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WASHINGTON – U.S. milk production surged 3.3% above year ago levels in June, with a surprising increase of 146,000 milk cows reported on farms compared to a year ago, according to USDA’s June Milk Production Report, released Tuesday, July 22 by the National Agricultural Statistics Service (NASS).

The report also revised May’s numbers higher. Initially reported at 1.6% above year ago with 114,000 more cows, May 2025 production was revised to 2.4% greater with 134,000 additional cows year-on-year (YoY). In fact, with the May revision, cow numbers increased 66,000 head in just two months — from April to June.

Class III milk futures fell sharply following the report, reacting to the unexpected level of the growth in milk production and cow numbers reflected in the report, while dairy product markets were bolstered a bit by good news in the export department and product inventories in decent shape.

Dairy producers across the country are puzzled. Many are asking: “Where did all these cows come from?” Some doubt the USDA data. Others speculate large, multi-site dairies may not have reported their heifer numbers accurately in prior cattle inventories. Most are simply baffled—especially since many dairies today breed for beef-on-dairy and raise fewer heifers for replacements.

Last week in Market Moos, we noted that the May cow number increase mirrored a 9% YoY drop in dairy cow slaughter—a 20-year low. Slaughter was down by 115,000 head cumulatively from January through May. This suggested some producers were holding on to lower-performing cows to raise another high-priced beef x dairy calf, boosting marginal milk production.

However, the June numbers—and May’s revision—raise new questions about the accuracy of USDA’s data and this culling delay theory.

To explore the reality behind these numbers, I’ve created a quick, anonymous Dairy Herd Survey for our readers. You can scan the QR code with your phone or type this link into your browser: https://www.surveymonkey.com/r/DRWBNRX

The more responses, the more reliable the analysis. Results will appear in an upcoming Farmshine issue.

Economics behind cow-keeping

With high replacement heifer and beef x dairy calf prices, the numbers pencil out to keep low performing mature cows bred for another calf. I’ve talked to producers who are doing just that—it pencils out, if you’ve got the space. (More on that in another edition.)

On the other hand, it’s likely that growth-focused operations, especially vertically integrated ones, are expanding to supply what some are calling “Cheddarpalooza.” New cheese plants are coming online, and cheddar output is forecasted to jump significantly this year.

The cow growth is clearly concentrated in states experiencing new dairy processing expansion. Idaho and Texas—ranked No. 3 and 4 in milk production—account for 90,000 of the 146,000-cow increase, or nearly two-thirds. The remainder is mostly spread across states in the Central U.S., and the Great Lakes region tied to large dairy expansions in conjunction with new processing capacity.

During expansion phases, some large operations may not have reported their in-house heifer inventories in past USDA All Cattle Reports. These animals wouldn’t be visible in national data, and since they aren’t on the market, heifers continue to command high prices—averaging $2,800 to $3,500 for springers through fresh.

Digging into the Milk Production Report

USDA reports 146,000 more milk cows nationally in June 2025 than a year ago. However, in the 24 major milk-producing states, the gain is even higher—151,000 cows—highlighting continued industry consolidation and growth in Central and Southwestern states, as well as unregulated Idaho. Add to this that California stabilized from trailing year ago to boosting production by 2.7% in June YoY.

Let’s look at regional highlights from the June report:

• Central Federal Order (FO 32) – surging
  • Kansas: up 19% milk, up 29,000 cows
  • S. Dakota: up 11.5% milk, up 21,000 cows
  • Colorado: up 7.8% milk, up 9000 cows
  • Iowa: up 2% milk, no cow change
  • Illinois: flat milk, down 2000 cows
• Southwest (FO 126) – surging
  • Texas (No. 4 nationally): up 9.5% milk, up 46,000 cows
  • New Mexico: up 0.6% milk, up 1000 cows
  • Unregulated Idaho (No. 3 nationally) – surging
  • Idaho: up 9.7% milk, up 44,000 cows
  • Utah: up 2.8% milk, up 3000 cows
• Upper Midwest (FO 30) – flattish
  • Minn.: up 1.3% milk, down 1000 cows
  • Wis.: up 0.3% milk, down 5000 cows
• California (FO 51, No. 1 state) – reversing higher; California: up 2.7% milk, up 3000 cows
• Pacific Northwest (FO 124) – declining
  • Oregon: down 1.9% milk, -2000 cows
  • Wash.: down 9.4% milk, -22,000 cows
• Ariz. (FO 131): up 0.3% milk, up 1000 cows
• Mideast (FO 33) – moderate expansion
  • Michigan: up 4.8% milk, up 17,000 cows
  • Ohio: up 2.3% milk, up 2000 cows
  • Indiana: up 1.6% milk, up 2000 cows
• Southeast (FOs 5, 6, 7) – surging in the key states compared with past patterns
  • Georgia: up 9.5% milk, up 3000 cows
  • Florida: up 5.4% milk, down 1000 cows
  • Virginia: up 3.5% milk, up 1000 cows
• Northeast (FO 1) – some expansion, but not in Pennsylvania
  • New York: up 2% milk, up 8000 cows
  • Vermont: up 1% milk, down 1000 cows
  • Pa.: down 0.2% milk, down 5000 cows

The cow boom is concentrated in a band from South Dakota west to Idaho and south through Colorado, Kansas, and Texas. These areas gained a combined 152,000 cows YoY, according to the June Milk Production report.

Will USDA clarify?

We’re hoping USDA will release a mid-year All Cattle Inventory Report this Friday, July 25. Last year, former Agriculture Secretary Tom Vilsack canceled it, citing budget concerns despite record spending for climate projects.

Although not listed on the USDA NASS 2025 calendar, the archive page still shows July 25 as a potential release date. This report would help verify whether heifer inventories were underreported and provide insight into what’s really happening in dairy herd dynamics.

Be part of the data

Please take a moment to complete our own anonymous Dairy Herd Survey here https://www.surveymonkey.com/r/DRWBNRX or scan the QR code with your phone to access it.

Preliminary responses—over 200 so far from producers across geographies, milking 50 to 5,000 cows—reveal some key trends:

About one-third are keeping cows they would have culled and breeding them to beef.

Nearly one-third increased their beef x dairy breeding in 2025 vs. 2024.

Almost 50% are maintaining their beef x dairy breeding level year-on-year.

One-third are holding more questionable cows longer than in the past.

On the other hand, some are also shifting back to raising more heifers.

Your input helps clarify the real picture and what’s ahead for mailbox milk prices. Survey results will be published in an upcoming Farmshine. Feel free to share the link with fellow producers and on social media.