Dairy heifer supply continues to shrink

Dairy replacement numbers are at a 20-year low. In a new report from CoBank, that trend is expected to continue until 2027. With high beef prices, the dairy heifer had more value in the feedlot than for future milk production. Dairy farmers also used more beef semen on dairy heifers and cows to capitalize on the demand for beef. CoBank said dairy replacement heifers were bringing upwards of $4,000 per head at Minnesota auction barns this summer. This trend is happening while dairy processors are investing more than $10 billion in facilities over the next two years.

Milk production outlook

U.S. Department of Agriculture World Agricultural Outlook Board Chair Mark Jekanowski has increased the forecast for 2025 and 2026 U.S. milk production. Both cow numbers and the amount of milk per cow were raised. “Those changes translate into about a 900-million-pound increase in production for 2025 and a 1.3 billion-pound increase in milk production for 2026,” said Jekanowski. “Year over year, 2026 milk production would be up about 1.2 billion pounds at 230.4 billion pounds next year. Feed costs are also anticipated to support a higher output per cow.”

Butter prices move lower

Butter prices have seen a drop to levels not seen since 2021. Ever.Ag dairy analyst Katie Burgess says the collapse is due to record-high butterfat levels on U.S. dairy farms. “In a typical year, you’d tend to see the price of bulk butter spike in September and October as we head into that holiday baking season,” said Burgess. “This year is definitely a bit of an anomaly.” U.S. butter is the cheapest in the world, fueling exports that recently reached their highest level since 2014. “We’re exporting more butter; we’re exporting more high-fat products as well, so it has given us an opportunity to win in the international marketplace.”

Dairy exports on the rise

U.S. dairy exports surged in June, accounting for 18.7% of domestic milk solids production, the highest level since 2022. At the same time, U.S. fluid milk sales were up slightly from a year ago, while yogurt consumption saw a double-digit increase. Overall, domestic use of milk solids rose 3% year-over-year, and even with higher milk production in the second quarter, stocks of major dairy products held steady. The Dairy Margin Coverage margin improved by 70 cents per hundredweight thanks to lower feed costs, while retail dairy prices have remained mostly unchanged over the past three years.

Beth Ford: A storm is gathering in American agriculture

Land O’Lakes President and CEO Beth Ford is sounding the alarm over the farm economy. In an editorial in Time magazine, Ford said less than 5% of farms will be profitable this year. That’s a scenario that has happened for three straight years. Ford also said nearly 90% of farm families need off-farm income to keep their operations viable and put food on the table. Ford advocates a focus on farm policy, including a robust trade agenda, immigration reform and a new farm bill.

Trump seeks high court decision on tariffs

The White House is asking the Supreme Court for an expedited ruling to review an appeals court decision. It said that President Trump does not have the authority to implement most of his tariffs. In a 7-4 ruling, a federal appeals court rejected President Trump’s tariff strategy. In a White House news briefing, Trump said tariffs are a tool for negotiating trade. “If that ability were taken away from us by a liberal court, acting on, essentially, foreign nations asking to get help from the United States government, when they’ve been doing this to us for 40 years, that’s why we have $38 trillion in debt,” Trump said. “We won’t have it for long if they allow us to do what everybody knows we should be able to do.” If tariffs are taken away, Trump said the U.S. would end up being a third-world country. The appeals court ruling does not take effect until Oct. 14, to give the administration time to ask the Supreme Court to intervene.

A broken system

Agricultural labor is a top priority for the American Farm Bureau Federation. South Dakota Farm Bureau President Scott Vanderwal, who also serves as AFBF vice president, cites the dairy industry’s inability to source H2-A workers. “I’ve had dairymen tell me the biggest threat to their operations is not financial, it’s the lack of labor and not being able to hire enough people to help,” VanderWal said. “Obviously, it is an animal welfare issue; the cows need to be fed and milked every day, and if that’s not done, that’s not good.”

New program offers support for Minnesota dairy farmers

Minnesota dairy producers now have access to the Dairy Profitability and Enhancement Program, aimed at helping farms strengthen operations. “It works with organizations to create teams or help support dairy farmers to become more profitable. The idea is to support dairy farmers to make decisions and how people come together and move their dairy farm forward,” said Minnesota Department of Agriculture Farm Financial Assistance Administrator Kami Schoenfeld. Grant funds can cover practical expenses such as travel, equipment and program development. “A lot of it goes to actual programming and the people it takes to do that program.” Applications are now open through the Minnesota Department of Agriculture.

New sustainability goals for Horizon Organic

Horizon Family Brands plans to announce new sustainability goals by the end of 2025. Five years ago, Horizon Organic was the first company in the industry to commit to a “carbon positive” supply chain by 2025. With that strategy, Horizon Organic would buy third-party carbon credits to offset its greenhouse gas emissions. A company spokesperson was interviewed by AgFunderNews and said the new focus would be on decarbonizing its entire supply chain.

New baler from Deere

John Deere is introducing a new round baler to its North American lineup. The V452M is designed to support high-volume silage and heavy crop conditions. These balers will be ready for shipping this November.

New round baler coming to market

New Holland has introduced the Roll-Belt 1 Series round baler for model year 2026. With three updated models, this new series features more durability, more feeding capacity and more technology.

Expo has a new trade show manager

World Dairy Expo has named Kay Faherty as its trade show manager. In her previous role, Faherty was the senior exhibit coordinator for the International Dairy Deli Bakery Association.

Minnesota rural development director named

Agriculture Secretary Brooke Rollins has appointed Mick Ditlevson as the state director for rural development in Minnesota. Ditlevson is a fifth-generation farmer in Owatonna who served as Rollins’ deputy chief of staff for operations. He also spent time in the White House, the Environmental Protection Agency and the energy department.

Trivia challenge

In terms of sales, Wendy’s is second only to McDonald’s in sales of fast food cheeseburgers. That answers our last trivia question. For this week’s trivia, what is the name of the ice cream treat sold at McDonald’s that includes things like M & M candies and Oreo cookies in soft serve vanilla ice creatm? We’ll have the answer in our next edition of the Dairy Star.

Don Wick is owner/broadcaster for the Red River Farm Network of Grand Forks, North Dakota. Wick has been recognized as the National Farm Broadcaster of the Year and served as president of the National Association of Farm Broadcasting. Don and his wife, Kolleen, have two sons, Tony and Sam, and five grandchildren, Aiden, Piper, Adrienne, Aurora and Sterling.