When Gregg Doud gets emotional talking about U.S. trade policy, it’s worth paying attention. As president and CEO of the National Milk Producers Federation and former chief agricultural trade negotiator under the first Trump administration, Doud has seen how policy decisions ripple through agricultural markets — and he’s not mincing words about the Administration’s recent move to remove tariffs on 300,000 metric tons of imported beef.
“Intervening in agricultural commodity markets never works,” Doud said during a recent Farm Journal interview. “It may serve a purpose in the short term, but long term, it’s never a good idea.”
For dairy producers who’ve invested in genetics, improved efficiency and diversified into beef-on-dairy operations, that intervention feels like the rug being pulled out from under them — just as the strategy was paying off.
The 20% That Changed Everything
The numbers tell a stark story: at least 20% of dairy farm income now comes from the sale of cull dairy cows and calves. That’s not a minor revenue stream — it’s a financial lifeline that has enabled the U.S. dairy herd to reach its highest level since 1992.
“That growth rate is directly related to the fact that if that dairy cow is pregnant, she’s staying because of the value of the beef-on-dairy black calf, which is today somewhere in the neighborhood of $1,500,” Doud explained. “That is a very different set of economics.”
He contrasted that with the pre-sexed semen era, when a Holstein steer calf was worth just $150.
“The beef industry can rent that dairy cow uterus,” Doud said. “That beef-on-dairy black calf adds an enormous amount of value, which is what’s driving — I would argue — the biggest driver of the increase in milk production.”
The adoption has been rapid and widespread. Doud estimates that approximately 70% of U.S. dairy farmers are now breeding cows to beef semen, fundamentally changing the economics of dairy farming.
“We’re probably about pretty close to where that’s going to be going forward because the rest of that you’re using [sexed] semen to make replacement heifers, and the supply of replacement heifers in dairy is pretty tight right now,” he noted.
What 300,000 Metric Tons Actually Means
So, what does the Administration’s decision to remove tariffs on 300,000 metric tons of imported beef actually mean for dairy producers?
Doud broke down the math: “If you look at just dairy cows, it’s kind of interesting. That is about four and a half months of dairy cow cull slaughter.”
While dairy cow cull slaughter isn’t a huge number compared to fed beef cattle, it’s significant — and most of it goes into the ground beef market where imported lean trim competes directly.
But here’s where the economics get interesting: the imported product is likely Brazilian 90% lean trim, which is already the cheapest lean product on the market.
“If you relieve the tariff, really who that goes to is the exporter, not necessarily to the consumer,” Doud explained. “So, what it really does more or less is it just kind of changes the psychology of the market in terms of supply hanging over the head of the marketplace more than anything else.”
In other words, the policy won’t meaningfully lower retail ground beef prices for consumers — but it will depress the market psychology that determines what dairy producers receive for their cull cows and beef-cross calves.
The Timing Couldn’t Be Worse
The seasonal timing of the tariff removal compounds the problem.
“When do we take a lot of beef cows to market? Well, it’s after we wean their calves, and if they’re not pregnant, if they’re older, and you’re not going to return them again in the herd, you’re not going to feed them all winter,” Doud said. “So, when you wean the calves, that’s when these cows come into market, which is right now, this time of year.”
The policy landed right on top of seasonal cull cow marketings, “kind of psyching the market out a little bit,” as Doud put it. “And it has. We’ve seen what’s happened to cull cow prices. We’ve seen what’s happened to the cattle market.”
But the deeper concern is what the policy signals about future expansion decisions.
“If you have that heifer that you’re weaning this fall, that’s the point where you make the decision: Am I putting her back in the herd and breeding her next May, or am I sending her to the feedlot?” Doud said. “What it really does is prolong the expansion of the cow herd by kind of putting a lid on the economics of this.”
The message to producers: “Well, if there’s going to be government intervention in the marketplace, what’s the point of me expanding and planning for the future? I’ll just put that heifer in the feedlot and take the money.”
Dairy’s Global Dominance Is Real
Despite the frustration over beef policy, Doud’s message about dairy’s competitive position was unequivocal — and it’s where he got visibly emotional.
“The U.S. dairy industry is much, much more competitive today than it’s ever been before, and I am absolutely certain that going forward we’re going to be a force to deal with in the world market of dairy,” he said.
The evidence backs him up. U.S. dairy exports are on track to exceed $10 billion this year, making dairy the third-largest agricultural export behind only corn and soybeans. Cheese exports are at record levels, up approximately 30% year-over-year in early 2026.
“My economists this summer came back from a conference in Europe, and what were they talking about?” Doud recalled. “They have been a huge dairy exporter for decades. What was their conversation? How do we compete with U.S. dairy? They’re kicking our butts.”
