’s Structural Stall

The growth in Kansas stands in sharp contrast to the situation in California. While California remains the nation’s top milk producer, Plourd sees very little structural growth happening there. Instead, the state is facing a period of consolidation and potential exits.

“We continue to see some sellouts there,” Plourd says. “It’s hard to do business in California on both ends of the spectrum. At the same time, California has a huge population and direct access to the Pacific Ocean for exports, so the industry will continue to see some baseline stability.”

While the current growth in Kansas is explosive, Plourd expects it to eventually reach a plateau.

“Once the new capacity is full, it’ll level off — unless somebody else builds something else,” he says. For now, the roadway is paved for the Sunflower State. As long as the infrastructure continues to expand, the cows will continue to follow, cementing Kansas as a cornerstone of the modern U.S. dairy landscape.

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Idaho’s $4 Billion Dairy Boom: Why the Gem State is Defying West Coast Trends

Agropur Announces $130 Million Investment in South Dakota and Wisconsin Dairy Plants

Fri, 13 Feb 2026 16:50:05 GMT

Agropur is signaling a high-conviction bet on the future of North American dairy, announcing a strategic $130 million investment across its Midwestern footprint. The move, unveiled during the cooperative’s annual general meeting on Feb. 11, targets high-growth markets for whey proteins and milk concentrates while capitalizing on the explosive production growth in South Dakota.

South Dakota: The New Frontier of Dairy Growth

The centerpiece of the expansion is a $60 million modernization of Agropur’s Lake Norden, S.D., facility. This investment is perfectly timed to coincide with South Dakota’s emergence as a national dairy powerhouse.

Over the last decade, South Dakota has transitioned into one of the fastest-growing dairy states in the U.S. While national milk production has faced headwinds, South Dakota has seen consistent year-over-year growth — often in the double digits — fueled by a favorable regulatory environment and the expansion of the I-29 corridor.

Production Surge: South Dakota recently broke into the top 15 dairy-producing states, with milk production jumping nearly 7% in 2023 alone.
Processing Powerhouse: The Lake Norden dryer upgrade will allow Agropur to pivot its portfolio toward value-added products like milk concentrates and whey proteins, meeting a global surge in demand for protein-enriched ingredients.
Economic Impact: Governor Kristi Noem’s support for the dairy industry due to the addition of more than 118,000 cows in the last 12 months contributes nearly $4 billion annually to the state’s economy.

Strengthening the Wisconsin Hub

Simultaneously, Agropur is committing $70 million to three Wisconsin plants: Weyauwega, Luxemburg and Little Chute. These funds are earmarked for increasing whey processing and valorization capacity. By turning what was once a byproduct into high-value nutritional ingredients, Agropur is maximizing the milk check for its members through operational efficiency.

Financial Resilience and Member Returns

These investments are backed by a stellar 2025 fiscal performance. Agropur reported:

Revenue: $8.9 billion (a 2% year-over-year increase).
EBITDA: $686.4 million (a 12.6% increase from 2024).
Patronage Returns: $70 million distributed back to member dairy producers.

“In 2025, Agropur delivered solid financial results, strengthening its ability to continue growing and investing in its future,” says Agropur president Roger Massicotte.

CEO Émile Cordeau emphasizes the strategy is built on resilience. By focusing on value-added products to meet the strong market demand for protein-enriched products, Agropur is positioning itself not just as a processor, but as a specialized ingredients partner in a competitive global market.

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The Beef-on-Dairy Revolution: How Black Calves and AI are Reshaping the Dairy P&L

Dairy Faces a “Very Weird Situation,” Forcing Farmers to Rethink Revenue

Thu, 12 Feb 2026 17:27:19 GMT

Dairy farmers are standing on shaky ground. Milk checks are tight and input costs are up, but replacement heifers and beef-on-dairy calves are providing an unusually strong backstop. As Gregg Doud, president and CEO of the National Milk Producers Federation, puts it, dairy is in a “very weird situation” right now.

Beef-on-Dairy Helps Pay the Bills

With today’s market conditions, many dairy farmers are finding that the most valuable part of their operation is not in the parlor, but in the maternity pen.

“The milk check is not much,” Doud told “AgriTalk” host Chip Flory during Farm Journal’s 2026 Top Producer Summit. “But those calves are worth so much.”

In some regions, that beef-on-dairy value is staggering.

“The latest number I heard in the Northeast recently, a black day-old calf [is worth] $1,600,” Doud adds. “You talk to [dairy farmers] and they say, ‘We’re in the beef business now.’”

At a time when the milk check alone is not enough to carry the operation, beef-on-dairy has become a financial lifeline that is helping many farms stay profitable.

“Beef-on-dairy doesn’t have 100% penetration into the industry, but it’s close,” Doud says. “I would say it’s over 75% at this point.”

This shift is reshaping how farmers think about cow value, reproductive decisions and even culling strategies. A cow is no longer evaluated only on her milk production or longevity, but on the value of the calf she is carrying.

“If a cow is pregnant, she’s staying,” Doud adds. “The calves are worth too much to ignore.”

Fewer Replacements

That shift, however, comes with consequences for the future makeup of the herd.

With so many breedings going to beef, Doud says the number of replacement dairy heifers in the industry has dropped to levels that are noticeably short.

“The number of replacement dairy heifers is way below what it ought to be,” he says. “So, this is going to be interesting, and there could be a big swing in cow numbers at some point here.”

Doud notes the current reduction in replacement heifers is something the industry is watching closely.

