President Trump gave his State of the Union speech on Feb. 24 and listed the one-year accomplishments of his administration. He scolded the Supreme Court for its decision on his tariffs, which has added trading uncertainty to the world, and he scolded Democrats for opposing his policies, even as war drums beat in Iran.
Increasing cow numbers and more milk per cow kept U.S. bulk tanks filled in the first month of the new year. January milk production hit 19.810 billion pounds, up 3.2% from Jan. 2025. The 24-state total, at 19.058 billion, was up 3.4%. Fat and protein content were both up from last year which pushed component adjusted production in the 50 states up 4.2% from last year, according to StoneX.
Production for all of 2025 was officially announced at a record 232 billion pounds in the 50 states, up 2.6% from 2024, and up 9% from 2016. You’ll recall that output was down in both 2023 and 2024. Cow numbers in 2025 totaled 9.5 million head, up 153,000 from 2024, and up 1.8% from 2016. Output per cow averaged 24,390 pounds, up 218 pounds from 2024. That average annual rate has increased 7.2% from 2016, according to USDA.
The latest World Agricultural Supply and Demand Estimate report projects 2026 output to hit 234.5 billion pounds which would be up 2.8 billion or 1.2% from 2025.
December production was revised down 39 million pounds to 19.529 billion, 4.2% above a year ago, instead of the 4.4% originally reported. The 24-state total was revised down 36 million pounds, to 18.787 billion, up 4.4% instead of 4.7%.
January cows numbered 9.580 million, up 14,000 from the December count, which was revised down 1,000 head, but up 189,000 or 2% from January 2025. The 24-state count was 9.154 million, up 15,000 from the December total, which was revised up 1,000 head, but is 200,000 head or 2.2% above a year ago.
January output per cow averaged 2,068 pounds in the 50 states, up 24 pounds or 1.2% from a year ago. The 24-state average, at 2,082 pounds, was up 24 pounds or 1.2% from 2025. The December average was revised down 3 pounds in the 50 states and 4 pounds in the 24 states.
California output hit 3.5 billion pounds in January, up 158 million or 4.7% from a year ago, after a 9.6% gain in December. Cow numbers were up 2,000 head and output per cow was up 90 pounds from a year ago.
Wisconsin put just under 2.8 billion pounds in the tank in January, up 56 million or 2.1%, on 20,000 more cows and a 10-pound gain per cow.
No. 3 Idaho was up 3.2%, thanks to 22,000 more cows. Output per cow was unchanged.
Indiana was up 3.6% on 6,000 more cows and a 10-pound gain per cow. Kansas continues to show the biggest percentage gain, up 26.1%, on 45,000 more cows and a 20-pound gain per cow.
Michigan was up 3.6% on 15,000 more cows and a 5-pound gain per cow. Minnesota was up 3.4%, on 15,000 more cows with output per cow unchanged.
New Mexico, one of four states showing a decline in milk output, was down 3.8%, on 8,000 fewer cows and a 5-pound drop per cow. New York was up 3.4% on 23,000 more cows, though output per cow was off 5 pounds.
Ohio was up 2.3% on 5,000 more cows and a 5-pound gain per cow. Oregon was up 4.9% on 6,000 more cows, however output per cow was unchanged.
Pennsylvania was down 3% on 11,000 fewer cows and 10 pounds less per cow. South Dakota was up 10.9%, on 24,000 more cows. Cow output was unchanged.
Texas produced just under 1.6 billion pounds of milk, up 113 million or 7.6% from a year ago, thanks to 37,000 more cows and a 45-pound gain per cow.
Vermont was up 0.5%, on 1,000 more cows, but output per cow was down 5 pounds. Washington State posted the biggest decline again, down 6.1%, on 17,000 fewer cows, although output per cow was up 15 pounds.
StoneX says, “It’s pretty clear that the most profitable part of the dairy farm right now are the calves. Farmers will hold onto all the cows that they can get bred which should keep cow numbers steady to a little higher but the record pace of expansion that we saw in 2025 is slowing down. The collapse in milk prices in the fourth quarter sent a clear signal to the farmers to cut milk production and they’ve made adjustments in rations to save some cash which have probably cut the fat content in the milk and slowed the growth in milk production per cow. Milk production growth will likely continue to slow as we move through the year and face tougher and tougher year-over-year comparisons.”
