For the last three years or so, the beef industry has been the talk of the town.
From the hills to the White House, beef has been a major topic of conversation – some positive, some negative.
But there is another big industry out there, and one I feel we all take for granted. It’s the dairy business, an industry which is growing and moving to different locations around the country.
As of August 2026, the U.S. dairy herd was at 9.71 million cows, which is up 167,000 head from August 2025. U.S. milk production, as of August, was at 19.9 billion pounds, up 1.7 percent from a year ago.
But the big story here is where all of this milk is coming from, and it is not all from where you would think.
The leading issue for dairies relocating is finding adequate water for dairy production, cows and crops to feed the cows.
Kansas and Texas are leading the surge with an increase of around 29,000 head of milk cows year-over-year, followed by South Dakota, which is up 19,000 head; Idaho, which is up 12,000 head and Indiana, which is up 8,000 head.
The U.S. dairy industry is changing with a historic geographic movement. For the first time, 10 states now account for 74 percent of all U.S. milk production, with the top 14 states accounting for 84 percent of the nation’s milk production.
U.S. dairies are also exporting dairy products to other countries. In 1995, dairy exports totaled around two to three percent, and today it is around 17 percent.
However, this is not the case with Canada. They keep American milk products priced really high so no one will buy them, which has been going on for years.
While we all think milk is the prime dairy product, it is almost a byproduct for some dairies. Today, milk products have become the leading reason for rising revenue, as more milk moves into manufactured products at consumers’ demand – cheese, yogurt, butter, cottage cheese and other milk products.
These products can raise milk revenue from $101 to $352 more per cow annually at average U.S. production levels.
According to a CoBank news release, “For generations, beverage milk dominated U.S. dairy consumption, keeping butterfat and protein levels relatively stable. As consumers increasingly turned to cheese and other dairy foods, milk pricing formulas evolved to the multiple component pricing concept.”
“Today, more than 90 percent of the U.S. milk supply is priced based on butterfat, protein and other solids, largely because manufactured dairy products account for most farmgate milk use,” CoBank continues.
Those in the dairy industry are also finding a wide difference in product levels across regions and among individual dairy herds.
As I have described before in this column, dairies are making good use of beef genetics and taking advantage of higher beef prices to raise bull calves to sell as premium beef.
The dairy business is as strong as ever with their range of new products, and consumers are enjoying it. It’s not just a gallon of milk nowadays, as dairy coolers are filled with a lot more products.
