The U.S. dairy industry is witnessing a significant upswing, showcasing its potential for growth and innovation. Gregg Doud, president and CEO of the National Milk Producers Federation (NMPF), shared insights at the 2025 California Dairy Sustainability Conference held in Visalia, Calif. His address highlighted the resurgence of animal fats in the diet and the promising future of dairy products, including fluid milk.
Dairy’s Time to Shine
Doud emphasized the renewed interest in animal fats and noted that it’s now dairy’s moment to take the spotlight. With $8.5 billion invested in processing pipelines and new investments, such as Chobani’s recent $500 million expansion in its Twin Falls yogurt facility, the dairy industry is capturing attention. Doud challenged the audience by asking, “Where else in agriculture in the world, name another commodity in another country that has this kind of investment that’s going on in the dairy industry in the United States today?” Answering his question, he confidently stated, “The answer is nowhere.”
Emerging Opportunities and Investments
The massive $8.5 billion is spread across 17 facilities throughout the U.S., fueling the industry’s expansion. Doud pointed out the potential for growth in protein demand not just domestically but also globally. The Midwest stands as a primary area for expanding animal protein crush. Highlighting milestones, he mentioned Hilmar’s new cheese-producing facility in Dodge City, Kan.
“The Midwest, these are the only places on Earth that we can expand in terms of animal protein crush today,” Doud says. “Draw a circle with a 300-mile radius around Amarillo, Texas. Dodge City, Kan., last week, we just had the ribbon cutting — an enormous cheese producing facility.”
U.S. Dairy Exports on the Rise
The export value of U.S. dairy products has seen substantial growth year over year (YOY), rising 20% to an impressive $714 million — a January record. The relationship with Mexico as the top U.S. cheese customer continues to strengthen, although January exports recorded a modest 1% increase.
“The cheese exports to Mexico,” Doud enthusiastically remarked. “This is where it’s at, folks. This is why I’m so excited about this industry.”
China’s post-COVID-19 recovery shows a slower tempo, with Doud pointing out that just 300 million of China’s 1.4 billion people are driving dairy demand. He noted some challenges, such as China’s low semen import rates and the impact of high U.S. interest rates on global competition, but remained hopeful that changes in these areas could present future opportunities.
“That’s a leading indicator to say things are not going to go as well in China, no production going forward, maybe there is going to be some opportunity thereafter,” he says, noting that when you have high interest rates in the U.S. that makes the dollar strong, it makes it difficult to compete globally. “Our exports have been a little softer, but we’re still exporting about 16% of our production.”
Trade Imbalances and a Shift in Production
Another critical point Doud highlighted was the trade imbalance between the U.S. and the European Union (EU). Currently, the U.S. imports $3 billion in dairy products from the EU while exporting just $167 million. This imbalance underlines a broader narrative that sees U.S. dairy exports to non-traditional markets, like Guatemala, outpacing exports to the EU.
“It is an outrageous imbalance and trade,” he says. “You realize that we actually export 15 times more cheese to Guatemala than we do the European Union.”
Interestingly, while milk production appears stagnant, the shift in focus to producing more solids is changing the landscape of the industry.
“We have changed this industry,” Doud stated. “This is why we make more cheese because we’ve got more solids.”
The U.S. dairy industry, driven by substantial investments and shifting consumer preferences, is poised for significant growth in the coming years. As the dairy industry adapts to new challenges and opportunities, stakeholders and consumers alike can look forward to an era where dairy continues to thrive and innovate on a global scale.
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