Dairy cow culling continues to run ahead of a year ago. U.S. Department of Agriculture’s latest slaughter data showed 60,100 cows sent to slaughter the week ending Feb. 14, down 400 from the previous week, but 6,600 head or 12.3% more than a year ago. Year to date 401,700 cows had been culled, up 25,700 head or 6.8% from a year ago.
U.S. butter stocks jumped in January but are still well below those a year ago. The USDA’s latest Cold Storage report showed January stocks had grown to 215.4 million pounds, up 27.8 million or 14.8% from December. But they were a whopping 45.6 million or 17.5% below January 2025. The December total was revised 11.6 million pounds lower from last month’s report.
American-type cheese stocks slipped to 792.3 million pounds, down 1.5 million or 0.2% from the December level, which was revised up 4 million pounds. And was down 360,000 pounds, virtually unchanged, from a year ago.
The “other” cheese holdings crept to 564.8 million pounds, up 3.4 million pounds or 0.6% from December and up 2.4 million pounds or 0.4% above a year ago.
That put the total cheese inventory at 1.380 billion pounds, up 2.4 million or 0.2% from December, and up 2.2 million or 0.2% from a year ago. December’s total was revised up 5.6 million pounds from last month’s data. The report is seen as bullish on butter and slightly bullish for cheese. U.S. exports and good domestic demand is helping keep product out of the freezer.
The United States is truly blessed with a bountiful dairy industry that benefits consumers. The National Milk Producers Federation points out, “In the decades-old saga of Real Milk versus Plant-based Imposters, Team Real had another good year in 2025. While retail sales of fluid milk stayed steady, sales of imitators made from almonds, oats and other items fell 6% to 358.4 million gallons last year, according to Circana data. Since its peak in 2021, plant-based sales have declined by nearly one-fifth; last year’s drop of 6% was the steepest of all four.”
“As a result, for the fourth straight year, good-old-fashioned fluid milk’s market share rose compared to plant-based beverages, holding 90.7% of the combined dairy-and-alternative-beverage market in 2025. That’s the fourth straight annual increase in milk’s market share, and it’s up from 89.4% in 2021,” said the National Milk Producers Federation.
“Slowly, but surely, consumers are choosing the better value in nutrition, in price, and in trustworthiness,” argues the National Milk Producers Federation. “In a rational world, real milk and plant-based beverages wouldn’t even be in the same category as their nutritional profiles are radically different, and their ingredients bear no similarity. Decades of plant-based marketing as dairy alternatives have made their mark; but despite that, dairy remains dominant. That’s a tribute to milk’s irreplaceable nutritional package and to consumers who dig past the hype and make the choices that best fit their nutritional needs.”
“Not that plant-based beverages are ever going away, far from it,” warns the National Milk Producers Federation. “Even though beverages made from almonds, which is 63% of the plant-based market, fell by 8.6% last year, and soy fell 8.3%, oat-based beverages rose 1.8%, as it’s become a solid-though-distant second place to almonds.”
“People have their reasons to choose ultra-processed beverages of inferior nutritional value. But the decline of plant-based beverages fits within several trends of the 2020s, from the embrace of real food to renewed appreciation of dairy’s nutritional benefits, especially at fuller-fat levels, to consumers who are more critical of what they consume,” according to the National Milk Producers Federation.
“Confusion remains in the marketplace over the inferior nutrition of plant-based versus true dairy beverages; that’s shown by surveys and studies. Enforcing federal standards of identity that define milk as an animal product and reserving dairy terms on labels only for true dairy beverages would further these positive marketplace trends. Nutrition science has spoken, and consumer behavior is changing too. Slowly but surely, milk’s integrity is carrying the day, and real dairy is winning. Often, it just takes time,” the National Milk Producers Federation concluded.
Most cash dairy prices finished out the month above where they were on Feb. 2. Block cheddar, after jumping 11 cents the previous week, saw daily gains and climbed to $1.6025 per pound Wednesday, highest Chicago Mercantile Exchange price since Nov. 11, 2025, but then dropped 7.25 cents Thursday, and lost 0.75 cents Friday. It closed at $1.5225, still 2.50 cents higher on the week, 13.75 cents above the Feb. 2 print, but 25.25 cents below a year ago. The barrels finished Friday at $1.56, 7 cents higher on the week, highest since Nov. 3, 2025, and 22 cents below a year ago. There were 18 sales of block on the week and no barrel.
