The Global Milk Equation

According to Danny Munch, an economist with the American Farm Bureau Federation, U.S. milk production has climbed to record levels, but the underlying momentum is fragile. The increase is being sustained largely by older cows remaining in production longer, rather than by expansion of dairy herds, raising questions about how durable current output levels will be.

Global dynamics are adding pressure. Munch notes that the international milk supply has expanded alongside U.S. production, intensifying competition and weighing on domestic prices. "So just like the United States, we've seen increases in milk production in some of our competitors, like the European Union, New Zealand, and Argentina, and that has weighed heavily on milk prices at home as well. The U.S. all-milk price fell more than $4 a hundredweight throughout 2025. The flip side is that lower prices have made U.S. dairy pretty competitive overseas."

That competitiveness has delivered mixed outcomes. Lower prices squeezed margins for producers but also helped drive record U.S. cheese and butter exports in 2025.