Tag: dairy economics
Dairy = Growth, Expansion, Opportunity and Optimism
Editor’s Note: This column is adapted from remarks given Nov. 11 at NMPF’s Annual Meeting.
I love where we are in this industry right now. We are right where we want to be.
Yes, there are going to be challenges. Yes, there’s going to be uncertainty. But we’re in expansion mode. And I love it.
What I want the theme to be today, in our industry, is growth and expansion and opportunity and optimism. I understand that that’s tough to do when you’re in Washington DC these days. It’s a tough place to do business. It’s a tough place to get anything done.
But the relationships that the National Milk Producers Federation has are unbelievably strong. Whether it’s Senator Thune or Chairman GT Thompson, up one side and down the other. The unbelievable work, unbelievable work that has gone in on getting whole milk in schools, by Senator Roger Marshall from Kansas, and Senator Welch from Vermont. Bipartisan work.
I want to give you a quick status on whole milk in schools, and where we are. We’re so close on this one, and this is a huge thing. Not just for U.S. consumers, and for all of us who have kids in school, but it’s just doing the right thing.
Meanwhile, the One Big Beautiful tax bill is a monumental accomplishment in terms of our global competitiveness. I know the tariffs are disruptive, but that’s a small piece of what amounts to a U.S. industrial policy. We have a tax policy that I think makes us really competitive globally — and not only does that help us on the farm in terms of confidence and investment, but the bill holds other benefits as well: the Section 199A depreciation, the estate tax, the increase in the reference prices for soybeans and wheat, the extension of DMC through 2031 — all were in that bill, folks. That was a critical piece that we got done.
In terms of global competitiveness, we also have to continue with trade deals. USTR is working day and night. These deals are going to matter. We’ve got deals done with Malaysia and Cambodia. And you say, “Well, my goodness, is that a really big deal?” Yes, because these deals got rid of barriers, we got rid of restrictions. We’ve got some really good trade agreements coming, too, in terms of Indonesia, Vietnam, Thailand, and the Philippines. If you’ve noticed, and think about where the president was recently in those countries, those are all the countries that border China, folks. And that’s the really interesting thing: In terms of strategy, the president said, “Well, I’m going to make sure that I go visit all these countries first, before I talk to President Xi in China.” That’s not by coincidence.
Having the opportunity to have duty-free access into Southeast Asia is something that we have wanted across all of agriculture, and in particular in the dairy industry, for a long, long time. That’s going to make a huge difference for us.
Along with these opportunities, we also have some of the best leaders in this industry. Our new NEXT program is an exciting part of our trade future, and the implementation and the federal milk marketing order has been really, really smooth so far. The ability for you to be unanimous in what you wanted as an industry, as you presented this to the government, made all the difference.
As a former government official, I can tell you, when you’re not unanimous, that gives that government official the ability to kind of pick and choose what they want to do. When you come in and say, “This is unanimous, this is what we want to do,” you’ve got no wiggle room as the government official. You’ve got to implement this. And that’s why you were so successful in this.
I want to talk briefly about 2026. At NMPF we have done some strategic planning, and we’ve got some work to do on government, governance, leadership development. The YC program is an unbelievable asset for us in this industry. Thank you all for participating in that. But one of the things we’re going to change at National Milk as soon as this meeting is over is, we’re going to try to have a new lease on life on state issues. You’ve got somewhere between 150 and 200 different pieces of state legislation in the food business right now, and in agriculture. We’re going to try to tackle this, not to lobby on these issues, but just to keep track of what we have going on and to be able to coordinate.
On the trade side, we’ve got the USMCA review. We’re constantly dealing with China. We’ve got a farm bill to finish, and then of course, we have a midterm election here coming this fall. And a challenge to 2026 is, you’re going to have your folks that represent you at home say, “Well, we’ll get to that after the midterm election.”
Well, this immigration issue can’t wait for that, folks. It is without question our number one issue in dairy, but across all of agriculture, in my opinion. And I think, to give you the charge today on all of this, I think we need to remind our elected officials that we’ve got to milk the cows every day. We have to do what we do every day. We don’t have time to wait for the inconvenience of an election to get things done in Washington.
