Key Takeaways
- Component Focus: CoBank latest report highlights that U.S. dairy producers are using genetic selection to increase butterfat and protein levels, key to manufactured dairy products.
- Record Levels: Butterfat hit a national average of 4.23% and protein reached 3.29% in 2024.
- Processing Demand: Over 80% of U.S. milk is used in processed products, aligning incentives with component optimization.
- Genomics Role: Genomic testing and selection for heritable traits are central to continued gains.
- Outlook: CoBank projects that growth in component levels will continue through market incentives and genetic advances.
CoBank’s Latest Report Highlights Increasing Milk Component Yields
Genetic improvements in the U.S. dairy herd are contributing to historic gains in butterfat and protein content—two critical components for cheese, butter, and other dairy products. While overall fluid milk output has remained stable in recent years, component levels are rising steadily as dairy producers utilize advanced breeding practices.
More than 80% of the U.S. milk supply is used in manufactured dairy products, underscoring the importance of butterfat and protein. New dairy processing capacity worth $8 billion is expected to come online by 2027, further driving demand for these components.
Role of Genomics in Herd Improvement
The shift toward higher component levels is being accelerated by the adoption of genomic testing. By comparing the DNA of individual animals with broader herd data, producers can select for traits that are strongly associated with butterfat and protein production.
“As dairy farmers leverage their genetics programs to select animals for traits associated with milk component levels, there is untapped potential for how high butterfat and protein percentages can go,” said Corey Geiger, lead dairy economist at CoBank.
Recent Performance Trends
- Butterfat: Reached a record national average of 4.23% in 2024, marking the fourth consecutive year of record highs.
- Protein: Averaged 3.29% nationally in 2024, continuing an upward trend since 2016.
Over the past 15 years, the rate of increase in milk components has outpaced overall milk volume growth. From 2011 to 2024, butterfat increased 30.2%, protein rose 23.6%, while milk production expanded 15.9%.
Market Incentives Align with Genetics
Multiple component pricing models place nearly 90% of a milk check’s value on butterfat and protein, creating strong financial motivation for producers to optimize for these traits. “Selecting animals for highly heritable traits and having a market incentive to do so has formed a strong foundation for dairy producers,” Geiger said.
Outlook for Milk Composition Trends According To CoBank
According to CoBank, the outlook for butterfat and protein production remains strong as genetic tools become more widely adopted and processors continue to require higher quality inputs. With the continued focus on optimizing composition rather than volume, U.S. dairy operations may be positioned for improved margins and better alignment with future processing demands.
Read the complete report here.