Risk Management Remains Essential

As producers navigate all the shifting pieces in today’s market, Doud draws a firm line on risk management. In a margin environment like this, Dairy Margin Coverage (DMC) and Dairy Revenue Protection (DRP) are not optional tools in his mind. They are essential.

“The Dairy Margin Coverage program for dairy is something that I think everybody in agriculture needs to look at,” he says. “It kicks in when you need it.”

Although DMC has limits on how much milk can be covered at the highest level, Doud notes it still works well for most dairies. He follows that point with strong encouragement for producers to also consider DRP, explaining it offers another way to safeguard milk income by allowing farms to insure a portion of their future revenue against market swings.

“Every dairy farmer in America, my goodness, if you are not signed up for DMC and also DRP on the insurance side of the equation, get signed up for these things,” he adds.

In his view, these tools were designed specifically for moments like this, when margins are thin and markets are unpredictable.

Cautious Optimism in an Uncertain Market

Looking ahead, Doud acknowledges milk checks are likely to remain tight, but the value of beef-on-dairy calves is helping farms navigate a difficult margin environment.

With additional dairy processing capacity coming online and continued demand for protein, he is hopeful milk prices will improve. In the meantime, he views risk management tools and beef-on-dairy breeding decisions as practical safeguards for producers working through challenging market conditions.

GLP‑1: A New Demand Driver for the Dairy Case

Wed, 04 Feb 2026 20:00:04 GMT

For years, dairy has been a go-to protein source for active, health-conscious consumers, but the rise of GLP-1 medications is shining a new light on the nutrient. Protein isn’t just for workouts anymore; more consumers are looking to it to manage hunger and support weight-loss goals, and that group is growing fast, according to Phil Plourd, president of Ever.Ag Insights.

Why is GLP-1 Medication Use Increasing in 2026?

GLP-1 medications were originally developed to help manage Type 2 diabetes, with weight loss as a side effect. However, they are now also prescribed specifically for weight management, though adoption was limited because they had to be injected.

“Apparently 60% of consumers have some degree of needle phobia. That was preventing many from using one of these GLP-1 medications,” Plourd noted during the “2026 Dairy Market Outlook: Trends, Risks, and What Comes Next” webinar. “That’s about to change.”

At the end of 2025, FDA approved Wegovy, a GLP-1 medication in pill form, making it easier for more people to use. Not only is it simpler to take, but it’s also more affordable, opening the door to a wider range of users.

“We’ve already seen some published reports saying that sales in the first couple of weeks are way ahead of where Zepbound was at this phase of its launch,” Plourd says. “These medications are getting cheaper, and it’s going to have, is having and will have a profound impact on the food industry, some for good and some for bad.”

How Do GLP-1 Drugs Change Grocery Spending and Calorie Intake?

According to Plourd, GLP-1 users consume roughly 20% to 30% fewer calories per day. This reduction in calories also reflects how consumers spend their money on food.

Cornell University data shows that within the first six months of being on a GLP-1 medication, grocery spending declines by about 5% and restaurant spending by roughly 8%. While those declines moderate in months seven through 12, they remain near 4% in both categories.

For dairy, this reduction in intake shifts the focus from volume to how dairy products fit into fewer eating occasions.

“Protein supplementation becomes a big deal when you’re eating fewer calories,” Plourd explains. “Those calories need to count more.”

When it comes to purchasing less, GLP‑1 users are not cutting evenly across the cart. Instead, they are tightening up most aggressively on indulgent, discretionary items. That means snacks, sweets and sugary beverages.

“When you look at the grocery store, they are spending 11% less on chips and savory snacks, 7% less on cheese and 6% to 7% less on soft drinks,” Plourd says. “Ice cream is also declining.”

This creates a split outcome for dairy. Products like cheese and ice cream can fall into the discretionary category, while protein-rich options such as cottage cheese, yogurt, milk and protein beverages align with what GLP-1 users are actively seeking as they prioritize nutrition per calorie.

Protein is the Big Winner

Despite overall food volume declining, certain dairy categories are growing.

Concentrated protein sources such as shakes, powders, cottage cheese and high-protein snacks are benefiting as consumers look for nutrient-dense foods. Plourd points to cottage cheese as an example.

“We brought cottage cheese back from the near death,” he says. “We’re back to levels not seen since 1985. Production is up 9% through November on a rolling 12-month basis.”

This has caused the market to shift in terms of production, with Associated Milk Producers Inc. recently announcing that it will convert one of its Wisconsin cheese plants into a premier cottage cheese facility, betting on the superfood renaissance to lead the industry’s high-protein future.

Ready-to-mix and ready-to-drink protein beverages are also expanding rapidly, with some segments seeing year-over-year growth above 15%.

“I think that this story has positive and negative implications for the dairy space ,” Plourd adds. “The negatives would be, I think calorie-dense items like pizza, fast food and snacks maybe get roughed up a little bit, but protein is clearly a big winner.”

A Split Consumer, a Split Opportunity

GLP-1 adoption also shows a divide among U.S. consumers. Higher-income households are adopting more frequently, often pairing medications with gym memberships and protein supplements. For them, dairy is a familiar, convenient protein source that fits doctor guidance.

Middle- and lower-income households, juggling health care, student loans and grocery bills, may adopt less — or even if they do, they may not trade up into premium protein formats.

The result: Protein-forward, better-for-you dairy products are gaining momentum, while indulgent, calorie-dense categories may flatten or decline.

To stay ahead, dairy may need to double down on protein and reposition staples like cheese for the calorie-conscious set. With research showing that consumer spending often returns to pre-GLP-1 levels once medication stops, the industry has a unique window to capture long-term loyalty.

