The landscape of U.S. milk production is experiencing dynamic changes and developments, as highlighted in the May 2025 USDA Milk Production report. This report reveals cow numbers have increased by 5,000 head from last month and by 20,000 compared to the last report — marking the largest herd size since 2021. This growth is largely attributed to light culling rates.
Driving Factors for Herd Growth
Katie Burgess with Ever.Ag highlights two primary reasons for this upward trend in cow numbers:
- Replacement heifers have become very expensive, altering the breakeven point for replacing an animal.
- The high value of beef-on-dairy calves makes it financially worthwhile to retain cows for their calf-bearing potential.
Notable Regional Performances
According to the report, there was a 1.6% year-over-year increase in U.S. milk production for May, which Burgess says aligns with industry expectations.
California: Milk production in California fell short of expectations, experiencing a decrease of 1.8%. Despite an increase of 2,000 in cow numbers from the previous year, the lower-than-expected milk-per-cow production is attributed, presumably, to lingering impacts of HPAI (Highly Pathogenic Avian Influenza).
Kansas: Kansas showed a remarkable milk production output increase of 15.7% in May, with April’s data also revised higher at 15.5%.
Texas and South Dakota: Both states demonstrated significant positive gains in milk production, with increases of 8.9% and 9.5% respectively.
Industry Expansion in Processing Capacity
The dairy industry’s expansion is further underscored by significant developments in processing capacity:
- In March, Hilmar Cheese Company marked the official opening of its new cheese and whey processing facility located in Dodge City, Kan.
- Bel Brands announced an increase in its production capacity in Brookings, S.D., with a substantial 100,000-square-foot addition to its plant.
- New facilities like the Leprino Foods plant in Lubbock, Texas, and a Walmart plant in central Texas are coming online.
Michael Dykes, CEO of International Dairy Foods Association, highlights how producers and processors have a similar goal in mind.
“Our farmers want to grow and so do our processors. If we aren’t growing — if we aren’t looking toward the future — we’re going to get surpassed by others,” he says.
These developments are part of a projected $9 billion plus expansion in U.S. milk processing, highlighting a promising and dynamic future for the industry.
“The US dairy industry has reached the spring flush at a higher than expected level of 19.1 billion pounds. It’s now up to demand to pull milk prices higher through the summer,” Dan Basse, president of AgResources Company says.
The May 2025 USDA Milk Production report reflects significant growth and expansion in the U.S. dairy sector, driven by strategic management of herd sizes and processing capabilities. As the industry continues to evolve, these trends point toward a robust and sustainable future for U.S. milk production.
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