U.S. dairy cow numbers and output per cow continue to climb, keeping milk output above that of a year ago for the 14th consecutive month, but the growth is slowing. The USDA’s latest data shows May output at 20.565 billion pounds, up 2.3 percent from May 2025, and follows 2.7 percent rise in April. The 24-state May total was 19.767 billion pounds, up 2.4 percent, and followed a 2.8 percent rise.

April output in the 50 states was revised down 5 million pounds to 19.955 billion, still 2.7 percent above a year ago. The 24-state total was revised down 1 million pounds, to 19.175 billion.

May cow numbers totaled 9.665 million, up 10,000 from the April count, which was revised up 10,000 head and was up 184,000 head or 1.9 percent from a year ago. The 24-state count, at 9.225 million, was up 7,000 from the April total, which was revised up 8,000 head, and was 182,000 head or 2.0 percent above a year ago.

May milk per cow averaged 2,128 pounds in the 50 states, up 8 pounds or 0.4 percent from a year ago. The 24-state average, at 2,143 pounds, was up 9 pounds or 0.4 percent from 2025. The April average was revised down 2 pounds in both.

StoneX stated, “Component adjusted production was up 4.0 percent. The fat content in milk was only up 0.7 percent year over year (YoY) in Jan-Apr, but it was up 1.7 percent YoY in May. It might be a blip or it could be a resumption of the long-run trend. With the herd still building, milk production growth is expected to stay ample through the end of the year unless weather or disease issues knock it back.”

The USDA’s weekly slaughter report showed 47,100 cows sent to slaughter the week ending June 6, up 1,800 head or 4.0 percent from a year ago. Year-to-date 1,210,100 had been culled, up 58,200 head or 5.1 percent from a year ago.

Concern remains regarding the future dairy herd. A new report from CoBank points out that, while it has reached its largest size in 30 years, “Replacement heifers that represent the next generation of milk cows remains historically low.

“The number of heifers available to enter the milking herd has fallen sharply, dropping to the lowest level since 1978,” says CoBank, and “The decline comes as strong financial incentives are prompting dairy farmers to produce calves destined for the beef supply rather than milk production.”

The report warns “Replacement heifer supplies are projected to shrink even further in 2026 before beginning to rebound in 2027. With replacements in short supply producers are retaining adult dairy cows that would have typically been culled, contributing to the overall increase in the U.S. herd. Producers are making more beef-on-dairy calves, further tightening dairy replacement heifer supplies. This has pushed heifer prices into record territory, well over $3,000 per head.”

Corey Geiger, CoBank lead dairy economist, said, “On most dairy farms, net margins are currently being driven by the beef check, not the milk check. Five years ago, calf and cull cow sales accounted for 5 percent of a dairy farm’s bottom line while milk sales represented 95 percent of their revenue. Today, beef sales account for 12 percent to 15 percent of revenue on many farms, with some operations approaching 20 percent when measured on a per hundredweight basis. That shift is reshaping the U.S. dairy herd, most notably through the decline in replacement heifers.”

In politics, the Senate Agriculture Committee has completed its Farm Bill. The National Milk Producers Federation said the bill will “Bring greater certainty to producers,” and listed its key dairy highlights. They include mandatory cost and yield surveys to ensure future changes to Federal Milk Marketing Orders reflect the most current market conditions, building off funding in the One Big Beautiful Bill Act (OBBBA); extending the Dairy Indemnity Program and the Dairy Promotion and Research Program, and making permanent the Dairy Forward Pricing Program.

The bill also supports voluntary, producer-led conservation programs, such as the Environmental Quality Incentives Program, with a continued designation of conservation funds for livestock producers and streamlines the process for conservation Technical Service Provider certification to ensure producers have access to qualified individuals to help fill the gaps in needed technical assistance.

It also establishes a long-term policy directive for the government to proactively negotiate protections for common cheese names like “parmesan” and “feta,” and reassigns export promotion funding initially included in the OBBBA into existing Farm Bill programs like the Market Access Program to make it easier to use by USDA’s international promotion partners, including the U.S. Dairy Export Council. More details are posted on the NMPF website.

The International Dairy Foods Association says the bill will “Broaden dairy nutrition incentives, strengthen key dairy programs and provide certainty in the agricultural economy. The legislation now goes to a Compromise Committee to iron out the differences with the House version, which passed April 30.

Meanwhile, the Wisconsin-based American Dairy Coalition (ADC) applauded the introduction this week of bipartisan legislation Recognizing Engineered Alternatives as Lab-Created (REAL) Butter Act, introduced by Congressman Tony Wied (R-Wis.) and Congressman Josh Riley (D-N.Y.). The legislation would require fake-butter made through laboratory or industrial processes to be clearly labeled as “lab-created.” See the ADC website for more details.

Dairy Market News reports that Central region demand for milk was strong from Class II processors but Class IV demand was softening. This enabled cheesemakers to purchase spot milk at below Class prices, which ranged $4.50 under to $1.50-over Class. Cheesemakers ran busy schedules, with some saying production outpaced demand. Cheese demand was steady, though some said interest picked up ahead of next week’s holiday.

Cheese production in the West was steady, though milk production is slowing seasonally, but still available, especially in the Northwest. 

Domestic cheese demand was steady, with retail outpacing food service. Export demand is slow to steady and plenty of product available. Inventories are slowly growing, but with the decline of milk, it is not expected to last, according to DMN.

Central region milk output is steady, but contacts in the Southwest say summer temperatures are starting to have a negative impact on milk output. Component levels are also declining in the region, contributing to lighter cream output. Demand for cream is strong from Class II processors. Butter makers are working to build inventory for use later in the year. Domestic butter demand is steady to higher, and export interest remains strong, according to DMN.

Milk and cream output in the West is more than sufficient to meet butter production demand. Most facilities are using contracted volumes of cream to keep churns full, with enough left over to sell on the spot market. Buyer demand was steady to light this week.