CoBank

We are excited to have Abby Groves as our guest on The Dairy Download.

Abby is an economist in CoBank's Knowledge Exchange Research Division, primarily supporting the dairy and animal protein sectors.

Abby, welcome to The Dairy Download.

Thank you so much for having me.

Okay, Abby, first, before we get into the meat of things, no pun intended, please tell us a little bit about CoBank and your role with the company.

So CoBank is a part of the farm credit system and we are here to provide financial services to rural America and in agriculture.

My current role at the bank, which I've been here for a little over two and a half years now, is I'm in the knowledge exchange division and I help cover the dairy and animal protein spaces.

So I look at market trends and we write reports and give presentations and go all across the country to talk about what's going on in livestock.

I'm Rod Bain reporting for the U.S. Department of Agriculture in Washington, D.C.

U.S. dairy producers are stepping up efforts to increase the protein content of milk as changing market incentives and global demand reshape the industry, according to a new report from CoBank.

The report says milk protein production began outpacing butterfat production in August 2025 after protein values surpassed butterfat values for the first time in several years.

That shift has encouraged farmers to focus more heavily on boosting protein levels, which are critical for cheese production and increasingly valued in global dairy markets.

So let's get to it.

I want to start off in dairy with a report from CoBank.

U.S. milk components are growing, but they're growing out of balance.

Since we last examined the global components landscape last year, U.S. butterfat has surged faster than protein, creating a mismatch between what the milk supply is producing and what cheesemakers and other dairy processors increasingly need.

These electric cooperatives have three banks.

One's called CoBank.

Another is National Rural Utility Cooperative Finance Corporation.

That's a mouthful.

The recent investments that are making it the new production hub.

A new report from CoBank proves that the dairy industry is shifting its focus to protein.

High protein levels are becoming more valuable in global markets.

And right now, the US is trailing behind the European Union and New Zealand when it comes to protein levels.

Speaking of this, fertilizer costs could remain elevated through 2027, potentially into 2028, as tight phosphate supplies, geopolitical risk, and affordability concerns continue shaping the market today.

CoBank lead economist Jackie Vaca says some of the pressures producers faced this year are likely to persist.

Urea prices, they've fallen back near pre-war levels, but she says part of that decline reflects farmers delaying purchases or reducing fertilizer use rather than a complete supply recovery.

Producers entered this year with relatively strong fertilizer inventories because many had purchased ahead.

And I could tell by the bounce in her voice that this was something more than just talking about World Dairy Expo.

And so I listened to it and she said, I was driving down the road to a work meeting for CoBank to Minneapolis.

I'm like, I better call that one back right away.

Breath was taken away as she told me that I had won the award.

Again, it's very reflective too of this journey that has taken you around the world.

And we've touched on what that career at Hoards has looked like and the mentors there.

But catch us up to speed, CoBank.com. Talk about being a dairy economist and what that actually looks like for you on a daily basis and the impact that you hope to make in this part of your career, in this chapter of your life, Corey.

I'm going to answer that question in a moment.

It's no secret that farmers are counting every penny these days.

Jackie Fadka, lead economist for farm supply at CoBank, says that one of the big things is knowing the total cost of production that will be even more vital next year and the year after.

I was in front of some growers last week, and one message I always try to communicate with growers, and I know all my ag retailer friends, my co-op agronomists all over, know your cost of production.

From a farmer standpoint, there are very few things as powerful as knowing your cost of production because then you can really understand where you need to, one, maybe cut back, or you maybe have a little opportunity to spend a little more, but then also on executing your marketing plan.