Dairy Products Profile

By Madeline Schultz, content specialist, AgMRC, Iowa State University, schultz@iastate.edu.

Profile revised March 2013 by Diane Huntrods, content specialist, AgMRC, Iowa State University.


Only about one-third of the U.S. milk supply is actually processed into milk and cream products; the remaining two-thirds of the milk supply is used to manufacture a wide range of dairy products. Sales of these dairy products, such as butter, ice cream and yogurt, account for tens of billions of dollars annually in the United States. Producers can capture a part of that billion-dollar market by processing and selling their own line of value-added dairy products manufactured on their farms.


The United States had 1,278 dairy product manufacturing plants in 2011, up from 1,250 plants the previous year. With 211 dairy product plants, Wisconsin continued to support the most plants in any state. Other leading dairy processing states were California with 114 plants and New York with 108 plants. 

Value-added Products

U.S. butter production in 2011 totaled 1.8 billion pounds, 15.7 percent more than the previous year. California produced 34.4 percent of this butter, but 82 dairy plants across the country processed butter. More than half of the butter came from cream not needed when milk was used for fluid milk or cheese. Butter consumption per capita (person) has remained steady through the years, averaging 4.9 pounds in 2010.

Frozen Desserts
As of 2011, 406 plants in the United States processed ice cream. The table below shows the amount of regular ice cream, lowfat ice cream, frozen yogurt and sherbet produced that year. While the amount of regular ice cream and sherbet declined from the previous year, the amount of frozen yogurt jumped by double digits.

Frozen Dessert Production

Frozen Dessert 2011 U.S. Production, in million gallons % change from 2010
Ice Cream, Regular 900 -3.1
Ice Cream, Lowfat 440 5.8
Frozen Yogurt 60.7 21.2
Sherbet 45.0 -8.7

Source: Dairy Products 2011 Summary, NASS, USDA, 2012.

In 2010, per person consumption of ice cream was 13.3 pounds, lowfat ice cream consumption was 5.8 pounds per person and frozen yogurt was 1.0 pounds. According to the USDA, per person ice cream consumption peaked at 23 pounds in 1946. Per person consumption from 1949 through 1987 was relatively constant. Since 1988, U.S. consumers have generally eaten less ice cream overall.  (ERS 2012)

Sour Cream
Total sour cream production in the United States was 1.3 billion pounds in 2011, up 2.2 percent from 2010. Sour cream was processed at 114 dairy plants throughout the country. By volume, New York processed the most sour cream, followed by Texas and California.

Yogurt production in 2011 totaled 4.3 billion pounds at 130 processing plants. In contrast, yogurt production in 1980 was 570 million pounds. Per person yogurt consumption was 11.8 pounds in 2008, well below the 62.8 pounds of yogurt consumed annually in Sweden.

Yogurt is being touted as a healthy or functional food due to probiotics. According to Dairy Management Inc., probiotics “are key ingredients in any product promoting digestive health.” About 80 percent of the yogurt manufactured in the United States contains Lactobacillus acidophilus. The Bifidobacterium strain is also found in dairy products.

Yogurt is now being incorporated into other products. General Mills', Kellogg's and Quaker Oats sell cereals containing yogurt. McDonald's and Wendy's offer yogurt-based products on their menu. Purina has introduced dog and cat foods containing yogurt. Yogurt has also been added to toothpaste, mouthwash, facial masks and suntan products.


The bulk of U.S. dairy products is still consumed domestically. Dairy products that are exported include butter, cheese, ice cream, yogurt, whey, lactose, infant formula, milk powders and fluid milk and cream. Primary markets for U.S. dairy product exports are Mexico and Canada.

Exports of U.S. butter totaled 43,224 metric tons (MT) in 2012 and were valued at more than $159 million. Both quantity and value declined by double digits from the previous year. Saudi Arabia was the top market for U.S. butter exports, followed by Iran, Morocco and Egypt.  (FAS 2012)

The United States exported more than 46,000 MT of ice cream in 2012 valued at $125.7 million. Both quantity and value jumped by double digits from the previous year. Mexico remained the top buyer of U.S. ice cream exports, followed by the United Arab Emirates and Canada.  (FAS 2012)

Yogurt exports totaled more than 13,000 MT in 2012 and were valued at $31.5 million. Both quantity and value saw small increases from 2011. Canada remained the largest market for U.S. yogurt, experiencing double digit increases in both quantity and value from the previous year.  (FAS 2012)

In 2012 USDA's Agricultural Marketing Service issued dairy export certificates for goods going to more than 100 different countries, supporting the export of nearly 3.3 billion pounds of dairy products valued at more than $4.1 billion. One company was able to meet the international demand for their popular blue cheeses after receiving a certificate to export raw milk cheese products to the European Union. The certificate gave the creamery a huge boost, and its sales have quadrupled.  (USDA Blog, December 2013)


According to USDA's Foreign Agricultural Service, the United States imported buttter valued at $35.7 million in 2012, primarily from New Zealand. Even less ice cream was imported that year; it was valued at $11.4 million. On the other hand, yogurt imports were valued at $30.5 million and originated mainly in Canda or Germany.


The dairy export forecast indicates favorable conditions for 2013. Demand for U.S. dairy exports are expected to remain strong with economic growth in most of the countries that are key markets.


Dairy Products Annual Summary, National Agricultural Statistics Service (NASS), USDA.

Food Availability, Economic Research Service (ERS), USDA.

Global Agricultural Trade System, Foreign Agricultural Service (FAS), USDA.

Global Probiotic Opportunities, Natural Products Insider, 2011.

Livestock, Dairy & Poultry Outlook: Tables, ERS, USDA.

Outlook for U.S. Agricultural Trade, ERS and FAS, USDA.

U.S. Dairy Export Council

U.S. Dairy Trade: Situation & Outlook, Babcock Institute, University of Wisconsin-Madison.

Profile written November 2006 and revised March 2013.

Links checked July 2013.