Corey Geiger, lead dairy economist with CoBank, thinks the industry is perfectly primed for this shift.

“The dairy industry is in a great position to help consumers meet their protein intake goals,” Geiger notes in a recent CoBank report . “Dairy products have a unique advantage because they contain all nine essential amino acids required in a human diet, making it a complete protein source. We expect more food and beverage manufacturers will take a cue from formulators that have already incorporated dairy-based ingredients into protein-centric product areas outside of the retail dairy case.”

That focus on nutrient density is shaping what comes next for the market.

A Look Ahead

GLP-1 medications have already reshaped the American plate, moving the focus from quantity to quality. In this more food-conscious world, indulgence is being cut while protein is prioritized.

For dairy, the challenge will be moving fast enough to capture the upside in protein while managing pressure on categories less favored by calorie-conscious consumers. But experts think that in this era of fewer calories and greater protein awareness, dairy is well positioned to step forward.

Will Beef-on-Dairy Help Rebuild America’s Record-Low Cattle Numbers?

Tue, 03 Feb 2026 21:09:00 GMT

America’s cow herd has shrunk to levels not seen in 75 years, falling to 86.2 million head. Weather challenges, high input costs and record cattle prices have made heifer retention a difficult decision for many beef producers, keeping numbers tight. In response, more feedlots have turned their attention toward the dairy sector, where beef-on-dairy calves are helping to fill the gap.

Can Beef-on-Dairy Help Fill Feedlot Pens?

As beef cow numbers continue to slide, beef‑on‑dairy calves have stepped up, offering feedlots a steady source of quality cattle. That growing demand is giving dairy farmers a chance to cash in on a market with lucrative returns.

A 2024 industry survey found about 72% of dairy producers are actively using beef-on-dairy breeding programs, and production numbers mirror this trend. CattleFax estimates beef-on-dairy calf production jumped from just 50,000 head in 2014 to 3.22 million in 2024, with projections likely to reach 5 to 6 million head by 2026.

These trends are reflected in the latest USDA numbers, which show just how tight beef supplies are and how the dairy herd is playing a growing role in meeting demand:

The number of milk cows in the U.S. increased 2% to 9.57 million.

Total Cattle and Calves Inventory: 86.2 million head (down 0.35%)
Beef Cow Herd: 27.6 million head (down 1%)
2025 Calf Crop: 32.9 million head (smallest since 1941)
Beef Replacement Heifers: 4.71 million head (up 1%)

(USDA Data)

Brad Kooima of Kooima Kooima Varilek believes the tightest supply of this entire cattle cycle could occur in the next 60 to 90 days. During a recent episode of “AgriTalk”, Kooima highlighted how beef-on-dairy has become a major component helping to keep the beef supply chain strong.

“The gorilla in the room, to me, is beef-on-dairy,” he says. “From a couple of standpoints, the dairy cow herd’s the biggest since 1993. It’s grown and grown, and why wouldn’t you if you can get $1,200 to $1,500 for a day-old calf?”

What used to be a steady stream of native beef calves is now increasingly made up of dairy-beef crosses . Feedlot managers say these cattle have helped provide something the beef industry has long struggled with — a reliable, steady supply.

Dr. Eric Belke, veterinarian and feedlot partner at Blackshirt Feeders in Nebraska, says that need for consistency is exactly why Blackshirt Feeders was designed around beef-on-dairy cattle.

“Historically, in the feedlot world, there has been a lot of seasonality. With the beef-on-dairy population, we have a very consistent flow of cattle throughout the year,” he explained during the 2025 MILK Business Conference. “We needed a very large and consistent supply chain.”

Belke’s experience highlights how some feedlots are restructuring their operations to lean heavily on beef-on-dairy cattle, designing facilities and supply chains around the predictability these animals provide.

“Our feedlot was really built for feeding beef-on-dairy animals,” Belke says. “Right now, we’re at a capacity of 100,000 head, and we’re under construction. Next year, we’ll be at 150,000 head. By the end of 2027, we’ll be at 200,000 head. Currently, we have about 87,000 head on feed, and over 90% of those are beef-on-dairy animals.”

What Impact is it Having on Packers?

That predictable pipeline isn’t just benefiting feedlots. Packers are seeing the results, too.

Each year, several hundred thousand beef-on-dairy animals are processed alongside native beef cattle. And the quality within these animals is strong, with many grading very high Choice and even Prime. That quality has helped secure their place in the market.

Nick Hardcastle, Cargill senior director of meat grading and technical specialist, explains beef-on-dairy calves are an upgrade to the traditional Holstein steer.

“Beef-on-dairy is more desirable because it helped overcome several Holstein difficulties,” he says. “Improvements include red meat yield — more meat to a consumer — as well as improved acceptance in branded programs.”

That progress comes from being more intentional with breeding and management. Since replacement females aren’t the goal for the dairy farmers producing these calves, they and their genetic partners can focus on the traits that matter most to the beef supply chain, like calving ease, feed efficiency, days to finish, carcass weight, marbling and overall yield.

Data is what makes that possible. By linking individual AI sires to feedyard performance and carcass outcomes through electronic identification and data sharing, some supply chains are reviewing sire performance every six months and making rapid adjustments. The result has been a measurable improvement in grade, efficiency and days to finish — driven by genetics and management working together.

The Other Side of a Hot Market

While the beef-on-dairy boom has been a big win for dairy farmers, not everyone is celebrating its rise in popularity. Kooima worries about the long-term effects of vertical integration and the growing control some companies now have over the supply chain.

