Unprecedented Genetic Gains are Driving Record Milk Components

Corey Geiger and Abbi Prins

March 27, 2025

Genetic improvements within the U.S. dairy herd are fueling historic gains in key milk components needed to produce cheese, butter and a variety of other popular dairy foods. While U.S. fluid milk production has remained relatively flat in recent years, butterfat and protein levels within the nation’s milk supply are growing at a record pace as more producers are employing genetics to optimize milk composition.

The steady upswing in milk components is paying dividends for dairy producers and positioning dairy processors for continued growth. Over 80% of the U.S. milk supply goes into manufactured dairy products that rely on butterfat and protein content. Demand for those two key milk components is rising as $8 billion of new dairy processing capacity is slated to come online through 2027.

The combination of genetics and market incentives have propelled milkfat and protein to record levels both on a percentage and per-pound basis. Butterfat posted its fourth straight annual record when evaluating data going back over a century. In 2021, milkfat broke through the 4% ceiling and bested a 76-year-old record that stood since the close of World War II. In 2024, butterfat levels charged even higher to average 4.23% nationally, based on calculations using monthly data from USDA’s National Agricultural Statistics Service.

Protein content has been climbing, too, with new consecutive yearly records posted from 2016 to 2024. The 2024 milk marketing year finished with a 3.29% average protein content. This bookends a tremendous upward move considering protein levels stood at 3.04% in 2004, based on Federal Milk Marketing Order data.

Some people may question if the U.S. dairy industry can keep up with this historic pace of change on component production. This question is particularly important as overall U.S. milk production has stalled in recent years. Not only did U.S. milk output post its first back-to-back years of declining production since the 1960s at -0.04% and -0.23% in 2023 and 2024 respectively, in 2022 milk growth was a meager 0.07%. 

This situation makes growth in milk components even more critical, especially considering the generational investment in dairy processing with over $8 billion of new processing assets coming online through 2027. These record milk component levels are important as over 80% of the U.S. milk supply goes into manufactured dairy products, where product yields are driven by milk components, not fluid milk volume.

For deeper perspective, look at pounds, as that drives processing throughput. From 2001 to 2010, milk, butterfat, and protein production, on a per-pound basis, all improved in a tight window ranging from 13.8% to 15.4%. That meant tracking milk composition from dairy farm patrons was a straightforward endeavor.

New science brought new opportunity

The game-changing story for the upward movement in components is genomics. Its predictive power comes from comparing an individual’s unique DNA sample to the overall population. This has become the dominant force in reshaping the composition of milk headed to dairy processing plants.

Genomic testing on dairy heifer calves is growing at an exponential rate, which further fuels momentum. After genomic technology was released in 2009 to the dairy industry, it took seven years to genotype the first 1 million dairy males and females. Then, it took two years to reach the 2 million threshold. As confidence in the system gradually grew, dairy farmers began running more tests with each successive year, further building momentum. By March 2021, the dairy industry moved past 5 million tests and flew past the 10 million mark in December 2024. Of those tests, 66% have been run on U.S. dairy cattle and the remaining 34% of tests are compiled from 72 other countries.

Genetic progress, and thus improvement in milk components, takes place two ways via genomic testing, both revealing about 70% of a young calf’s potential before she matures into a cow. The first improvement comes via sire selection. Artificial insemination companies select the most elite young bulls from genomic test results. Dairy farms then purchase frozen bull semen from those companies to sire the next generation. The second improvement is on farm, as dairy farmers also can genomic test their own heifer calves and keep the best from each year’s crop to become milk cows.

The best way to illustrate this evolving narrative is to compare genetics with management. (Management accounts for every factor outside of genetic improvement in dairy cows.) In a dataset compiled by USDA, and later maintained by CDCB, management factors were the lead driving force into the production improvements realized on U.S. dairy farms from 1957 through the 1980s. From 1980 through 2000, the bundle of management factors and genetics were near equal in delivering gains to milk production. By 2000, genetics started to overtake management factors as breakthroughs in reproduction technology, such as breeding synchronization, made artificial insemination programs easier to implement.

