The U.S. dairy industry is undergoing a historic boom. This is being fueled by surging protein demand, booming beef-on-dairy calf prices, and record-setting investments in processing infrastructure.

Farmers are increasingly crossbreeding dairy cows with beef genetics, producing premium calves worth up to $1,400 each. According to National Milk Producers Federation President Gregg Doud, dairy producers are “hitting on all cylinders,” combining strong milk output with profitable cattle sales.

Dairy processing capacity is expanding at an unprecedented pace. More than $11 billion is being invested in 53 new or expanded plants across 19 states. International Dairy Foods Association CEO Michael Dykes calls the scale phenomenal. It reflects a surge in both domestic and export demand.

Milk production has risen nearly 5% year over year. The USDA projects an additional 27 billion pounds by 2034. U.S. dairy exports reached a record $8.2 billion, while per capita domestic consumption hit an all-time high of 661 pounds. This was led by cheese, butter, yogurt, and high-protein milk products.

Despite the momentum, labor shortages continue to be a critical barrier. With solutions on the horizon, experts predict U.S. dairy’s remarkable growth trajectory will continue.

Read more on factors driving the dairy boom here.