“For the first time, you’ve got an integrator that can control an animal from its birthday and schedule it out 341 days later to slaughter,” he explains. “It’s a dream the packers chase. I watched what happened in hogs and poultry. This scares me to death. The combination of all of that is we’re losing price discovery. They’re going to try to slow it down as much as they can until they control the supply.”

That tension, between a system solving today’s supply problem and one that could reshape how cattle are marketed, is shaping much of the beef‑on‑dairy conversation.

With the U.S. native beef herd unlikely to rebound soon, beef-on-dairy is becoming an important part of keeping the supply chain steady. While the long-term market effects are still unfolding, the trend highlights how the dairy sector is helping meet the country’s ongoing demand for beef.

Has Pizza Reached its Peak?

Tue, 27 Jan 2026 21:33:21 GMT

Pizza has long been a steady driver of cheese demand in the U.S., but recent data suggests growth in the category has slowed. After expanding for much of the past two decades, the number of pizza restaurants has flattened, and per capita cheese consumption has followed a similar pattern.

“The number of pizza restaurants in the United States, after surging at various points over the past 20 years, has really flattened out over the past four,” says Phil Plourd, head of market intelligence for Ever.Ag, during the 2026 Dairy Market Outlook: Trends, Risks, and What Comes Next webinar. “I don’t think it’s a coincidence that our rolling measure of per capita cheese use has flattened out over the same period.”

For years, growth in pizza restaurants coincided with rising cheese consumption. That relationship now appears to be stabilizing.

“So, all this pizza restaurant growth we saw was concurrent with per capita cheese consumption increases,” Plourd says. “Now have we kind of hit ‘mature’ with pizza?”

Signs of a More Mature Pizza Market

That question is being raised across the restaurant industry as well. According to The Wall Street Journal, analysts are debating whether the U.S. has reached peak pizza. Once the second-most common restaurant type in the country, pizzerias are now outnumbered by coffee shops and Mexican food restaurants. Pizza sales growth has also lagged in the broader fast-food category for several years, and expectations for near-term growth remain limited.

At the same time, pizza remains a significant part of the U.S. foodservice market. Reports indicate pizza chains generated about $31 billion in restaurant sales in 2024, according to market‑research firm Technomic. On any given day, roughly one in 10 Americans eats a slice of pizza, based on USDA estimates, with younger consumers accounting for a large share of that demand.

However, pizza’s relative position within the restaurant industry has declined. Among different cuisines, pizza ranked sixth in U.S. sales among restaurant chains in 2024, down from second place in the 1990s, according to Technomic. Data from Datassential shows the number of pizza restaurants in the U.S. reached a record high in 2019 and has declined since then.

Competition, Cost and Saturation

Several factors could be contributing to the slowdown. One is increased competition in food delivery.

“In a world where we can pick up our phone and order just about any food into our house from just about anywhere with four button pushes, that used to be pizza’s domain,” Plourd says. “Pizza owned that space for a long time. Well, in a world of DoorDash and other services, there’s competition.”

Price has also become a consideration.

“I think pizza has kind of gotten expensive in the post-COVID era,” Plourd adds.

Another factor is saturation. Pizza is widely available across the country, including in rural areas that once had limited access.

“The other thing is that there’s nowhere in America today where you can’t get a hot pie,” Plourd says.

He points to Casey’s as an example. The convenience store chain now has close to 3,000 locations, roughly double its footprint in 2010, and sells about 40 million pizzas per year. About 66% of Casey’s stores are located in towns with populations of 20,000 or fewer.

“For places where you’d previously have to go 50 or 100 miles to get a pizza, now the Casey’s is right there downtown,” Plourd says. “We give Casey’s credit for bringing pizza to rural America. But now it’s quite possible that there’s nowhere else to take it.”

That saturation helps explain why per capita cheese consumption has leveled off alongside pizza restaurant growth. Pizza remains a major driver of mozzarella demand, but without continued expansion in locations or sales, growth tied to pizza has slowed.

Looking ahead, Plourd sees more opportunity outside the U.S.

“The good news here is that the Koreans and the Japanese, there’s space for growth pizza-wise outside the country,” he says.

While pizza continues to play an important role in U.S. foodservice and dairy demand, current trends suggest the category has reached a more mature phase, with future growth likely to be incremental rather than expansive.

IDFA President Outlines Top 5 Priorities For The $800B Dairy Industry's Future

Tue, 27 Jan 2026 16:18:05 GMT

Under the desert sun of Palm Springs, a near record-breaking crowd of more than 1,200 dairy leaders gathered for the 2026 International Dairy Foods Association (IDFA) Dairy Forum. The atmosphere was electric, marking the start of what IDFA president and CEO Michael Dykes described as a “new era” for the industry. Addressing a room filled with producers, processors and suppliers, Dykes didn’t just offer a greeting; he issued a manifesto for an industry that has become an $800 billion economic powerhouse.

Powerhouse in Motion

Dykes began by grounding the audience in the sheer scale of their collective impact.

“You are stewards of a powerhouse industry,” he notes, highlighting the three million jobs sustained by dairy. “You’re putting nearly $800 billion of economic development into local communities. The places we live, the places we work to make them stronger, more vibrant. You’re providing 3 million jobs — not just a statistic, but a paycheck for families. Meaningful. Very, very meaningful. You’re sustaining the legacy for 24,000-plus dairy farms for the next generation. And our 1,200-plus processing facilities are producing healthy, wholesome, nutritious meals for people all around the world.”