The wide adoption of genomics by artificial insemination companies and dairy farmers by 2009 empowered the genetic revolution for milk production growth. By 2015, genetics contributed over 60% to improvements in milk production. By 2022, the number topped 70% based on the milk production gains from cows born that year.  The use of gender-sorted semen to create heifer calves from the top half of the herd amplified genetic gains. By 2024, 61% of all dairy semen sold in the U.S. came from this category. This trend gave rise to the beef semen on dairy cow trend or what some farmers would say, “sexed semen on the best and beef semen on the rest.” In recent years, another movement has emerged: Dairy farmers are creating conventional and in vitro fertilized embryos from elite females, further accelerating genetic progress.

It’s important to mention that CDCB only reports milk production. If the trends for butterfat and protein were measured, they would be nearly identical to CDCB’s results, based on published reports by dairy cattle geneticists.

Base change brings perspective

All of this brings us to base change. By 1965, it became apparent that genetic progress in dairy cattle had improved so much that it was time for a base change to have more equal comparisons between improvements from genetic traits over time. This base change or “roll back” on traits was first proposed to keep genetic evaluation numbers from appearing inflated or unrealistic. Every five years, CDCB hits the reset button and starts tracking the next cohort of dairy cows. The adjusted genetic base enables producers to easily compare new cow evaluations with previous ones. The larger the change, the larger the genetic gains.

This April, Holsteins will experience the largest base change in its genetic history. Overall, Holsteins led all major dairy breeds by having a 45-pound rollback on butterfat. That is 87.5% higher than the 24-pound base change in 2020. Remember, that rollback or base change is a sign of progress. The larger the change, the larger the genetic gains. While not quite as large on a percentage basis, protein production will roll back 30 pounds in the upcoming April genetic evaluations. This is 1.67 times the improvement from 2020 when 18 pounds of protein were trimmed off U.S. genetic evaluations.

To fully appreciate how large this genetic base change has become in the genomic era, one simply needs to look back a few years. In 2015, the Holstein base rolled back 17 pounds for butterfat and a mere 15 pounds five years earlier in 2010. When it comes to protein, the shift was even smaller at 12 pounds and 14 pounds, respectively, in 2015 and 2010.

The data from Holsteins are important to the overall dairy industry because it has the largest dairy cattle population base in the U.S. Last year, 83% of dairy bull semen sold in the U.S. came from Holsteins. As a result, genetic progress in this breed plays a pivotal role in production gains delivered to dairy processing plants.

The Jersey breed represents the next largest group of dairy cows. When combined with Holsteins, the two breeds and crosses among them comprise over 95% of the U.S. dairy cow population. Like Holsteins, Jerseys have made gains with a 20-pound base change for butterfat and a 15-pound roll back for protein in the April 2025 genetic evaluations.

Market incentives and heritability form a power base

Selecting for highly heritable traits and having a market incentive to do so has formed a strong foundation for dairy producers to develop their herds to produce more butterfat and protein. Heritability estimates for butterfat and protein pounds range from 20% to 25% among peer-reviewed studies. Milk, stature, and body weight are the only other of the 49 traits presently reported for dairy cows with the same heritability range. Therefore, genetic selection could very well push butterfat content to over 5% in the next decade if herd management, particularly nutrition, can keep up with genetics. Meanwhile, protein is highly and positively correlated to butterfat in the world of dairy cattle genetics; if progress is made on one trait, the other follows suit.

If 5% butterfat and 3.5% protein doesn’t sound possible, consider that based on the December 2024 CDCB genetic evaluations, the top Holstein bull available to sire the next generation was $1,484 NM$. (The Net Merit Index – NM$ – is the most universally implemented trait index across all major dairy breeds represented in one measurement based on U.S. dollars.) In contrast, the theoretical “Super Cow” is $5,722 NM$, based on an evaluation of over 7 million Holstein genotypes in the CDCB database by AGIL senior research geneticist, Paul VanRaden. For additional perspective, in some parts of the world, milk from water buffalo averages over 7% butterfat.

All this points to the foundational premise that the butterfat and protein boom has just begun, as the Net Merit index suggests a 400% upside potential. Even when the industry hits that limit, producing components with less feed and other inputs will push Net Merit even higher. Therefore, genetic selection and genomic testing will be driving butterfat and protein production for the foreseeable future.

The authors would like to thank external reviewers including John Cole, Chad Dechow, Tom Lawlor, Jay Weiker, George Wiggans, and Nate Zwald.