The growth isn’t just in traditional markets. Mexico remains the largest customer, followed by Canada, but Central America has emerged as a powerhouse.
“They are growing like crazy, and that is a direct result of our free trade agreement years ago,” Doud said. “Finally, in 2015, we got the tariff for U.S. dairy down to zero, and the growth in Central America for U.S. dairy is phenomenal.”
The driver? Economics and nutrition.
“Think of it as the cheapest protein in the world, and from a nutritional standpoint and a price standpoint, you just can’t beat it,” Doud said. “It’s an exciting time for us in dairy, and we are competitive as the dickens globally.”
The Milk Production Question
With the national dairy herd at 9.71 million head — up 199,000 from last year — and milk production up 2.7% year-over-year, the question becomes: Is this growth sustainable, and is it enough to justify the billions in new processing capacity?
Doud believes the current growth rate is largely tied to beef-on-dairy economics and has likely plateaued.
“A lot of that has been implemented,” he said, referring to the 70% adoption rate of beef breeding. “This is about where we’re going to be, plus or minus.”
As for whether production growth justifies processing expansion, Doud sees it as a global phenomenon driven by protein demand.
“Production is up around the world,” he noted, citing increases in Europe (though drought will likely reverse that), Argentina, Australia and New Zealand. “The increase in milk production globally is a phenomenon of just demand for dairy, demand for cheese, demand for whey. It’s the GLP-1 demand for protein globally.”
The pharmaceutical weight-loss drugs driving high-protein food consumption aren’t just a U.S. trend — they’re reshaping global dairy demand.
“Let the Marketplace Work”
For dairy producers who feel federal policy is undermining their strategic investments, Doud’s message is both a warning and a call to action.
“We in agriculture have to remind our policymakers in Washington to let the marketplace work,” he said. “Intervening in agricultural commodity markets never works. It may serve a purpose in the short term, but long term, it’s never a good idea.”
He invoked his training as a Kansas State agricultural economist: “Let the marketplace sort this out, and we’ll be better off in having those market signals sent to farmers to do what we need to do and compete in the world.”
The irony, Doud noted, is that when markets are allowed to work, U.S. agriculture dominates.
“If we let the market work, our ability to compete in the world overall on the protein side — beef, pork, poultry and dairy — is unmatched,” he said.
Doud acknowledged that agriculture has weathered policy disruptions before, citing Jimmy Carter’s Soviet grain embargo as an example. But the lesson remains: short-term political interventions create long-term market distortions.
“Do I think this is a situation where it’s to that extent? No,” he said of the beef tariff removal. “But we have to be careful to make sure that things like that don’t upset the apple cart.”
The Canada Question
Beyond beef, dairy producers are watching the escalating tariff dispute with Canada — the second-largest customer for U.S. dairy exports.
Doud, who has been in trade negotiation rooms and recently spoke with the Canadian ambassador, sees the current tensions as part of the process.
“It’s a negotiation, and always when you’re negotiating, you’ve seen this before. It’s about leverage and back and forth,” he said. “Have I expected this? Yes, I actually did. I’ve been in the room before. I’ve seen how all this operates, but I also think we will have a deal at some point here in the process.”
He emphasized that much of the dispute centers on automobiles and trucks, not agriculture.
“Will we work this out? Yeah, but there’ll be some scrapes and scuffs and banging back and forth here a little bit for a while. Hopefully, we can get through it pretty quickly.”
Doud expressed confidence in the U.S. negotiating team, particularly Ambassador Jamieson Greer and Ambassador Katherine Tai.
“There is great respect for Ambassador Greer on the part of the Canadians,” Doud said. “He is an exceptional trade lawyer. He knows exactly what he’s doing.”
When discussing the team, Doud became visibly emotional: “We’re honored to have him. He’s a heck of a guy.”
The Bottom Line
For dairy producers navigating consolidation, investing in beef-on-dairy integration and competing in global markets, Doud’s message is clear: the fundamentals are strong, but policy uncertainty threatens to undermine strategic investments.
Beef-on-dairy has been transformative, driving the largest dairy herd expansion in three decades and providing a critical income hedge when milk prices remain historically low. But federal intervention in beef markets risks disrupting that model just as it’s reaching maturity.
At the same time, U.S. dairy’s global competitive position has never been stronger. Record exports, growing demand for protein and strategic advantages in efficiency and innovation position American dairy to dominate world markets — if policy allows markets to function.
“The U.S. dairy industry is much, much more competitive today than it’s ever been before,” Doud concluded. “Going forward, we’re going to be a force to deal with in the world market of dairy.”
The question is whether federal policy will support that trajectory or inadvertently undermine it.
For now, dairy producers who’ve done everything right — invested in genetics, improved efficiency, diversified into beef — are watching Washington closely, hoping policymakers will take Doud’s advice: let the market work.