Looking back at 2025, Dykes characterizes it as one of the greatest years in history for American dairy. Consumption reached a phenomenal 651 lb. per person, driven by a relentless focus on health and wellness. At retail, dairy topped all categories at $80 billion, while the processing sector signaled its confidence in the future by investing $11 billion in over 50 new state-of-the-art facilities across 20 states. Even amidst geopolitical volatility, exports surged to $9 billion, proving the world’s appetite for U.S. dairy is only growing.

“We have momentum on our back,” Dykes says. “We’re in a new era for dairy. Dairy was made for this opportunity.”

(International Dairy Foods Association)

The Strategy for the Future: United to Win

The theme for 2026, “United to Win,” is more than a tagline; it is a strategic necessity. Dykes outlines five core strategies to secure the industry’s future for the next generation.

1. Reclaim the Health Halo Dairy is the “original functional food,” and Dykes emphasizes the industry must lead with its nutritional profile. He celebrates significant legislative wins, most notably the “Whole Milk for Healthy Kids” act, which brought 2% and whole milk back to school cafeterias. By proactively reducing sugars and removing artificial colors, the industry has aligned itself with the “Make America Healthy Again” movement, increasing consumer perception of dairy as a healthy lifestyle staple by five percentage points in a single year.

2. Secure New Markets With U.S. farmers producing milk that is increasingly “component-laden” — boasting record-breaking butterfat and protein levels — the focus has shifted to global diversification. While Mexico remains a primary partner, Dykes urges the industry to look toward Southeast Asia and Indonesia.

“If there is a market signal for milk, the American farmer will come through,” he states, projecting an additional 27 billion pounds of milk production by 2034.

(International Dairy Foods Association)

3. Maximize Efficiency with Technology Dykes challenges the industry to rethink what a modern dairy looks like. From smart collars that monitor cow health with AI precision to robotic milkers that increase production, technology is the linchpin of efficiency. He shares a staggering comparison: to produce the same 226 billion pounds of milk the U.S. generates with 9 million cows, a less efficient system like India’s would require 61 million cows. This efficiency is the core of dairy’s sustainability story, as the industry works toward being greenhouse gas neutral by 2050.

4. Invest in People and Community The industry’s most important asset remains its people. Dykes addresses the paramount challenge of the workforce and the urgent need for immigration reform. He showcases the IDFA’s NextGen and Women in Dairy programs as the engine for future leadership. Furthermore, the industry’s social impact has reached new heights. Since 2022, the IDFA Foundation and its members have served over 1 million meals to food-insecure families.

5. Protect the Freedom to Operate Finally, Dykes stresses the importance of a unified voice in policy. Whether fighting “ultra-processed” labels or protecting dairy’s place in SNAP and WIC programs, the industry’s ability to command attention in Washington and state capitals is vital.

“All politics is local,” Dykes reminds, urging leaders to build relationships with representatives before the “house is on fire.”

A Call to Leadership

Dykes’ message to not only the dairy audience in attendance, but to the entire industry, is clear: the dairy industry is resilient, determined and entering its best years yet. He calls on farmers, processors and suppliers to rise as the leaders the next generation requires.

“Leadership rises at times like this,” Dykes concludes. “I firmly believe our best days are ahead of us because I know the commitment, the passion and the integrity that resides inside this industry. Join me in a commitment to being united to win for dairy.”

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The Mental Pressure of Being an Off-The-Farm Spouse

Mon, 26 Jan 2026 20:31:34 GMT

Being an off-the-farm spouse can sometimes feel like you’re living life in the in-between. You’re not fully involved on the operation, but you’re not removed from it, either.

Most of the time, you’re hearing about the good days and the bad ones secondhand, whether it’s a conversation at the dinner table or a late-night recap of the day as you crawl into bed. Through blurry details, you piece together what happened, how the day went and how your spouse is really feeling. You celebrate the wins, worry through the challenges and carry the stress right along with them, even though you weren’t there to see it firsthand.

That in-between space can be hard to explain to anyone outside the farm, but it’s a feeling many off-the-farm spouses can relate to.

Balance the Comfort and the Pressure of Stability

It’s no secret that an off-the-farm job can come with real advantages.

A steady paycheck
Health insurance
A retirement plan

Knowing when that next check will hit the bank account and having reliable health coverage feels like a safety net when life on the farm is anything but predictable. And for a lot of farm and ranch families, this reliability helps make everything else work. But with stability can also come added pressure. A pressure to provide, to stay employed and to keep everything moving forward.

More often than not, the off-the-farm paycheck carries the heavier load of the responsibility, especially when margins are tight. Per USDA data, in 2023, 96% of farm households earned money from off-farm sources, making up 77% of household income. And USDA states most households, regardless of farm size, work off the farm because it pays better than farm work, and access to health care benefits is often part of that decision.

For off-the-farm spouses working to help keep the farm afloat, this heavy load can take a mental toll.

They’re juggling budgets, weighing the “what-ifs,” and sometimes lying awake at night running the numbers in their heads — thinking through what could go wrong and how to keep the farm and family going. It’s a constant, behind-the-scenes effort to make sure everything keeps running smoothly.

Open the Lines of Communication

When that stress starts to build, one of the most helpful tools families have is simply talking about it. According to the University of Wisconsin’s Farm Management Program, farm couples and families who manage stress well tend to communicate openly, working together to plan ahead and tackle problems as a team. Having honest conversations and sharing information can help bring back a sense of control when finances feel uncertain.

That can be easier said than done. When financial pressure builds, many people try to carry it quietly — thinking they are protecting their family by keeping worries to themselves. But holding it all in can actually create more tension at home. Opening up does not mean sharing every detail or worst case scenario. It can be as simple as letting trusted family members or friends know what you are carrying and being honest about changes that may need to happen at home.