So your charge today is this: We are expanding, we are growing, we are doing well. We have great relationships, and we look forward to the year we have ahead. I’m optimistic.
Gregg Doud
President & CEO, NMPF
Dairy Production Up, Product Prices Down in October
NMPF’s Bjerga on the Push for Whole Milk
NMPF Executive Vice President Alan Bjerga tells viewers how they can get involved in the push to put whole milk back on school lunch menus in an interview with RFD-TV. NMPF has put a call to action on its website, nmpf.org, which allows Americans to write their lawmakers, urging them to vote “Yes” on the Whole Milk for Healthy Kids Act in the House of Representatives. The legislation has already passed the Senate and is expected to pass the House easily — if it can get onto an already crowded floor schedule.
NMPF’s Mooney Reflects on Dairy, Discusses its Bright Future
Randy Mooney, a dairy farmer from Rogersville, MO and for 17 years the chariman of the National Milk Producers Federation, reflects on his tenure shortly after stepping down from the role at the organization’s annual meeting. Mooney, who remains on NMPF’s executive board, discusses dairy’s bright future and the honor of serving dairy in an interview with RFD-TV.
Rollins Touts Milk Action Plan at Annual Meeting
ARLINGTON, TX – Agriculture Secretary Brooke Rollins touted the Trump administration’s milk action plan to support American dairy farmers today at NMPF’s annual meeting.
“I want to be very clear. We will never stop fighting for those of you in the dairy industry and across rural America we have reached that golden age for our producers,” said Rollins, a Texas native who keynoted the Joint Annual Meeting hosted by NMPF, the United Dairy Board and the United Dairy Industry Association. “Dairy farmers have delivered for America for 250 years, and now it’s time for us to deliver for you.”
Rollins spoke to roughly 750 farmers, cooperative leaders and industry professionals gathered to discuss industry topics ranging from an economic outlook to dairy labor challenges. NMPF, the largest U.S. dairy farmer group, is holding a series of discussions on policy issues throughout the meeting, ranging from the need to pass the Whole Milk for Healthy Kids Act to creating lasting labor solutions for U.S. dairy farmers.
In her remarks, Rollins outlined USDA’s dairy priorities, outlining the administration’s four-point approach to support the industry, including:
- Incentivizing dairy consumption through changes to the Dietary Guidelines for Americans, expected in December or early January;
- Working to drive down input costs;
- Facilitating investments in American milk processing; and
- Expanding markets to help milk producers prosper.
Rollins also noted the importance of farm-labor issues, pledging to seek federal changes to rules and regulations in coordination with the departments of Labor and Homeland Security while noting that broader changes will require congressional action. “We are acutely aware of the unique labor needs of the dairy industry,” she said.
Rollins became the 33rd U.S. Secretary of Agriculture earlier this year after serving as the Founder, President, and Chief Executive Officer of the America First Policy Institute. During President Trump’s first administration, she was the Director of the Domestic Policy Council and Assistant to the President for Strategic Initiatives in the White House. She also previously served as Director of the Office of American Innovation. In these roles, she developed and managed the domestic policy agenda of the Trump administration.
Rollins’s remarks kicked off a busy day at the conference, with remarks from immediate past NMPF Chairman Randy Mooney, newly elected NMPF Chairman Brian Rexing, and NMPF President & CEO Gregg Doud as well as a luncheon featuring awards from the National Dairy Farmers Assuring Responsible Management (FARM) Program and NMPF communications.
A reception sampling top-performing cheeses from NMPF’s annual cheese contest is this evening.
Dairy’s Future Bright, IDFA, NMPF Chairmen Say
Dairy’s future is bright, and it’s brightest when the industry is united toward common goals, the chairmen of the International Dairy Foods Association and the National Milk Producers Federation said.
“$11 billion or so in projects are happening or about to happen that will significantly grow the industry capacity throughout the country,” said Daragh Maccabee, CEO of Idaho Milk Products and Chairman of the International Dairy Foods Association (IDFA) in the podcast released today. “That means the processor community is stepping up, and we all know that the dairy producer community will do its part as dairy farmers always, always do. And aligned with that investment also comes furthering innovation capabilities or further investment in innovation capabilities so that the U.S. can continue to lead the way in delivering value for milk in increasingly sophisticated ways.”
