U.S. dairy processors have committed $13 billion to new and expanded manufacturing capacity across 19 states, the largest investment wave the industry has seen in decades. This is according to Michael Dykes, president and CEO of the International Dairy Foods Association, who spoke with Dairy Herd this week.
Key Facts
- U.S. dairy processors have committed $13 billion to new plants, the largest wave in decades.
- USDA projects milk production rising 15 billion pounds, from 225.9 billion in 2024 to 243.7 billion by 2030.
- Farm numbers keep falling, but the dairy herd is projected to reach 9.52 million cows by 2030.
The investment lands at an odd moment for the industry. The number of U.S. dairy farms keeps falling, even as processors race to build capacity for 15 billion more pounds of milk by 2030.
USDA's long-term agricultural projections show U.S. milk production climbing from 225.9 billion pounds in 2024 to 243.7 billion pounds in 2030, enough added volume to fill more than 1.7 billion-gallon jugs.
Where the $13 Billion in Dairy Investment Is Going
The money is concentrated in a handful of states:
- New York: $2.8 billion
- Texas: $1.5 billion
- Wisconsin: $1.1 billion
- Idaho: $720 million
- Iowa: $701 million
By product category, cheese draws the largest share of new investment at $3.2 billion. Milk and cream follow at $2.9 billion, yogurt and cultured dairy at $2.8 billion, butter and powders at $1.6 billion, and ice cream at $530 million.
Per-capita U.S. dairy consumption hit a record 661 pounds in 2023, driven by cheese and butter demand. Cheese consumption alone has doubled over the past 50 years.
Sales of cottage cheese climbed about 20% in the year ending June 2025, per Circana data cited by Dykes. It's part of a broader shift toward high-protein foods, including yogurt, shakes and whey protein powder.
How USDA Expects Milk Production to Reach 243.7 Billion Pounds
Growth breaks into two pieces: higher output per cow and a modest increase in the number of cows. USDA projects milk production per cow rising from 24,177 pounds in 2024 to 25,607 pounds in 2030. The gain, 1,430 pounds in six years, works out to nearly 6%.
The herd itself grows more slowly. USDA projects the national dairy herd expanding from about 9.34 million cows in 2024 to 9.57 million in 2026, then easing back to 9.52 million by 2030.
Heifers held for milk-cow replacement rose by 100,000 head in 2024, the first increase since 2018. It's a signal that some producers are positioning for expansion even as the overall herd count stays historically low.
Higher butterfat and protein levels are stretching the value of each pound of milk further. Modern cows are producing milk with historically elevated components, meaning more cheese per pound and better economics for both producers and processors, per Dykes.
Exports Are Projected to Carry a Growing Share of U.S. Milk
Domestic demand alone will not absorb 15 billion more pounds of milk. USDA projects dairy exports, measured on a skim-solids basis, rising from 21.5% of U.S. milk production in 2027 to 25.2% by 2035.
Of the new cheese produced over the past two years, more than 60% went into international markets. Will Loux, senior vice president of global economic affairs at the U.S. Dairy Export Council and National Milk Producers Federation, shared the figure with Dairy Herd.
Latin America and Southeast Asia stand out as the largest volume opportunities, Loux said. Korea, Japan, Saudi Arabia, the UAE and Australia add further demand for U.S. cheese, fats and high-value ingredients.
The European Union, New Zealand, Australia and South American producers are all competing for the same buyers.
Loux cautioned that other exporters "are unlikely to willingly cede market share."
USDA's projections assume current trade policy holds and no major disruptions hit global markets, an assumption the agency flags directly.
Labor shortages, drought, high feed costs and shifting consumer preferences toward plant-based alternatives all sit on the list of risks. So does any change in tariffs or trade access.
IDFA does not believe there is a single optimal farm size for the industry, Dykes told Dairy Herd. A 200-cow grazing operation in Vermont and a 5,000-cow confinement dairy in Idaho operate under entirely different regional economics.
