Milk Output Hits High Gear as Summer Heat Builds
Published: Friday, July 4, 2025
The following is from Lee Mielke, author of a dairy market column known as "Mielke Market Weekly."
U.S. dairy farmers are putting the pedal to the medal in milk production, as low feed costs and good milk and beef returns provide incentive for expansion. Milk output surpassed that of a year ago for the fifth month in a row in May.
The Agriculture Department's latest Milk Production report shows output hit 19.930 billion pounds, up 1.6% from May 2024. The top 24-state total, at 19.137 billion pounds, was up 1.7%. The April 50-state total was revised up 15 million pounds, up 1.6% from April 2024, instead of the 1.5% originally reported. The 24-state total was raised by 17 million pounds, up 1.7%, instead of 1.6%.
Component adjusted production was up 3%, according to StoneX, and has been 3% or higher in three of the last four months. They believe it will remain above 3% through June and possibly July.
May cow numbers totaled 9.445 million, up 5,000 head from April and 114,000, or 1.2%, more than a year ago. The April count was revised up 15,000 head. The 24-state count, at 9.004 million, was up 6,000 from April and 118,000, or 1.3%, above a year ago. The April count was revised up 15,000 head. The U.S. dairy herd has grown 121,000 head in the last 11 months.
May output per cow in the 50 states averaged 2,110 pounds, up 7 pounds, or .3%, from a year ago, and averaged 2,125 pounds, up 7 pounds, or .3%, in the 24-state data. April's output was revised down 2 pounds in both.
California, still recovering from bird flu, saw its milk output down 64 million pounds, or 1.8%, from a year ago, and down for the eighth month in a row. Cow numbers were up 2,000 head but output per cow was down 40 pounds.
Wisconsin output was down 3 million pounds, or .1%, due to a 7,000 cow drop. Output per cow was up 10 pounds.
Cow numbers are behind the growing milk output, says Corey Geiger, lead dairy economist at CoBank. Speaking in the June 30 Dairy Radio Now broadcast, Geiger said cow numbers have increased 114,000 head the past 12 months and in the past five months, farmers have added 90,000. He adds that butterfat and protein content has doubled the growth of milk production.
The big question is where are the heifers coming from considering the beef-on-dairy movement in genetic breeding programs, which has resulted in dairy heifers being at their lowest level in 20 years. Geiger says USDA reports average prices at $2,900, but he has seen 2-year-old cows bring $4,000 at auction. Furthermore, farmers are culling less, as numbers were down 98,000 head.
Speaking of beef, Texas became the seventh state to ban lab-grown meat and joins Indiana, Nebraska, Montana, Mississippi, Alabama and Florida. Jack Hubbard, executive director of the Center for the Environment and Welfare, said "The lab-grown meat sector will continue to face headwinds as consumers and lawmakers learn more about the lack of long-term health studies and use of 'immortalized cells.' We are seeing a bipartisan consumer movement against the experimental product that is gaining more and more momentum."
The summer heat is beginning to affect milk production nationally, according to Dairy Market News. Some areas were not seeing a noticeable drop, while others were. Milk components were also dropping as temperatures rise. Class I milk bottling is seasonally low with facilities diverting milk to manufacturing. Class II production is strong. Ice cream and frozen dairy mix manufacturing is helping offset the decrease in bottling. Cream loads are getting purchased for ice cream.
Meanwhile, May butter and cheese inventories remained below those a year ago, thanks in large part to strong exports. The USDA's latest Cold Storage report showed May 31 butter stocks at 361.6 million pounds, up 24.7 million pounds, or 7.3%, from April, but still 18.2 million, or 4.8%, below those in May 2024. April stocks were revised down 530 pounds from last month's report.
StoneX said, "Stocks/use is the tightest in 10 years and would suggest a price close to $2.75 versus where second quarter averaged around $2.50."
American-type cheese stocks climbed to 807.4 million pounds, up 5.6 million, or .7%, from the April level, but down 8.7 million pounds, or 1.1%, from a year ago. The April total was revised 4 million pounds lower.
The "other" cheese category hit 582.3 million pounds, up 3.7 million, or .6%, from the April level, but down 14.3 million pounds, or 2.4%, from a year ago. The April data was revised down 443 pounds.
May's total cheese inventory amounted to 1.41 billion pounds, up 9 million pounds, or .6%, from April, but down 21.9 million, or 1.5%, from a year ago. The April total was revised down 4.6 million pounds. Cheese stocks have trailed year ago levels for 15 consecutive months.
StoneX said, "The data supports higher spot prices, but the physical market feels well supplied right now." "If stocks stay close to year ago levels, the model would argue for $1.80-$1.90 prices in July-November," according to StoneX.
China's May imports of high-protein products shot higher with milk protein concentrate 70% protein plus, and whey protein concentrate 80% plus, marking solid gains, according to China's latest Customs Statistics. HighGround Dairy points out that MPC-70 import growth was driven by an additional 1.6 million pounds arriving from New Zealand versus a year ago.
"Australian and European suppliers also expanded their market share. WPC80 imports showed more variation: volumes from the U.S. were steady, but the leading supplier lost share to Germany and New Zealand, which both grew and managed to offset declines from other European exporters," said HGD.
Skim milk powder imports, at 42.9 million pounds, were up 26.1%, while whole milk powder, at 67.6 million pounds, was down 13%. New Zealand supplied 67% of the total, according to HGD, up from a third in 2023 while Australia lost ground.
Cheese imports continued an upward trend, hitting 40.4 million pounds, up 22.7% from a year ago, third-largest monthly volume ever, behind March and January 2021, according to HGD. New Zealand contributed 66% of that total. Australian, Italian and French volumes also rose however the U.S. saw the steepest decline, dropping from 5.5% to .9%, with only 353,000 pounds cleared through customs, according to HGD.
Whey imports, at 112.9 million pounds, were off .9%, continuing their decline from the March peak, although HighGround says May's figure aligns with those last year. "U.S. volumes were down 8.6% year over year but still accounted for half the market. Increases from Poland and Argentina helped offset the decline in U.S. product. The EU bloc as a whole gained market share," HGD concludes, "but this largely compensated for reduced volumes from Belarus and Russia."
CME Cheddar block cheese fell to $1.5950 per pound last Tuesday, lowest since March 18, but closed last Friday at $1.62, down 4.50 cents on the week after losing 17.25 cents the previous week, and 29 cents below a year ago. The barrels fell to $1.6150 last Tuesday, lowest since March 21, but finished at $1.6650, up .75 cents on the week, 21.50 cents below a year ago, and an inverted 4.50 cents stop the blocks. Seventy loads of block were traded on the week at the CME and 13 of barrel.
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