The latter part of this post will cover the huge and fast changes that are occurring in the dairy industry. Its really all about cheese production and exports. The European countries have a very strong lead in cheese exports. In 2025 the major European countries exported over $33 billion dollars of cheese. The U.S. exported $3 billion dollars of cheese. New Zealand, a major dairy exporter, exported about $2 billion dollars of cheese. How is the U.S. finding a home for its growing exports of cheese. The U.S. is changing to a very low-cost dairy organization. It can produce cheese at low prices. U.S. exports of cheese are exploding, and domestic cheese consumption is now increasing.
Tariff wars are a concern.
The data shown in the charts below represent the percent annual changes. The changes are presented this way to emphasize the significant changes occurring in the U.S. dairy industry. Cheese changes will be emphasized, as nearly two thirds of the total milk produced in the U.S. goes to cheese.
Chart I below shows the annual percent change in milk production. The U.S. is increasing milk production at a robust 3.4% growth annually. The rate of growth shows no major change of slowing down.
The change is cow population (Chart II) follows the path of Chart I except that the growth is slower. With milk now growing at 3.4% annually, the growth rate of milk cows increasing is at 2.06%. The difference in Charts I and II highlights the improved milk per cow. With each cow producing more milk, fewer cows are needed.
Starting in 2026, the domestic consumption of cheese has increased and is currently growing at 1.3% annually (Chart III). After many years of a slowing growth, there is now some domestic increases in cheese consumption.
Fluid milk sales (Chart IV) are again decreasing. The decline is leveling off at a loss of 1% annually. Organic milk sales have been declining significantly in the past year.
Ultrafiltered and lactose free milk is continuing to grow but it is still a small part of overall milk consumption (Chart V). “Other milk” has seen growth in every monthly period for 54 months. Sales growth did slow down in early 2026 with limited supplies but are now increasing sales by 9% annually.
Cheese exports (Chart V) are increasing at a very fast rate. Currently the growth in cheese exports is 27% annually. This is an amazing growth, but can it be continued and selling at good prices?
How is this effecting producer revenue? Chart VII and Chart VIII below review the changes in component prices of butterfat and protein in terms of percent of annual change. The price of butterfat is dropping by 37% annually. The milk protein pricing is dropping by a 4.3% annually.
This really expresses the volatility of pricing.
This post was developed to better show the rapid changes occurring in the dairy industry. The growth of milk and cows is not slowing down. The growth of cheese consumption is growing at 1% annually. The growth of fluid milk is still declining but at a slower rate of 1% annually. Exports of cheese are growing at a very high rate of 27% annually. Protein and butterfat prices are continuing to go down. Protein prices are falling annually at 4.3%, and butterfat prices are dropping by 37% annually.
Dairy is changing rapidly.
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