With an average decline of about 5% each year since 1992, the US has lost more than 100,000 dairy farms in just over a generation, according to Ben Laine, a senior dairy analyst with Terrain, a reporting service from AgCountry Farm Credit Services, American AgCredit, Farm Credit Services of America and Frontier Farm Credit. “By the end of the decade, there is expected there to be fewer than 20,000 dairy farms in the US. In the near term, the combination of aging farmers and high cattle prices could accelerate exits,” he notes.

Fewer farms does not mean less milk, he continues. The US dairy industry produced 231.7 billion pounds of milk in 2025. That’s 54% more milk than in 1992 despite having 190,238 fewer cows on 107,900 fewer farms — a stunning improvement in efficiency, while the size of farms has increased. Farms with 2,500 or more cows represent only 4% of total farms, while accounting for 45% of total milk sales.

He notes, “Overhead is a key cost category that pressures smaller farms disproportionately. Dairy farms in the US across a variety of sizes and geographies have become remarkably efficient at milking cows (and minimising operating costs). But overhead can be harder to control. Larger operations are in a better position because they can spread it across higher levels of output.”

Because consolidation changes how milk supply responds to markets and who holds leverage along the supply chain, producers will need to prepare to adapt accordingly, he adds.