Why Milk Components Matter More Than Milk Production

Corey Geiger and Abbi Prins

September 30, 2024

Key Points

• Since the first release in 1924, USDA’s Milk Production reports have been the gold standard for tracking milk available for processing. However, changes in milk composition mean the report today provides an incomplete picture for understanding whether production is growing or declining, and by how much.
• Milk composition had been stable for decades but in 2011 milk composition of butterfat and protein started to grow. While milk production grew by 16.2%, protein jumped 22.9% and butterfat bounded 28.9% higher by 2023.
• The production trend has doubled down as U.S. milk production on a liquid basis has been down 14 straight months through August 2024. At the same time milk component production has grown in 12 of those 14 months.
• Ultimately, component growth matters just as much as liquid volume growth as over 80% of U.S. milk production goes into manufactured dairy products and less than 20% moves into the fluid beverage category.
• Cheese is a prime example of a product that had benefitted from milk’s growing component yields. In 2010, 100 pounds of milk from the typical U.S. dairy farm yielded a bit more than 10 pounds of cheese. By 2023, higher butterfat and protein content boosted that yield by almost 11%.
• USDA’s Milk Production report is an irreplaceable source of farmgate production available for processing. But with composition growing at a different rate than volume, the report as it now exists provides a picture that is at best incomplete and at worst misleading. An improved report would also track milk components, specifically butterfat and protein.

Read the Report