Dairy producers heard a mixture of good and bad news at the Dairy Strong Conference in Green Bay as analysts and industry experts tried to make sense of rapid policy changes and market forces.
Mike North, president of the producer division of Ever.Ag, cautioned that market cycles are signaling challenges including lower milk and livestock prices.
“Years that end in six suck,” said North, but adds there are reasons for optimism.
According to the International Dairy Foods Association, U.S. dairy processors are investing a record $11 billion across 19 states to expand capacity, including $1.1 billion in Wisconsin.
“Processing capacity is essential and it enables us to envision a great future,” North said.
Dairy producers have responded by rapidly growing their herds and North said in 2025, the U.S. dairy herd increased by more than 200,000 cows — the most since 1993. In addition, there is an ever increasing growth in volume and milk solids.
Productivity requires 100,000 cows culled in order to stay even and it is expected that 100,00 cows to be added in the next year, according to Marin Bozic, founder and CEO of Bozic LLC. That will put downward pressure on milk prices.
“Protein has saved us,” Bozic said. “Thank god for whey.”
An increase in consumer demand for high protein products has helped stabilize the market even as cheese and other consumer products have wavered.
Bozic pointed to a policy change as another boost to the dairy industry. Federal government dietary guidance unveiled in January emphasizes full fat dairy as a healthy choice. Bozic said that when children drink whole milk when young, they tend to drink it as they become adults.
“Margins look OK, but they are vulnerable,” North said. “Profitability doesn’t look as scary when your milk and beef prices are added together.”
Some of the vulnerability is a result of changes in the beef industry, where meat processors have started to take plants out of production as high prices have reduced consumer demand. It means farmers have fewer profitable opportunities to manage their herds through breeding and culling strategies.
North said now would be a good time for dairy producers to prepare and hedge their investments through dairy revenue protection and other industry tools.
“Risk management needs to be part of your farm’s plan,” Bozic said.
That also includes managing compliance with rapidly changing immigration policies.
Compliance is exacting and can be costly, so producers were advised to understand their rights, prepare for potential site visits and keep rigorous documentation about compliance.
The biggest challenge with immigration enforcement for agriculture is uneven enforcement, according to Bozic.
Finally, he said it is worth looking ahead to how automation and artificial intelligence will impact agricultural labor and industry costs as a whole.
“We are on the precipice of a major technological revolution,” Bozic said.
