Western areas have had lower average costs of milk production for a variety of organizational and climatic reasons. Most dairy cows in the U.S. are Holsteins, a breed that tends to produce more milk per cow than other breeds. The composition of Holstein milk in approximate terms is 87.7 percent water, 3.7 percent milkfat, and 8.6 percent skim solids. These farmers typically belong to producer-owned cooperatives . The cooperatives assemble members' milk and move it to processors and manufacturers.
Some cooperatives operate their own processing and manufacturing plants.
Initially local, many of today's dairy cooperatives are national with members scattered across the country. However, only about one-third of the milk is actually processed into fluid milk and cream products . In 1999, about 420 plants produced these products. Fluid milk processors face a unique supply-demand situation not associated with most other food products. Farm milk production varies by day, week, and season because of weather and feed conditions.