Dairy Farmers Struggle with Oversupply of Butterfat

Advances in cow genetics and nutrition have led to record-high milk fat levels, causing a market glut and lower prices for dairy farmers.

Published on Feb. 4, 2026

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In recent years, advances in dairy cow genetics and nutrition have led to a dramatic increase in the fat content of milk produced in the United States. While this has been a triumph of dairy science, it has also created challenges for the industry, as the oversupply of butterfat has caused butter prices to collapse. Dairy farmers are now facing a "tough year" as they deal with the consequences of their cows producing too much fat. Cheese makers have also had to adjust their manufacturing processes to handle the richer milk, while processors struggle to find uses for the excess butterfat.

Why it matters

The rapid rise in milk fat content highlights the unintended consequences that can arise from advances in agricultural technology. While dairy farmers have been incentivized to maximize milk fat production, the resulting oversupply has disrupted the market and created financial challenges for many in the industry. This story underscores the need for a balanced approach to agricultural innovation that considers the broader implications for producers, processors, and consumers.

The details

Over the past two decades, the average dairy cow in the U.S. has increased her annual milk fat production from 670 pounds to 1,025 pounds, driven by breakthroughs in cow genetics and nutrition. Dairy farmers have been able to selectively breed cows to produce higher-fat milk, while also carefully managing their diets to further boost fat content. However, this has led to a "tsunami" of butterfat flooding the market, causing butter prices to collapse. Cheese makers have had to make adjustments to their manufacturing processes to handle the richer milk, while processors like Grassland Dairy have struggled to find uses for the excess fat.

  • In 2000, the average dairy cow produced 670 pounds of fat in her milk per year.
  • Today, the average dairy cow produces 1,025 pounds of fat in her milk per year.
  • Milk fat content reached a record high of 4.24% in 2024.

The players

Chad Dechow

A dairy-cattle geneticist at Penn State University.

Corey Geiger

The lead economist for dairy at CoBank.

Kevin Harvatine

A dairy nutritionist at Penn State University.

Dean Sommer

A cheese and food technologist at the Center for Dairy Research at the University of Wisconsin at Madison.

Trevor Wuethrich

The president of Grassland Dairy, a large butter maker based in Wisconsin.

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What they’re saying

“We really have an oversupply right now.”

— Corey Geiger, Lead economist for dairy at CoBank (The Atlantic)

“It's extra cost, extra steps, extra bother. They're transitioning from the world they knew, when it comes to the fat content of milk, to the world we're dealing with.”

— Dean Sommer, Cheese and food technologist at the Center for Dairy Research at the University of Wisconsin at Madison (The Atlantic)

“Cows do not make milk fat from thin air.”

— Kevin Harvatine, Dairy nutritionist at Penn State University (The Atlantic)

What’s next

Dairy farmers are already looking to focus more on increasing milk protein content, as protein levels are more difficult to improve through genetic selection than fat. However, the high-milk-fat dairy cow is unlikely to go away anytime soon, as the genetic changes already made will continue to impact milk production for years to come.

The takeaway

The rapid rise in milk fat content highlights the need for a balanced approach to agricultural innovation, as unintended consequences can disrupt established markets and create challenges for producers, processors, and consumers. This story underscores the importance of considering the broader implications of technological advancements in the dairy industry.