LUBBOCK, Texas (RFD-TV) — Profitable milk and cheaper feed in 2024 set the stage for a supply surge that’s now weighing on prices — and rippling into the beef complex. U.S. dairy cow numbers climbed to 9.52 million in August, the highest since 1993, with Texas at 699,000 head — the most since 1958. With more cows on line, processors are expanding capacity alongside them.
Output per cow is also up. August production reached 2,050 pounds per head — a record for the month and 1.3 percent above August 2024 — pushing three-month milk production 3.6 percent higher year over year. As product piles up, pricing has slipped: 40-lb cheddar blocks have ranged from $1.95 to $1.70 per pound and sit roughly 30 cents below last year; butter fell from $2.50 to about $1.70 by mid-October; and NFDM is near $1.14 — it’s low for 2025.
Those declines are flowing back to mailbox checks while cull dynamics tighten the beef pipeline. Beef cow slaughter remains lower, but dairy culling has matched last year since mid-year and could increase as margins narrow and cull values stay strong — absent any government buyout, the market will do the rationing.
Farm-Level Takeaway: Prepare for softer milk checks into winter, watch cull-cow values and timing, and stress-test cash flow as product prices recalibrate.
Tony St. James, RFD-TV Markets Expert
The federal government’s status is far from the only factor moving the markets on Friday. Two critical reports released today on producer inflation and the status of the U.S. cattle herd are also top of mind.
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