Share the Load

While there’s no perfect way to handle the stress that comes with being an off‑the‑farm spouse, you learn how to carry it in a way that works for your family. Sometimes it means adjusting plans, sometimes it means talking things out and sometimes it just means taking a deep breath and reminding yourself you’re doing the best you can.

Finding small ways to share the load can really help, whether that means talking things out, relying on people you trust or giving yourself a moment to breathe when you need it.

The New Dairy Math: Why Beef and Components are Redefining the Milk Check

Fri, 23 Jan 2026 21:57:23 GMT

For decades, the financial health of a dairy farm lived and died by the milk check. But as 2026 unfolds, a radical shift in revenue streams is changing how the nation’s most modern dairies stay in the black. According to Curtis Bosma of HighGround Dairy, the industry is currently navigating a “perfect storm” of heavy supply, surging protein demand and a beef market that has turned a former by-product into a primary pillar of profit.

The “Beef Rebate”

Historically, beef accounted for roughly 5% of a dairy’s total revenue, a minor by-product of keeping a herd in milk. Today, that number has skyrocketed to 20% or even 25%. With day-old beef-cross calves fetching as much as $1,200, the “beef stream” is now the primary margin-maker for many operations.

“There are cows in the herd today that might not economically deserve a spot based on their milk production alone,” Bosma tells “AgriTalk” Host Chip Flory. “But farmers are keeping them because they are pregnant with a black calf. It’s essentially a rebate that keeps the cow in the stall until that calf arrives.”

A Surge in Components, Not Just Volume

While the headline milk production numbers are up, showing a massive 4.5% year-over-year growth as of November, the real story is in the composition of that milk.

More Than $11 Billion in Investment: New, state-of-the-art processing plants are coming online, and they aren’t just looking for water; they want solids. Gregg Doud, president and CEO with National Milk Producers Federation says: “There’s nothing like it in the history of U.S. agriculture, of any commodity, anywhere in the world.”
The Component Gain: Farmers are breeding and feeding for higher fat and protein levels. When you factor in these component gains, the actual “food value” reaching the market is outpacing the growth in raw liquid volume. Butterfat levels have set new records for four consecutive years, with an average of 4.23% nationwide in 2024, and protein content reaching 3.29% based on Federal Milk Marketing Order data. The downfall of high milk fat is that it has come at the cost of milk protein. According to CoBank, butterfat percentages in U.S. milk have been increasing at twice the pace of protein, which has been challenging to cheesemakers.

The Geography of Growth: South Dakota’s Rise

Bosma highlights South Dakota as a primary engine of this expansion. Lured by a business-friendly environment, lower environmental hurdles and cheaper feed, families from less friendly states (such as California) are relocating to the Plains.

The “GLP-1" and Whole Milk Effect

On the demand side, dairy is finding new life in unexpected places:

The GLP-1 Trend: As more Americans use weight-loss drugs like Ozempic, their focus has shifted to “intake efficiency.” They are seeking high-quality proteins to maintain muscle mass, and dairy, specifically whey and high-protein derivatives, is the “cleanest” protein available.
Whole Milk in Schools: The return of whole milk to school lunch programs is being hailed as a brand win. While it might not move the needle on total volume immediately, it plants the seed for lifelong dairy consumers by offering a product that actually tastes good.

Navigating $15 Milk
With Class III futures hovering around the $15 mark, the pressure is on. Bosma points out that the efficient operators are surviving by tapping into non-milk revenue: beef, carbon credits from methane digesters and solar energy.

“If you can tap into those additional sources, you might not feel a cash flow crunch until milk hits $12,” Bosma says. “But for those relying solely on the milk check, $15 is a very tough place to be.”

Listen to the entire conversation online .

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Can Schools Save the Day?

Thu, 22 Jan 2026 16:00:00 GMT

For the past 13 years schools have been limited to only offering low fat options for milk served to students. The focus was shifted under the Healthy Hunger-Free Kids Act which was Michelle Obama’s push for better nutrition in schools under the premise that low fat milk limited the calories served to students in order to fight childhood obesity. Last week, President Trump sported his milk mustache in a social media post declaring “Drink Whole Milk” as he signed the new bill named Whole Milk for Healthy Kids Act which passed through Congress last fall.

This change comes directly after the revamping of the food pyramid, with the 2025-2030 Dietary Guidelines which focuses on whole foods and healthy fats, a change from the previous pyramid that limited fat consumption in a normal healthy diet. Nutrition experts have argued that the fat consumption in milk has no adverse effect on children’s health as the total calories in the student’s diet is such a low percentage that the nutritional benefits outweigh the increase in calories.

This morning, U.S. Secretary of Agriculture Brooke Rollins released a statement piece about her experience as a child, growing up in a household with fresh whole milk always in the fridge and how shifting the views and opinions of the American consumer is long overdue. She believes that diet plays a key factor in chronic disease and the overwhelming percentages in childhood obesity and poor physical fitness. She attributes the absence of whole milk in schools to part of the problem as it has been an overlooked part of the correlation in children’s declining health.

What does this mean for dairy consumption and prices going forward? The question is whether or not we will see a demand shift in the near future, and experts believe it could be coming as soon as this fall. Shifting orders and adjustments to production take time, however, the harder measure to predict is how long it will take for demand to shift and how to adjust orders with what children will choose in the lunch line.