The discussion covers the unique qualities of the U.S. dairy industry, including its scale, efficiency, and sustainability. Maccabee and Mooney, who serves as chairman of the National Milk Producers Federation and Dairy Farmers of America, the largest U.S. dairy co-op, with the strength of cooperatives and industry organizations are also highlighted as keys to industry progress. However, dairy faces challenges around labor shortages and trade uncertainty, they said.
“We need new laws that help farmers continue to have the labor that we need on the farms to produce the milk. And without that, that’s the biggest critical issue that I see as what could affect future dairy production in this country, is just making sure the cows get taken care of and the cows get milked under the labor standards that we have today,” Mooney said.
Still, the industry’s overall outlook remains something to cheer about, said Mooney, who soon will be stepping down as NMPF’s chairman. Reflecting on nearly two decades of leadership in that role, Mooney said it’s been an honor to be part of a profession that improves people’s lives.
“This industry is going to be bright for the future of farming. It’s going to be bright for the producers,” he said. “And not only that, what makes me feel good at the end of the day is on our individual farms.”
To hear more Dairy Defined podcasts, you can find and subscribe to the podcast on Apple Podcasts, Spotify and Amazon Music under the podcast name “Dairy Defined.”
NMPF Staff Deliver Outlooks, Trade Messages
NMPF staff reached out across dairy and agriculture audiences in September and during the August congressional recess with appearances in local and national meetings, discussing dairy’s economic outlook and the importance of free trade.
NMPF’s Jaime Castaneda, executive vice president for policy development and strategy, provided agricultural trade leaders and government officials a snapshot of opportunities and challenges for U.S. dairy exports in an unprecedented trade environment as a panelist at this year’s Midwest Agricultural Export Summit on Aug.13.
Hosted by South Dakota Trade in Sioux Falls, the event convened producers, policymakers and trade professionals in a forum to equip farmers and ranchers with the tools necessary to compete and grow in international markets. Castaneda joined a panel, “Breaking Down Barriers: Agriculture Industry Perspectives,” to discuss existing barriers to dairy trade and the Trump Administration’s newly announced trade frameworks.
Meanwhile, economics team staff addressed market outlooks domestically and internationally.
Will Loux, head of the joint economics team for NMPF and the U.S. Dairy Export Council, traveled Sep. 8-12 to Sydney, Australia to explore the potential for NEXT and U.S. dairy products in that market.
NMPF Market Analyst Allison Wilton gave a market outlook to the American Association of Bovine Practitioners in Omaha at its annual conference on Sep. 11. Later in the month she gave a similar presentation to Darigold staff in Seattle.
Stephen Cain, Vice President of Economic Policy and Market Analysis, in September presented at the U.S. Dairy Ingredient Supply Seminar in Ho Chi Minh City, Vietnam, and to Bangkok, Thailand for the U.S. Dairy Supply & Innovation Seminar.
Butter exports shift in our favor
By Will Loux, Senior Vice President, Global Economic Affairs
In an article earlier this year, I asked the question whether the U.S. could export its way out of the glut of cream that had filled the market. I posited that while it would take a while for U.S. exports to start growing in earnest due to the high cost of entry for first-time exporters, the market signals were such that the U.S. would inevitably need to sell more butterfat overseas.
As evidenced by June and July’s export data, that flow of butterfat to international markets has arrived in earnest. June was the U.S.’ largest month of butter exports since 2014, only to be bested just one month later. The U.S. even managed to sell over 2,000 metric tons (MT) of butter to the European Union in July, overcoming a normally cost-prohibitive tariff of 50 cents per pound. The U.S. is also exporting greater volumes of anhydrous milkfat than ever before. In fact, combined exports of butter and anhydrous milkfat (AMF) have grown by more than any other dairy product so far this year on a component-adjusted basis.
The question today is no longer whether the U.S. will export butterfat but rather how much, and can the U.S. become a consistent exporter moving forward?
From a short-term perspective, the path seems clear for the U.S. to sell more butterfat overseas. The U.S. remains highly competitive on price today despite European and New Zealand prices falling. Just as importantly, the U.S. still has plenty of supply available for export despite the surge in exports and solid domestic sales of butter. Simply, the exponential growth in U.S. milkfat tests combined with U.S. dairy herds in expansion mode means the U.S. should have allocation available at an affordable price for international customers for the foreseeable future. While making export spec butter is usually a special run for American manufacturers, U.S. exporters and international buyers are undoubtedly working to get U.S. butterfat products in variety of overseas markets.
