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.
Since then, growth rates for milk, butterfat, and protein production have decoupled, and butterfat and protein significantly outpaced growth in milk production.
See the complete, in-depth article by Corey Geiger and Abby Prins here: https://www.cobank.com/web/cobank/knowledge-exchange/dairy/unprecedented-genetic-gains-are-driving-record-milk-components
Source: CoBank
