Background

  • Farm Milk Production
  • From Raw Milk to Dairy Products
  • Consumption

Farm Milk Production

Major year-over-year trends in U.S. cows’ farm milk production include (1) a fairly steady increase in milk production and (2) a consistent decline in the number of dairy operations matched by a continual rise in the number of cows per operation. The top five milk production States in 2021 were California, Wisconsin, Idaho, Texas, and New York. Collectively, these 5 States produced more than 50 percent of U.S. annual milk supply. In terms of production, milk cows generally perform best in areas with dry, cool weather. Most U.S. dairy cows are Holsteins, a breed that tends to produce more milk per cow than other breeds. However, Jersey and crossbreed cows have gained popularity in recent years, as milk from these breeds tends to contain relatively high proportions of milk fat and other milk solids compared with Holstein cows.

In the United States, the decision to produce milk is largely made by individuals or families with dairy farm operations. Many of these farmers belong to producer-owned cooperatives. The cooperatives assemble members' milk and move it to processors and manufacturers. Some of these dairy farm cooperatives have a high vertical integration, operating their own processing and manufacturing plants. Although originally local, many current dairy cooperatives are national with members across the country.

From Raw Milk to Dairy Products

In 2021, U.S. farm milk contained approximately 87.00 percent water, 4.01 percent milk fat, and 8.99 percent skim solids on average. Milk is usually separated through various processes into components and processed into fluid beverage milk or manufactured dairy products.

Fluid milk processors face a unique supply-demand situation not shared by most other food products. Farm milk production varies by day, week, and season due to weather and other factors. Similarly, fluid milk sales vary greatly by day and season because of consumer shopping patterns. Because these patterns cannot be precisely predicted— and milk is highly perishable—a system must be maintained to get milk preserved and at the same time accessible where it is needed when it is needed. Shipping milk among locations and storing it for 1 or 2 days solves some of the problem, but a pool of "on call" raw milk is ultimately needed. The portion of this reserve not used in fluid milk products is used in manufacturing other dairy products. Coordinating supply and demand for the fluid market is called "balancing."

Most of the milk supply is used to produce manufactured dairy products. Cheese makes up the largest portion of milk allocated for manufacturing purposes. When cheese is produced, a watery substance called whey is produced as a byproduct. Whey is often further processed into products such as dry whey, whey protein concentrate, and lactose. Other uses of milk include production of frozen products, butter, nonfat dry milk, yogurt, and other types of dairy products.

Consumption

In recent decades, U.S. consumption of total dairy products has risen faster than the growth in population. However, use of individual products has shown great variation. Total U.S. per capita consumption of fluid milk has declined likely due to increased competition from other beverages and a declining share of children in the population.

The growing demand for cheese has been one of the most important forces shaping the U.S. dairy industry. Rising cheese consumption has been aided by the availability of a wider variety of cheeses, more away-from-home eating, and greater popularity of ethnic cuisines that employ cheese as a major ingredient. Mozzarella has been the most popular variety in recent years followed by Cheddar. Consumption of most varieties has grown steadily for many years, as cheese has become a very significant part of U.S. consumers’ diets.

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