Dairy Product Manufacturers NAICS 3115

Oct 23, 2025 - Heifer Shortage

• The US dairy industry is facing a potential shortage of its most important resource – milk cows, according to a recent report from CoBank. Record-high beef prices have incentivized dairy farmers to send more calves to beef feedlots and fewer to milk barns, driving dairy replacement numbers to a 20-year low, CoBank reports. The heifer shortage is a looming concern as the nation is experiencing an historic $10 billion investment in dairy processing facilities through 2027. The new dairy plants will require more milk, butterfat, and protein, raising the question: Will there be enough milk cows given the shift toward beef semen usage on dairy heifers and cows? Based on semen sales data, the US dairy heifer shortage could persist and deepen over the next two years. As such, dairy replacement inventories for the milking herd won’t rebound until 2027 based on CoBank models.
• Aging food processing infrastructure – some dating back more than half a century – poses risks for food manufacturers, especially producers of perishable products that must move swiftly through the system to preserve freshness and quality, Food Processing (FP) reports. Older equipment is more likely to break down, interrupting production and potentially leading to product loss and unexpected replacement costs. FP notes that while processing plants have scaled up production and adopted more advanced technologies, underlying systems have struggled to keep up, resulting in a growing mismatch between modern operational demands and aging physical assets. Moreover, many aging plants may not be equipped to handle growing demand and regulatory scrutiny due to lack of capital investment over the years. Because environmental, safety and building codes have evolved since many food processing plants were built, replacement costs can be substantial, according to FP.

• Dairy products are among the 740 US farm products now subject to additional import duties after retaliatory measures by China in response to US-imposed tariffs went into effect in March, according to Dairy Reporter. The new tariffs were levied on top of the current applicable tariff rates. A total of 26 dairy products are subject to the 10% levy including milk and cream, butter, buttermilk, yogurt, dairy spreads, fresh and processed cheese, ice cream, casein, and more. The duties apply to products shipped from the US after March 10 and arriving in China after April 12, according to DR. New data from the US Dairy Export Council shows US dairy export value continues to climb this year after posting near-record exports in 2024. In January, US dairy export value rose 20% year over year to a record $714 million, with almost all commodities showing gains.
• Producer prices for dairy products manufacturers fell 1.4% in August compared to a year ago, after rising 7.9% in the previous August-versus-August annual comparison, according to the latest US Bureau of Labor Statistics data. In August, retail prices for dairy and related products rose 1.3% year over year and 0.1% from July, while the price of milk rose 1.7% YoY but dipped 0.2% from July, according to the August 2025 Consumer Price Index. Employment by the industry grew 2.6% YoY in July, while the average industry wage rose 8% over the same period to a new high of $30.18 per hour, BLS data show. Employment and industry wages each reached new highs in July.