The dairy industry is in a period of economic volatility of historic proportions. An era of modest fluctuation in milk and feed pricing in the late 1990s to the early 2000s was followed by increases in milk prices not seen before. The period of high dairy profitability in early 2008 was soon dampened as the global recession of 2008–2009 led to reduced exports. Since then, milk prices have rebounded and dropped several times. More recently, all-time high US milk prices in 2014 have been followed by 5 years of a severe, industry-wide economic downturn. In mid-2019, it was estimated that >7,000 dairies had closed because of milk prices remaining below the cost of production for too long.
The downturn's causes are numerous, but the essential reason was the result of an excess supply of milk vs demand. Because of dramatic improvements in dairy reproduction, genetics, nutrition, and overall management, milk production has increased significantly. Simultaneously, US milk consumption has continued to decline, and milk exports have fallen dramatically. In March 2015, the EU outlawed milk production quotas that had been limiting production in member states. And in 2017, trade wars with Europe and China led to further reductions in exports. As of 2019, prices began to rebound, perhaps reflecting the effects of the closure of many US dairies.