Editor’s Note: This is one article in a series that is included in the 2025 Farm Journal’s State of the Dairy Industry report. The full 16-page report will appear in the May/June issues of Dairy Herd Management and Milk Business Quarterly and will be published in this space over the next several weeks. To download the full report for free click here.
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When examining milk production in the U.S. over recent years, there’s more at play than what meets the eye. The number of milk cows has remained relatively constant, but there are significant changes occurring that shape the future of the dairy industry.
Key Changes in Milk Components
One of the most notable changes is the shift in milk component levels, which is crucial for both producers and processors. Over 80% of the U.S. milk supply is directed into manufactured dairy products that depend on butterfat and protein content. The demand for these components is climbing, with more than $8 billion worth of new dairy processing capacity expected to come online by 2027.
Butterfat levels have set new records for four consecutive years, with 2024 seeing an average of 4.23% nationwide, according to USDA’s National Agricultural Statistics Service. Protein content is also on the rise, with new records set each year from 2016 to 2024. The average protein content of U.S. milk reached 3.29% in 2024, based on Federal Milk Marketing Order data.
Evolution of the Cow Herd
The structure of the cow herd is also shifting. Data from the February U.S. Milk Production Report indicates there are 8.96 million milk cows on farms across 24 major U.S. states, marking a significant increase. This growth of 75,000 head from the year prior represents the largest milking herd since May 2023.
Phil Plourd, president of Ever.Ag Insights, notes the significance of this increased cow power, suggesting it could possibly contribute to robust milk production growth in the coming months.
Michael Dykes, CEO of the International Dairy Foods Association, stresses the industry’s eagerness for growth among both dairy producers and processors.
“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,” Dykes explains.
Expansion of U.S. Dairy Exports
U.S. dairy exports have shown a 2% increase, reaching $8.297 billion in 2024. This is second only to the $9.655 billion that was garnered in 2022. Krysta Harden, who serves as the CEO of the U.S. Dairy Export Council, points to the ongoing uncertainties surrounding U.S. government tariffs as a potential challenge. But at the same time, she emphasizes the strong global standing of U.S. dairy products.
“We have such a reputation for producing really high-quality, consistent products that customers are able to count on,” Harden explains.
As the industry continues to evolve, it carries a reputation for quality. This makes U.S. dairy products well-positioned to expand their influence in global markets, even amid changing economic conditions.
