Talk of growth, expansion and new opportunities have historically been quieter in the Southeast than in other regions, but Travis Senn, assistant director of milk marketing and analytics at Southeast Milk Inc. (SMI), says dairy farmers in this region are entering 2025 with a “level of confidence they haven’t had in years.”
“Dairy farmers are in the best financial situation they’ve been in for quite some time,” Senn says. “2024 was one of those rare years when everything aligned – strong milk prices, reasonable feed costs and relatively stable input expenses that allowed many dairy farmers to find themselves in the black instead of just scraping by.”
Georgia dairy producer Ruben Schaapman from Schaapman Holsteins LLC in Abbeville is cautiously optimistic since despite better financial conditions, rising input costs need to be monitored closely to maintain strong margins going forward.
“Generally speaking, I think most dairy farmers are in a good position for 2025,” Schaapman says. “Herd sizes are continuing to increase, but we’re also seeing a lot of investment in facilities and technology. Over the last decade, we’ve made huge strides in improving cow comfort and reproduction effectiveness. While we’ve seen a decline in the number of farmers, there has been a significant increase in milk production per cow. Dairy farmers here continue to become increasingly efficient when it comes to making milk.”
Some of the cow comfort upgrades include improved housing, high-efficiency fans and misters, rubber flooring to promote hoof health, sort gates for less cow handling, automatic pre- and post-dip sprayers to streamline parlor efficiency and activity monitoring systems.
Processing, sustainability and the implementation of on-farm technology are among the opportunities for dairy producers in the Southeast this year as they enjoy better financial margins.
“Across the country, more financial incentives are coming online for farms that invest in conservation practices, renewable energy and environmental stewardship,” Senn says. “Dairy farmers have always been leaders in sustainability, but now there are more tangible benefits to prove it. The farms that embrace these opportunities will be the ones best positioned for long-term success.”
Milk production growth is another big opportunity this year.
“Farmers finally have both the market demand and the financial flexibility to expand – something they’ve been hoping for as long as I can remember,” Senn says. “We’re in a rare moment where the industry is asking for more milk, and farmers are eager to deliver. The challenge now is finding the cows. With strong prices and positive margins, replacement heifers and fresh cows are in high demand, and some farms are struggling to source the animals they need to grow efficiently.”
The new milk processing plant coming to Georgia and the reformulation of the Class I milk price are the two biggest things creating optimism for Schaapman right now.
“Being that we are a fluid milk market, we see both of these as a positive for our industry,” he says.
Due to the cyclical nature of dairy markets, risk management continues to be important.
“Some producers have locked in favorable margins for 2025, while others are cautiously watching for signs of market shifts. The key now is using this financial strength to build resilience for future downturns,” Senn says.
Bird flu
While bird flu or highly pathogenic avian influenza (HPAI) H5N1 has not been widespread in dairy herds in the Southeast at the time this article was written, Senn says the concern is real.
“Many producers have ramped up their biosecurity measures, limiting farm visitors, adjusting protocols for handling livestock and keeping a closer eye on herd health,” he says. “The industry is watching closely to see how this develops, especially as more research emerges about how it spreads and what long-term impacts could look like. In accordance with the recent USDA order on testing requirements, the state of Florida plans to pull on-farm bulk tank samples for testing, and Georgia has begun testing at milk plants.”
Dairy processing
Georgia has two commercial milk processing facilities and one larger facility that is currently projected to open later this year in Valdosta.
“We feel that the new processing will be beneficial,” Schaapman says. “With the human population continuing to grow in this area, we hope to see more new plants come online in the future.”
Senn agrees.
“Dairy farmers are always hopeful, but right now, that hope feels more justified than it has in a long time,” he says. “For the first time in my career, a new processing facility is being built in the Southeast later this year. While the full impact on the market remains to be seen, it’s a strong signal that there’s room for growth in the region – something dairy farmers haven’t heard in years.”
Senn advises that as this facility comes online, adjustments in milk flows and processing volumes at existing milk plants are expected.
“While it’s too soon to say exactly how those shifts will play out, changes in where and how milk is processed will likely follow,” he says. “Naturally, this has prompted discussions among dairy producers and industry stakeholders as everyone evaluates what these changes could mean for logistics, milk movement and long-term market outlook. For dairy farmers, the key focus remains on ensuring that processing capacity keeps pace with production and market needs. While changes in processing aren’t new, maintaining a strong and balanced processing network is essential in keeping milk moving efficiently and ensuring long-term sustainability for the region’s dairy sector.”
Policy
While the rosy outlook is bringing newfound optimism, policy and regulation continue to be major concerns.
“The farm bill remains in limbo, and producers are anxious to see how key dairy programs will be handled, especially under the new administration,” Senn says. “Labor remains a constant challenge, with immigration policy uncertainty making it difficult to secure a reliable workforce. And on the regulatory front, new environmental mandates and state-level policies could add additional costs or restrictions that make it harder for farmers to operate efficiently.”
Trade is also a key concern.
“Trade is my biggest concern heading into 2025,” Senn says. “There’s been a lot of talk about potential tariffs and trade disputes with Canada and Mexico – our two largest dairy export customers. If we lost access to those markets or see increased trade barriers, it could have devastating consequences for milk prices. Dairy exports play a crucial role in balancing supply and demand, and any disruption to those key trading relationships would send ripples through the entire industry.”
The long-awaited Federal Milk Marketing Order (FMMO) reform will go into effect this year, which is expected to boost farm-level milk prices in the Southeast.
“The increase in Class I differentials will provide a needed boost to farm-level milk prices, and standard component levels are now better aligned with the realities of today’s milk market. There’s a lot of optimism surrounding the switch back to the ‘higher of’ formula for the Class I mover – something many think will help put more money back into farmers’ pockets, though it will likely vary month to month,” Senn says.
Aside from FMMO changes, recently passed intraorder transportation credits are helping offset the costs of hauling milk long distances, addressing a long-standing challenge for producers in this region.