Secretary Rollins believes it will a win for the American farmer and rural America. Not only returning demand in the school lunch program but highlighting the need for healthy fats, the vitamin D and minerals available in milk, shifting the public view in the benefits of milk in the consumer’s eyes as a nutritious whole food option in a healthy diet.

How this will affect milk prices is still to be determined. We can go back to 2012 and look at the demand for milk in schools and adjust for the now 30 million students enrolled in the National School Lunch Program, but the math isn’t quite that simple. According to the National Milk Producers Federation, students consumed 288 million fewer half-pints of milk from 2012-2015 and 213 million fewer in 2014-2016. That number began to grow in 2017 as schools started to offer flavored low-fat options. In 2023, the Healthy School Milk Commitment limited sugars in a majority of milk options to no more than 10 grams of added sugars per 8 ounce serving.

Overall, throughout these policy changes to the school milk programs, Americans as a whole have rapidly pulled back on consumption of milk. According to Farm Bureau, milk consumption has fallen 28% since 2010. However, consumption has been falling since 1975, down 50% in the last 50 years. Therefore, demand is difficult to assess as a shift in government policy, and the consumer narrative has certainly had an impact in demand, but it is unlikely that per capita we will get back to 2010 demand anytime soon.

Futures prices have reflected a lot of the same opinion. While the decline in prices has somewhat stabilized since last week’s announcement, the market does not expect a substantial shift in demand anytime soon. Consumer opinion is not changed overnight and while school demand may shift more rapidly, it is more likely that it will be a shift over the next few years rather than more immediate.

Sarah Jungman is a commodity broker with AgMarket.Net and AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Sarah’s office is located in Winterset, Iowa and she may be reached at 515-272-5799 or through the website www.agmarket.net .

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USDA Awards $11 Million to Boost Dairy Innovation Across the U.S.

Wed, 21 Jan 2026 21:42:30 GMT

USDA announced it is investing more than $11 million to support small and midsized dairy businesses through the Dairy Business Innovation (DBI) grant program. According to the agency, the funding is designed to help dairy producers develop, market and distribute innovative dairy products, strengthening both local economies and the national dairy industry.

“This funding through the Dairy Business Innovation Initiatives makes important investments in the domestic dairy industry, furthering USDA’s efforts to ensure Americans have access to affordable, wholesome U.S. dairy products,” says USDA Under Secretary for Marketing and Regulatory Programs, Dudley Hoskins.

Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA), praises the USDA’s funding announcement.

“IDFA expresses its deep appreciation to Secretary Rollins and Under Secretary Hoskins at USDA for awarding more than $11 million in grant funding to support dairy businesses and producers through the Dairy Business Innovation Initiatives program,” Dykes says. “This funding will promote continued innovation in the dairy processing sector and will help industry members work together to address common challenges and create new market opportunities for healthy and nutritious dairy products.”

This year, the funds are being awarded noncompetitively to the four existing DBI initiatives.

California State University, Fresno
University of Tennessee
Vermont Agency of Agriculture , Food & Markets
University of Wisconsin

The organizations will provide technical assistance and subawards to dairy farmers and businesses in their regions, helping them with business planning, marketing and branding. They also aim to expand access to innovative production and processing techniques, supporting the development of value-added dairy products that strengthen local markets and offer consumers a broader selection of high-quality dairy options.

The Wisconsin Cheese Makers Association (WCMA) also welcome the funding, highlighting its impact on the Dairy Business Innovation Alliance (DBIA), led by WCMA in partnership with the University of Wisconsin’s Center for Dairy Research (CDR).

“This funding recognizes the success of our work to help processors and farmers adapt, innovate and grow in challenging times,” says John Umhoefer, WCMA executive director. “Through DBIA, we’ve delivered more than $24 million in grants to dairy businesses across the Midwest, and this new award allows us to continue supporting small and mid-sized processors as they strengthen markets for milk and build long-term resilience.”

Under the new award, DBIA is eligible to receive $3.45 million to support product research and development, technical assistance, education and direct grants to dairy businesses across Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin. Since 2018, the program has directed nearly 300 grants and provided hundreds of businesses with education and consultative services

New Funding Brings Milk Dispensers to More Virginia School Cafeterias

Wed, 21 Jan 2026 16:37:54 GMT

A new partnership is expanding access to milk in Virginia schools while helping districts reduce waste and improve how cafeterias serve students.

The Dairy Alliance has teamed up with the Virginia State Dairymen’s Association (VSDA) and Farm Credit of the Virginias to advance the Milk Dispenser Grant Program for K–12 schools across the Commonwealth. Combined funding totaling $155,000 will support a new round of grant awards scheduled for early 2026, giving more schools the opportunity to access milk dispenser equipment designed to replace single-use milk cartons.

Milk dispensers allow students to pour the amount of milk they want, giving them more control over portions and helping reduce packaging waste in school cafeterias. The program also fits with sustainability initiatives underway in several districts.

“The Milk Dispenser Grant Program gives schools the tools and support they need to make real dairy milk more accessible for students,” says Farrah Newberry, CEO of The Dairy Alliance. “When schools remove barriers and modernize how they serve real dairy milk, students drink more of it and build healthier habits that last beyond the cafeteria.”

According to The Dairy Alliance, the youth wellness team works with school nutrition directors throughout the process, from planning and installation to ongoing support. Grant funding helps offset equipment costs and includes training to help schools integrate dispensers into daily service.

“Strong partnerships help schools deliver real dairy milk in a way that connects with students and supports local dairy farmers,” said Eric Paulson, executive director of VSDA. “This combined investment allows more Virginia schools to participate in a proven program as they plan for the 2026 school year.”