Even from a longer-term perspective, there are plenty of reasons to suggest the U.S. could be undergoing a paradigm shift in favor of greater export business for butter and AMF. The fat-to-protein ratio in milk continues to rise, meaning U.S. cheese manufacturers are now faced with more milkfat than required for cheesemaking. Additionally, the rise in ultra-filtered and protein-fortified beverages will also result more cream moving onto the market. Finally, and just as importantly, the recovery in global demand means international buyers are looking for suppliers besides New Zealand and Europe, the latter of whom have been retreating from commodity fat markets within the last several years.
The investment and strategic foresight to position the U.S. as a consistent player in global butterfat markets, will take plenty of time. However, it wouldn’t be the first time the U.S. dairy industry has identified an opportunity, embraced the challenge, and emerged stronger and more resilient for it.
This column originally appeared in Hoard’s Dairyman Intel on Sept. 15, 2025.
FMMO Modernization Takes Effect, With NEXT Next
- Final Rule updating Federal Milk Marketing Order pricing formulas implemented June 1
- NMPF Exports & Trade (NEXT) gained approval from NMPF’s Board of Directors and started accepting bids
NMPF’s Economics team saw the culmination of a multi-year effort to update the Federal Milk Marketing Order pricing formulas on June 1, when the new FMMO rule took effect.
The “higher-of” Class I price mover for most non-ESL milk has been restored; dairy product make allowances and Class I differentials nationwide are updated, and USDA is no longer using barrel cheese to determine the Class III price. USDA will implement a final part of the rule increasing the component composition factors for skim milk in all FMMO price classes Dec. 1 to avoid disrupting existing risk management positions.
NMPF successfully argued for these necessary updates in five specific proposals presented at a record-long FMMO hearing from late summer 2023 to early winter 2024. The arguments all flowed from the fundamental principle that FMMO product price formulas must evolve with the changing structure of the dairy industry to properly fulfill their role of accurately translating dairy product prices into milk values embodied in the orders’ classified prices. The rule comes after more than four years of effort that included more than 200 meetings to formulate and defend NMPF’s proposal, led by NMPF leaders and experts.
Also spearheaded by economic analysis and consultations, NMPF’s Board of Directors approved the NMPF Exports & Trade (NEXT) program to succeed the Cooperatives Working Together export assistance program, at its June board meeting, with bids beginning in July.
NEXT expands its service to dairy producers and to testing innovative new ways to expand U.S. dairy’s market share. NEXT provides an effective means to move domestic dairy products to overseas markets by helping to overcome U.S. dairy’s trade disadvantages. New initiatives in the new NEXT program include:
- Expanding the program’s product mix
- Creating market development initiatives that provide targeted, additional support beyond primary assistance to level the playing field and drive U.S. export volume growth in key markets around the world where the U.S. is at a tariff
disadvantage and/or where the U.S. has the room and ability to gain market share - Enhancing program operations to assist in NEXT’s mission by extending delivery periods, removing volume limits and providing greater insight into program operations; and
- Creating a strategic advisory council to guide program strategy.
NEXT charges cooperatives paying into the new program two cents/cwt of member milk, a reduction from the four cents/cwt previous assessment in the CWT program. Within the first month of the program, NEXT-assisted export sales boomed, reaching nearly 38 million pounds of product – a tremendous start for the new program.
Dairy Exports Surge in June, Dairy Product Stocks Hold Steady
June DMC Margin Rises $0.70/cwt
The June margin for the Dairy Margin Coverage Program was $11.10/cwt in June, an increase of $0.70/cwt from May. The June all-milk price was unchanged from May at $21.30/cwt, while the June DMC feed cost formula dropped by $0.70/cwt for the month, as the prices of all three formula feed components decreased, particularly that for premium alfalfa hay.
The forecasts maintained by DMC Decision Tool on the USDA website at the end of July showed the DMC margin topping out $13.20/cwt in November and averaging $12.11/cwt for the year.
