U.S. Dairy Boom: Production Soars, Exports Skyrocket, and Markets Shift (2026)

U.S. dairy production surges as markets, exports shift

The U.S. dairy industry is experiencing a surge in production, with several factors contributing to this growth. Here's a breakdown of the key points:

• December U.S. milk production: Jumped more than 4% year over year, reaching 19.568 billion pounds.
• Butter stocks: Fell sharply as exports surged to multi-year highs.
• Cheese inventories: Grew while domestic retail demand stayed strong.
• Protein-focused consumer trends: Continue to favor dairy products.

Production Insights:

• Total production for the quarter: 57.8 billion pounds, up 4.2% from a year ago.
• Cow numbers: Increased by 23,000 head from July to September, and 202,000 more than the fourth quarter of the previous year.
• November output: Revised up 6 million pounds to 18.796 billion, 4.5% above a year ago.
• 2025 output: Totaled 231.482 billion pounds, up 2.5% from 2024, and 222.476 billion for the 24 states, up 2.6%.

State-wise Analysis:

• California: Cows produced just under 3.5 billion pounds of milk in December, up 9.6% from a year ago.
• Wisconsin: December output: 2.8 billion pounds, up 2.8% from a year ago.
• Idaho: Up 5.6%, thanks to 40,000 more cows offsetting a 5-pound drop per cow.
• Indiana: Up 3.1% on 5,000 more cows and a 10-pound gain per cow.
• Kansas: Marked the biggest percentage gain, up 26.2%, on 45,000 more cows and a 20-pound gain per cow.
• Michigan: Up 4.5% on 20,000 more cows.
• Minnesota: Up 3.9%, on 5,000 more cows with a 10-pound gain per cow.
• New Mexico: Down 4.9%, on 10,000 fewer cows and a 15-pound drop per cow.
• New York: Up 3.9% on 20,000 more cows and a 15-pound gain per cow.
• Ohio: Up 2.5% on 5,000 more cows and a 10-pound gain per cow.
• Oregon: Up 8.9% on 9,000 more cows, and a 15-pound gain in output per cow.
• Pennsylvania: Down 2.4% due to 10,000 fewer cows and a 5-pound drop per cow.
• South Dakota: Up 11.4%, on 25,000 more cows. Output per cow was down 5 pounds.
• Texas: Up 4.7% from a year ago, thanks to 30,000 more cows and a 5-pound gain per cow.
• Vermont: Up 0.5%, on a 20-pound drop per cow, though cow numbers were up 2,000 head.
• Washington: Down 6%, on 19,000 fewer cows, although output per cow was up 30 pounds.

Slaughter Data:

• Weekly dairy cattle culling: 59,800 head in the week ending Jan. 17, 500 head less than the previous week, but 1,800 or 3.1% more than a year ago.

Inventory and Exports:

• Butter stocks: Decreased to 199.3 million pounds, down 11.1 million pounds or 5.3% from November.
• Cheese inventory: Totaled 1.372 billion pounds, up 10.2 million or 0.7% from November.
• U.S. dairy exports: Hit 515.2 million pounds in November, up 13.8% from November 2024.

Market Trends:

• Cheese prices: Cheddar blocks gained 9 cents Monday, then reversed and closed Friday at $1.3625.
• Butter prices: CME butter was up 2.5 cents Monday, then headed back down.
• Nonfat/skim milk powder: Supplies remain tight, with skim solids being routed toward alternative uses.

Consumer Demand and Innovation:

• CoBank: Reports a surge in consumer demand for foods and beverages with high protein levels.
• Dairy-based ingredients: Being used to boost protein content in various products.
• Innovative Dairy Farmer of the Year: Apple Shamrock Dairy Farms of Townville, Pennsylvania, recognized for its high-tech and holistic approach.