Texas Nearly Closes Milk Production Gap with Idaho in 2023

The Texas dairy industry trails Idaho by just 1.4% in milk production as of the end of 20239. From 2003 to 2023, Texas has seen the largest increase in milk production in the U.S, by 11.5 billion pounds, a growth rate of about 195%.

This rapid increase in milk production has propelled Texas from the ninth to the fourth largest milk-producing state in the U.S.2 This surge is evident in the state’s recent climb from fifth to fourth place in 2020 when it surpassed New York (Figure 1). This highlights the remarkable growth that the Texas dairy industry is experiencing.

Texas could potentially overtake Idaho and claim the third place ranking in the next few years if the growing production trends continue. As shown in Figure 2, on a month-to-month basis, Texas produced more milk than Idaho during the beginning of 2023. However, the challenges of heat stress during the summer months adversely affected Texas milk production more than Idaho.

The majority of Texas milk production and dairy cattle are concentrated in the Panhandle, with Hartley County alone contributing approximately 19% of the state’s total milk production. The Texas Panhandle region accounts for 75% of the state’s milk production (Figure 3), while Eastern New Mexico contributes roughly 80% of that state’s milk production6. This concentration of milk production has created the third largest dairy area in the U.S. and alone accounts for approximately 8.8% of all milk produced in the U.S., 23 billion of the 226 billion pounds produced in the country.

What is contributing to the increase in Texas milk production?

The biggest factor driving the increased milk production in Texas has been the significant growth of the dairy cow inventory. Between 2003-2023, the number of dairy cows in Texas almost doubled from roughly 319,000 to 635,0001.

While dairy cow numbers have played a role in the increased milk production, other contributing factors include improvements in genetic selection, nutrition, facilities, reproduction, technology and management practices.

Additionally, Texas has seen a rise in the number of processing plants expanding or under construction. This has allowed producers to manage their cows for maximum milk production. New processing plants recently opened or that are planned to open in the next two years include:

1. HEB began building a milk processing plant in San Antonio in January, set to be completed by July 2025.
2. Great Lakes Cheese began construction of a new packaging plant in Abilene in spring 2023. The company says onboarding new employee-owners for the facility is now underway, and the plant should be completed by early November, with commercialization beginning in mid November.
3. Leprino Foods Co. recently broke ground on its new 850,000-square-foot facility in Lubbock. Phase 1 construction will be completed in late 2024, and the plant is expected to be operational in early 2025. Phase 2 is expected to be completed by early 2026. Upon completion of Phase 2, the plant will be able to take 200 milk trucks per day and process 1 million pounds of cheese per day.
4. Cacique Foods – Dairy processing plant opened May 2023 in Amarillo 7.
5. Walmart – Milk processing facility recently announced plans to open in 2026 in Robinson.

Looking forward

While the number of Texas dairy farms has fallen below 300 dairies1, this reduction in numbers is also being seen- nationwide. Despite some challenges faced by Texas dairy producers, there has been a shift towards producing higher-priced fluid milk, which offers better returns for dairy farmers. This adjustment towards fluid milk production is seen as a positive step, potentially leading to slight price increases for all milk sold.

Technological adoption is another key trend, with dairy producers increasingly turning to technology to manage production costs and improve efficiency. Innovations like health monitors, rumination collars and robotics are becoming integral to modern dairy operations, helping to address labor shortages and enhance animal welfare and productivity.

References

1 2023 State Agriculture Overview. USDA/NASS 2023 State Agriculture Overview for Texas. https://www.nass.usda.gov/Quick_Stats/Ag_Overview/stateOverview.php?state=TEXAS

2 Boyd, M. (2024, March 8). Walmart investing $380m in Waco-area milk processing plant. Connect CRE. https://www.connectcre.com/stories/walmart-investing-380m-in-waco-area-milk-processing-plant/

3 Gutschke, L. (2022, September 7). Great Lakes Cheese Plans Hiring events for new Abilene facility. Abilene Reporter News. https://www.reporternews.com/story/money/business/local/2022/09/07/when-great-lakes-cheese-abilene-hiring-for-new-facility-opening-plant-warehouse/65742971007/

4 Leach, T. (2023, November 20). H-E-B makes big plans to expand largest milk processing plant in southwest. Dairy Herd Management. https://www.dairyherd.com/news/business/h-e-b-makes-big-plans-expand-largest-milk-processing-plant-southwest

5 Leprino Foods. (2021, October 1). Leprino Foods announces Lubbock, Texas as site for new, state-of-the-art dairy manufacturing facility.). https://leprinofoods.com/2021/10/01/leprino-foods-announces-lubbock-texas-as-site-for-new-state-of-the-art-dairy-manufacturing-facility/

6 Natzke, D. (2022, March 10). State of the dairy 2022: Southwest: The neighborhood is changing. Progressive Dairy. https://www.agproud.com/articles/54491-state-of-the-dairy-2022-southwest-the-neighborhood-is-changing

7 Powell, D. (2023, May 11). Cacique Foods opens $88 million dairy processing plant in Amarillo. ABC News 7. https://abc7amarillo.com/news/local/cacique-foods-opens-88-million-dairy-processing-plant-in-amarillo-texas-dairy-milk-gilbert-de-cardenas-kevin-carter-amarillo-economic-development-corporation-aedc

8 U.S. Department of Agriculture, National Agricultural Statistics Service (NASS). Agricultural Statistics, Milk Production.