Rabobank has a report out that paints a very promising future for the dairy business in the U. S. It’s one of their Ag Focus reports called “U.S. Dairy Farming: Facing New Markets and Uses, August 2005.” Here’s the introduction:

The United States dairy sector is entering new markets and product uses as a result of ongoing changes at the demand,production and processing stages. With stocks already at record low levels,world demand for U.S. dairy exports continues to increase, as the supply by traditional exporters is limited and world prices climb higher. Increasing concentration, relocation and larger farms and processors have been ongoing
trends, while the development of the export market, the definite increase in the consumption of cheese, and the resulting decline in the importance of fluid milk in total milk use are reshaping the U.S. dairy sector.

The growth in consumption of dairy products in the U.S.continues to favor cheeses over fluid milk. While per capita consumption of cheese has increased by almost 3 percent per year since 1983, consumption of all fluid milk varieties has declined annually by about 1 percent during the same time period.

You can see the whole report here.