The domestic dairy market continues to grow at a steady rate. Peter Vitaliano, vice president of economic policy for the National Milk Producers Federation, said declines in fluid milk have been offset by demand for cheeses and dairy-based products. The domestic market has experienced growth in the last 25 to 30 years. In addition, the U.S. exports 17 to 18% of the annual production.

As of Jan. 1, the dairy herd is 41,000 head lower than last year and there are 14,000 fewer replacement heifers, according to Michael McConnell, a livestock, dairy and poultry analyst for the USDA. Feed costs have also been trending lower.

Exports have been forecast to grow faster than imports on both a fat and skim-solid basis. Domestic use is projected to increase on a fat basis, with skim-solids declining. McConnell said tightening supplies from major dairy exporters will support global and U.S. dairy prices.

Read more on the 2024 dairy industry outlook here.