New analysis from the American Farm Bureau Federation (AFBF) shows allowing whole milk in schools could provide a boost to the farm economy.

More than a decade after whole milk was removed from school cafeterias, Congress is reconsidering whether students should have the freedom to enjoy it and its many nutrients. The Whole Milk for Healthy Kids Act would overturn the U.S. Department of Agriculture’s 2012 restrictions that have limited schools to providing only fat-free or 1% milk.

The proposal, which aligns with recommendations from the Make America Healthy Again Commission, comes as policymakers, farmers and processors look to revitalize a category that has steadily lost market share and reconnect children to the benefits and taste of milk.

Behind the policy debate lies a broader market story: U.S. milk production is on pace to reach a record high in 2025 even as fluid consumption continues to decline. Allowing whole milk back into schools could provide a small but meaningful outlet for butterfat, a key driver of farm milk value, while giving local dairies new opportunities to serve their communities.

Much noted school milk accounts for almost 8% of fluid milk demand, so it’s a significant market driver.

“There were 4.86 billion school meals served in 2024, and 85% of students grab milk. Skim milk has no grams of fat, and 1% has about 2.5 grams of fat. So, if we switch to 2% and whole milk, that would increase 5.5 to 8 grams of butter fat per serving to each of those kids,” he said. “That would boost up returns for dairy farmers, because of that higher value fluid milk market.”

The benefits don’t stop at the farm gate as nutrition science proves whole milk and 2% milk provide benefits to kids.

“Whole milk is creamier, has better flavor, and it helps them feel full and cuts waste. It delivers 13 essential nutrients that support healthy growth and lifestyles,” Munch said. “You also have benefits on the farmer side, too. Local dairies that don’t have costly separators to remove butter fat can now have access to the school system.”

Read more on AFBF’s analysis in this Market Intel report.