By Darren Turley
TAD Executive Director
The dairy industry is one of the core pillars of Texas agriculture, both in sheer dollars and in how it anchors rural economies and the milk processing infrastructure. Dairy contributes heavily not only through the milk our Texas dairy farmers produce, but also through value‑added processing and a growing stream of dairy‑origin beef that supports the state’s larger beef sector.
Milk is consistently the second‑highest agricultural commodity in Texas by cash receipts, behind only cattle and calves. In 2022, Texas produced milk generated about $4.36 billion in cash receipts, compared with roughly $11.9 billion for cattle and calves and $4.32 billion for broilers, making milk one of the “big three” commodities driving state farm income. This ranking underscore dairy’s importance not only as a standalone industry but also as a stabilizing counterpart to the state’s dominant beef and poultry sectors.
From about 2015 to 2025, Texas climbed from roughly sixth to the third‑largest milk‑producing state in the nation, surpassing New York and Idaho; today only California and Wisconsin produce more milk. Over that period, Texas milk output expanded rapidly, rising from 16.6 billion pounds (about 1.9 billion gallons) in 2023 to 17.1 billion pounds (almost 2 billion gallons) in 2024.
Early 2025 data showed continued strong momentum, including a 10.6% year‑over‑year gain in April 2025 to 1.511 billion pounds of milk produced that month. This sustained growth reflects both larger herds and high‑producing cows, alongside investment in modern facilities.
Dairy is also one of the highest‑value processed commodities in the state’s agricultural sector. When multipliers are included, agriculture and food processing together account for about 1.7% of Texas’ gross domestic product, with dairy playing a prominent role in that total.
Recent and ongoing investments in processing – such as multiple new cheese plants in the Texas Panhandle and a major new fluid milk plant operated by Walmart in Central Texas – are adding demand for hundreds of additional truckloads of milk per day. These plants deepen dairy’s role in Texas food manufacturing, create skilled jobs and help ensure that more of the value chain, from farm to finished products, stays inside the state.
Geographically, dairies are heavily concentrated in the Texas Panhandle and Central Texas. In these regions, they anchor local economies through demand for feed grains and forages, trucking and logistics services, milk processing, equipment sales and repair, veterinary and hoof‑care services, and a wide range of other support industries. Despite recent challenges – drought, H5N1 (avian bird flu), volatile milk prices – Texas A&M AgriLife and industry leaders generally project continued growth, driven by rising processing capacity, efficient high‑producing herds, and Texas’ strong position in both domestic and export dairy markets.
The fairly recent practice of breeding dairy cows with beef bulls (known as beef-on-dairy) to produce producing calves specifically intended for beef production and the feedlot is further strengthening the industry’s economic footprint. There is no precise, up‑to‑date public statistic that states exactly how many million pounds of dairy‑origin beef Texas produces per year, because official data typically report cattle and beef in aggregate rather than separating dairy‑ versus beef‑origin animals.
However, reasonable inferences can be made from herd sizes and national patterns. Texas had about 675,000 dairy cows at the start of 2025, up from 635,000 a year earlier. These cows are eventually culled and mostly enter the beef supply as lean cows for grinding.
Nationally, dairy‑origin animals – cull dairy cows plus dairy and beef‑on‑dairy steers and heifers – are estimated to account for roughly 15% to 20% of total U.S. beef production in recent years, with that share increasing as the national beef cow herd shrinks and beef‑on‑dairy breeding expands.
As the third‑largest milk‑producing state and home to one of the largest dairy herds in the country, Texas is a major contributor to this dairy‑origin beef stream.
Overall, Texas maintains about 12.2 million head of cattle and calves, including its 675,000 dairy cows. Given that roughly one‑fifth of the U.S. beef supply is dairy‑origin and that Texas is a national leader in both beef and dairy, it is reasonable to conclude that Texas dairies contribute hundreds of thousands of head and hundreds of millions of pounds of dairy‑origin beef annually, even though exact state‑level dairy‑beef tonnage is not reported separately.
As our state’s dairy industry grows and strengthens, the Texas Association of Dairymen is working hard to make sure actions at the state Capitol and at state regulatory agencies continue to both understand and support this positive trend.