“Central region milk production is strengthening and is up from Feb. 2025,” says Dairy Market News. “Spot prices for Class III milk ranged $1-under to $2-over Class at mid-week. Some cheesemakers were purchasing spot milk from nearby plants with scheduled downtime but spot activity was light as plants were primarily using milk from within their network and were running busy schedules. Barrel demand remained strong. Retail cheese sales are steady to stronger, and food service demand was unchanged. Export interest is strong,” says Dairy Market News.
Milk production is generally strengthening in the West and making its way to Class III manufacturers. Demand for spot milk was stronger and cheese production is busy. Manufacturers note higher fat component milk is giving production boosts to certain varieties. Cheese makers, distributors and convertors note tighter spot load availability. Domestic demand is steady, while demand from international buyers was steady to strong, according to Dairy Market News.
After jumping 16.50 cents the previous week and hitting $1.87 per pound, highest Chicago Mercantile Exchange price since Sept. 11, 2025, butter dropped 5.75 cents Monday, but then the Cold Storage report put on the brakes and recovered some. It closed Friday at $1.84 per pound, down 3 cents on the week, 26 cents above the Feb. 2 level, but still 50.50 cents below a year ago. There were 68 Chicago Mercantile Exchange sales on the week.
Central region milk component levels are up from a year ago and cream production is strong. Some butter makers were using cream from within their network to increase production and offering fewer spot loads. Class II cream demand is strengthening as processors ramp up output ahead of spring holidays.
Butter production is strong in the Central region as contacts work to keep up with demand. Retail interest is increasing somewhat, but food service demand is steady. Interest remains from international purchasers and 82% butterfat butter inventories remain tight. “Spot loads of 80% are available, but loads with more recent production dates are more difficult to obtain,” says Dairy Market News.
Milk production is generally strengthening and providing ample amounts of cream for the West. Some Class II manufacturers are beginning to seasonally increase production. Demand from butter makers was moderate to stronger. Most churns are operating seven days a week. Manufacturers note spot load availability of 80% butterfat butter as stable or tighter. Domestic demand is stronger. International demand is somewhat lighter or remaining strong. In either case, export demand continues to keep a significant number of 82% loads unavailable for domestic spot sales, according to Dairy Market News.
A pivotal date for spot loads of butter traded at the Chicago Mercantile Exchange was March 1, warned StoneX broker Dave Kurzawski. “Loads made in March of 2025 or later can be sold. Starting on March 1, only loads produced Dec. 1, 2025 and later can be sold. … Year old loads can still change hands in the country, they just can’t be brought to the exchange spot call.”
Grade A nonfat dry milk lost 4 cents Monday but rallied from there and closed Friday at $1.71 per pound, up 2.5 cents on the week, highest since July 12, 2022, 25 cents above the Feb. 2 price, and is 51 cents above a year ago. There were eight sales on the week at the Chicago Mercantile Exchange.
Chicago Mercantile Exchange whey closed the week 4.75 cents lower, at 63.25 cents per pound, lowest since Oct. 15, 2025, 10.75 cents below the Feb. 2 price, but still 12.25 cents above a year ago. There were three sales on the week.
Last week’s Global Dairy Trade Pulse was the second to offer Fonterra butter and anhydrous milkfat. A total of 6.9 million pounds of product was sold, up from 6.8 million on Feb. 10.
Singapore Exchange futures are pointing toward another strong Global Dairy Trade on March 3, according to StoneX analyst Dustin Winston. “The first four events of 2026 have been very strong. The market sentiment globally seems to have shifted, regardless of how much milk is being produced. New Zealand weather, and thus pasture growth, has been somewhat counter seasonal and more supportive than normal. The pasture growth index is currently well above last season and the 5-year average. This would suggest that milk production should continue to remain strong for the season,” says Winston.
This article originally appeared on Farmers Advance: ‘Milk production growth will likely continue to slow as we move through the year’
Reporting by Lee Mielke, Farmers’ Advance / Farmers Advance
USA TODAY Network via Reuters Connect
