Texas dairy producers meet the needs of a growing market

Texas dairies’ production is up amid higher milk and cheese prices, and growth is not expected to slow in 2025, according to Texas A&M AgriLife Extension Service dairy specialists.

Jennifer Spencer, Ph.D., AgriLife Extension dairy specialist and assistant professor in the Texas A&M Department of Animal Science, Stephenville, and Juan Piñeiro, DVM, Ph.D., AgriLife Extension dairy specialist and associate professor, Department of Animal Science, Amarillo, said increased processing capacity in Texas for dairy products is likely to fuel milk production expansion.

Cheese plants opened in Amarillo, Lubbock and southwestern Kansas, receiving Texas milk in 2024. Another Central Texas-based milk processing plant is expected to open in 2026.

In the marketplace

Recent U.S. Department of Agriculture National Agricultural Statistics Service reports indicate that while the number of Texas dairies decreased slightly, the number of cows and production are both on the rise.

There were 294 Texas dairies at the beginning of 2024 compared to 284 commercial dairy farms beginning in 2025.

However, the number of dairy cows grew from 635,000 head in December 2023 to 675,000 in December 2024, according to the January report. The U.S. dairy herd, on the other hand, saw a slight decrease, going from 9.386 million milk cows in 2023 to 9.339 million head in 2024.

Additionally, the pounds of production per cow have gone up, Spencer said.

The Southwest Marketing Area Market Administrator’s Jan. 23 report showed Texas milk production for December rose from 1.38 billion pounds in 2023 to 1.48 billion pounds in 2024. The yearly total for Texas rose from 16.6 billion pounds in 2023 to 17.1 billion pounds in 2024.

The January report indicated the uniform milk price was $20.55 per hundredweight, up from the $18.37 per hundredweight in December 2023. Cheese prices, or Class 3 milk, remained about $2 below the uniform milk price, but they, too, increased – from $16.04 per hundredweight in 2023 to $18.62 per hundredweight in December 2024.

Factors affecting the market

The rise in overall market prices is partially due to inflation, Spencer said. Feed and transportation costs are increasing, pushing the price of milk to keep up.

Another factor affecting the market, Piñeiro said, is the continued increase in the use of beef genetics in the dairy industry, meaning more dairy calves are going into beef production.

“This is resulting in fewer replacement females being available, and we are seeing record prices for replacement heifers,” he said. “Last January, the price of a replacement heifer was about $1,750, and now it is up to $2,600.”

Another factor affecting the industry is the concern about highly pathogenic avian influenza, HPAI, both specialists said.

In 2024, during the early stages of the HPAI outbreak in Texas, some dairies culled lactating cows, and those cows need to be replaced. This could also mean a temporary slowing down of beef-on-dairy use during this process.

Both AgriLife Extension specialists said the industry is waiting to see if HPAI comes back around, with producers trying to be better prepared and more proactive.

AgriLife Extension district reporters compiled the following summaries:

Panhandle

The district experienced several cold snaps with small amounts of snowfall adding small amounts of moisture to the topsoil. Overall soil moisture was reported as very short to adequate. Evapotranspiration rates were greatly reduced with each cool spell, which helped conserve soil profile moisture. However, precipitation amounts were slipping below long-term averages, which could impact small grains and cover crop production, especially under limited irrigation or dryland conditions. Producers applied composted manure to small grains fields, but those fields will need rain to benefit. Winter wheat crops were mostly poor. Livestock continued to receive hay and protein. Pasture and range conditions were reported from very poor to fair. Overall crops were poor to fair.

South Plains

Conditions were very dry with fluctuating temperatures over the past couple of weeks. Subsoil and topsoil moisture levels were dry. Some counties just wrapped up cotton production. Farmers were starting to fertilize fields in preparation for spring planting. Cattle were in good condition, and some herds were on supplemental feed.

Rolling Plains

The district was in desperate need of rain to replenish soil moisture and support both crops and livestock. Forecasts of potential rain have not materialized. Cattle grazing wheat were still in good condition, but most were receiving hay and supplements to bridge the gap of insufficient wheat growth. Drastic temperature swings also put stress on the wheat crop.

North

Some counties reported around 3-4 inches of rain and below-freezing temperatures. Many counties experienced two rounds of arctic blasts extending hard extreme freezes into the week. Counties reported subsoil and topsoil moisture levels were mostly adequate with some areas reporting surplus moisture. Over half of the pastures and ranges were in fair condition, with about a quarter of counties reporting good conditions. Other area pasture and range conditions were very poor to poor. The prolonged wet and cold conditions delayed topdressings and spraying of wheat. Livestock were in favorable condition, with hay feeding continuing.

East

Rainfall totals reached over 6 inches in some areas, and pasture and field conditions were soggy in many areas. Subsoil and topsoil conditions were adequate to surplus. Pasture and rangeland conditions were fair to good overall. Cattle markets were generally still strong. Houston County reported head counts at sale barns were lower. Livestock were in good condition with supplementation taking place. Gregg County reported wild pig damage and control methods were underway.