Early results from schools using milk dispensers have been notable. At one Virginia school, milk packaging waste dropped nearly 90%, while milk consumption increased by more than 50%. Across the Southeast, schools in similar programs report average milk movement increases of at least 14%.

The investment includes a $115,000 grant from the Van der Lely Foundation, a $30,000 contribution from VSDA to support K–12 school districts statewide and a $10,000 sponsorship from Farm Credit of the Virginias dedicated to schools in southwest Virginia. All funds will be used to support the MD Grant Program, which helps schools purchase milk dispenser equipment and kits designed to replace single-use milk cartons.

The expanded funding will allow the program to reach additional Virginia cities and counties beginning in early 2026, with ongoing data collection tracking milk usage, waste reduction and student participation.

The Dairy Dilemma: Will High Beef Prices Offer a Lifeline or an Exit Ramp?

Thu, 15 Jan 2026 14:10:19 GMT

The dairy industry finds itself at a critical crossroads. With cheese hovering around $1.35 per pound and Class III milk barely topping $14 per hundredweight, the familiar “low prices cure low prices” cycle is in full swing, typically signaling a wave of supply liquidation.

“Typically, that means some liquidation on the supply side,” says Phil Plourd, president of Ever.Ag Insights. “But the beef situation makes things really interesting. Will high beef prices make producers stay (keep the quasi cow-calf thing going) or will they make them go (use high cattle prices to pave the exit ramp)? There’s no way to know for sure.”

The Rise of Beef-on-Dairy
For dairy operations like McCarty Family Farms Named 2025 Leader in Technology Award Winner , beef-on-dairy isn’t just a trend; it’s a five-year strategic cornerstone. The McCarty family is optimistic, projecting that strong beef herd trends, heifer retention rates and rancher retirements will maintain robust prices through 2026 and well into 2027.

“Of course, there is nothing certain in the ag economy, and black swan events seem to be occurring more often,” Ken McCarty says. “We are optimistic that [beef] values will remain strong for the foreseeable future.”

For them, beef-on-dairy has become a substantial, reliable non-milk income stream, bolstering profitability and, crucially, enhancing the long-term productivity of their farms through intensified genetic selection. They see “no tremendous downside risk in the beef-on-dairy market anytime soon.”

This growing confidence in beef-on-dairy isn’t anecdotal; it’s rooted in significant advancements. Patrick Linnel, director of market research for CattleFax, highlights in a recent Purina Report how smarter breeding decisions and genetic progress are transforming the landscape.

“Genetic suppliers have zeroed in on beef sires that are well suited for dairy cows,” Linnel explains, “and producers are making more targeted selections. The result? Stronger, more consistent cattle in which feedlots and packers are increasingly confident.”

While a small discount compared to native beef cattle might persist in some weight classes, its impact is far less dramatic, often offset by the reliability and superior feedlot performance of these crossbred animals.

Challenges and Opportunities
Despite this emerging lifeline, the dairy sector continues to face existential pressures. Corey Gillins, chief milk marketing officer for Dairy Farmers of America (DFA), reveals that their member survey from over a year ago anticipated a shrinking number of member farms. Then they projected the number of member-owner farms by 2030 to be 5,100. Gillins says they now believe the number will be lower than that. Although he says DFA’s data reveals a striking paradox: While the number of member farms is steadily declining, overall milk production remains robust, even increasing. This is also seen by other processors across the U.S.

“We’re losing dairy farms, but we’re not losing cows or milk,” he says, noting this consolidation often sees cows from exiting farms absorbed by other DFA members in the region, which is enabled by increasing processing capacity in growth areas such as Idaho, southwest Kansas, Michigan and New York. Gillins says they are even seeing milk production growth in areas such as southern Georgia and northern Florida.

Gillins agrees the beef-on-dairy revolution is a major factor mitigating the pain of low milk prices. DFA estimates 70% of dairy farmers are now engaged in beef-on-dairy, adding a significant $2.50 to $3.00 per cwt to their bottom line. Gillins also notes rising component values are adding another $1 to $3 per cwt to milk checks that are showing up even in Holstein herds that are now achieving high protein and butterfat levels.

From a different viewpoint, Gillins says for farms without succession plans, strong calf and cull prices offer a timely opportunity to exit the industry without incurring losses from prolonged milk prices.

“Some producers might think this is a good time for them to exit, rather than have some break even or negative cash flow months and wait for this price to come back around,” he says. “They don’t want to go backwards financially and will take advantage of the strong beef market to exit now.”

Yet, for others dairy producers, these additional revenue sources, combined with robust risk management tools like Dairy Revenue Protection and Livestock Revenue Protection (which can lock in beef calf and cull cow prices at significant levels), provide financial resilience to weather the current storm. As Gillins points out, producers who leveraged these tools in late 2025 were able to lock in favorable prices for 2026, setting themselves up for a profitable year despite the current milk price situation.

Embracing Change for Future Success
As dairy producers continue to navigate this complex financial landscape, the beef-on-dairy revolution stands as a testament to agricultural adaptability. While low milk prices continue to drive consolidation and farm exits, the strategic integration of beef genetics offers a tangible lifeline for many, transforming what was once a byproduct into a vital profit center. Gillins concludes that the industry’s future profitability is now a complex equation, far beyond the simple Class III milk price.

The long-term implications are still unfolding, but one thing is clear: The future of dairy profitability won’t solely be defined by the milk check. Instead, it will be shaped by producers’ willingness to innovate, diversify and strategically leverage every asset on their farm, ensuring resilience in an ever-changing market.

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