Making big dairy moves in the Empire State
Allison Wilton is a market analyst for the National Milk Producers Federation and U.S. Dairy Export Council. In a recent episode of the “Cow Convos” podcast, Wilton discussed the current state of the dairy industry in the U.S. and New York State. The monthly podcast is hosted by Kaitlyn Lutz and Daniela Gonzalez, regional dairy management specialists with Cornell Cooperative Extension.
The Upshot
“Farmers started the year with really strong margins and projected growing demand from new processing plants that were opening and ramping up production across the nation,” Wilton said.
In NYS specifically, there is increased processing capacity coming online in the next year. The 745,000-square-foot fairlife milk processing plant in Webster will open soon. fairlife is a subsidiary of the Coca-Cola Company. Processors Chobani and Upstate Niagara are also expanding.
Dairy farmers significantly ramped up production in 2025 in response; NYS added 10,000 dairy cows this year. Production in NYS and the U.S. overall is up over 2% compared to 2024.
“That doesn’t look to be slowing anytime soon,” Webster said.
Farmers are also enjoying relatively inexpensive feed costs as corn and soybean markets have been fairly soft throughout the year.
Beef x dairy calves continue to provide additional cashflow to many farmers as they take advantage of record high beef prices. “That’s bolstering bottom lines for many farmers across the nation,” Wilton said.
She predicts that beef prices will remain elevated for at least the next year.
But There’s Some Hiccups
Tariffs have impacted markets and the demand for U.S. dairy overseas. China is one of the U.S.’s biggest dairy export markets, and in April 2025 export volumes dropped off significantly when tariffs were implemented. However, a 90-day pause on tariffs led to volumes jumping back up as China rebuilt inventory from the previous month’s losses and front-loaded purchases in anticipation of potential future tariff changes.
“However, tariffs end up in that situation are going to significantly impact U.S. dairy exports,” Wilton said. Labor also remains an issue for dairy farms.
Recently, dairy product prices have dipped, which will impact milk checks throughout the remainder of 2025 and into 2026. Sales of cheese and fluid milk have softened, but this is countered by strong demand for high protein products like cottage cheese and Greek yogurt.
According to Wilton, high protein dairy products are having a moment due to the rise and popularity of high protein diets.
Chobani and Upstate Niagara have taken notice of these trends, and they’re expanding and opening new facilities to meet that demand.
“All of this is to say there’s a lot of variables that are impacting the dairy industry right now and dairy farmers. And it’s pulling in a lot of different directions, but in general, farmers should be feeling all right right now,” Wilton said.
Looking Ahead
Since there is a lot of uncertainty and volatility in the current market, managing that risk is important. USDA programs like the Dairy Margin Coverage (DMC) Program (enrollment opens Jan. 29, 2026) and the Livestock Gross Margin for Dairy Cattle Insurance Policy can protect against falling margins.
Dairy Revenue Protection can cover an unexpected decline in revenue. Additionally, farmers can utilize the futures market to hedge their input prices and to watch out for rising feed costs.
Wilton expressed overall optimism for the future of NYS’s dairy industry. “We’re having a lot of growth and processing capabilities within the next couple of years. As those processing facilities open up, they’re going to require more milk. There’s going to be an increase in demand, and dairy farmers, especially in New York, have a proven history of being able to rise to the occasion and to meet that demand with high quality milk,” she said.
As this demand is met and growth continues, Wilton anticipates that dairy processing companies will take notice and see an opportunity for further investment in the industry. This will encourage more investment in the state and across the nation.
by Sonja Heyck-Merlin