Far West

Temperatures ranged from 29 degrees at night to highs of 85 degrees during the day. The region needed rain to improve soil moisture and range conditions. There was no winter moisture this year to help drought conditions. Fieldwork continued, primarily to keep the topsoil from blowing in the high winds. Multiple days of 15-plus mph winds have caused dust storms throughout the region. Much of the wheat was dying due to lack of moisture. Very few irrigated fields remained, and they did not look good. Pastures were very bare, with no winter weeds or grass. Livestock were in fair to poor condition, and lambing began. El Paso County farmers were preparing land for cotton or alfalfa. Pecan producers were pruning trees and preparing orchard floors, and some elected to irrigate early this year due to additional water availability. Temperatures were warmer than normal, which could affect pecan trees if the typical late freeze happens. 

West Central

Some areas reported trace amounts up to more than 1 inch of rain, and temperatures were colder than normal throughout the week. Most of the region was dry heading into spring planting, but fieldwork continued. Wheat and oat fields remained very short, and almost all fields were being used for grazing. Some spring forage was maintained on the minimal moisture availability. Pastures needed rain for the cool-season forbs and grasses. Winter grass started to grow in some areas. January and February weather added some much-needed chill hours to plants and trees. Cattle conditions were fair to good. Most stock tanks were still full, and supplemental feeding continued. Ranchers were feeding a lot of hay while waiting for wheat to improve.

Central

A widespread rainfall delivered 0.5-2 inches of moisture, which improved topsoil moisture conditions. The district experienced a significant drop in temperatures due to a strong cold front dropping temperatures into the mid- to upper 30s, with wind chills making it feel even colder. More cold fronts were expected, potentially bringing even colder air and a widespread freeze. These fluctuating temperatures and precipitation patterns could impact winter wheat and oat crops, which were heading out. The cold snaps may slow crop development and affect overall yield potential. Some limited corn planting had begun, but overall planting was later than normal. Additionally, pasture and range conditions were mostly poor to fair. Producers were monitoring forage availability and considering supplemental feeding strategies. Low stock tank levels and stream flows were reflective of little runoff.

Southeast

Rainfall improved soil moisture conditions. Warm-season grasses were beginning to green up. Preemergent herbicides were being applied. Livestock were receiving supplemental hay, cubes, syrup tubs and minerals. Winter annual grass and weeds were the primary forage for livestock. Field preparations were underway where moisture conditions allowed.

Southwest

Rain was received, which should help pastures and provide moisture for upcoming row crop plantings. Temperatures fluctuated, with rainfall ranging from trace amounts up to 1.25 inches. Colder temperatures, including a hard freeze and precipitation, were expected this week. The freeze may temporarily set back early germinating warm-season plants, though no major damage was anticipated. Livestock conditions remained good. Cattle and sheep prices were high, and producers were managing the cost of winter feed. Supplemental feeding and livestock number reductions continued regularly. Spring lambing, kidding and calving were ongoing.

Coastal Bend

Scattered rainfall ranged from 0.75-3 inches, with temperatures varying throughout the week and a potential freeze in the forecast causing concern. Soil moisture remained marginal, and subsoil moisture was inadequate despite recent precipitation. Wet conditions delayed fertilizer applications and spraying. Corn planting began but was put on hold due to cold weather concerns, while sorghum planting remained minimal. Pastures were beginning to green up, but growth was slow and inconsistent, with more rain needed. Hay supplies remained adequate from the strong spring 2024 season, but the dry winter has posed challenges. Livestock supplementation with hay and mineral tubs continued, and cattle conditions started to decline in some areas.

South

Conditions fluctuated in terms of temperature with very warm to cool days. Mornings were foggy and afternoons were clear. No significant rainfall fell, except for Dimmit County which reported light rain over two days. Drought conditions continued to persist with no rain in the forecast. Topsoil and subsoil conditions were very short. Row crop producers continued planting corn and grain sorghum as they tried to take advantage of whatever soil moisture remained. Cotton planting should follow soon. Citrus harvest continued, and producers reported minimal damage due to last month’s freeze. Some citrus trees were beginning to show new blooms for the coming year. Leafy greens were being harvested. Range and pastures remained in poor condition. Winter weeds were thriving in some areas and provided some grazing for beef cattle and wildlife. Beef cattle producers continued supplementing their herds with hay, range cubes and molasses/protein/mineral tubs. Local markets remained strong with above-average offerings and steady prices for all classes of beef cattle. Beef cattle producers continued thinning herds amid dry conditions and to take advantage of good market prices. Feed prices were still high, and hay demand continued. Ranchers and deer producers continued to supplement their livestock and wildlife, with some producers supplying water to their ponds for cattle and wildlife.