Who profits when you buy ice cream or butter at the store?

This story was originally published on Investigate Midwest.

Nothing beats ice cream on a hot summer afternoon. But while you’re savoring that frozen treat, it’s worth asking: how much of what you paid actually reaches the farmer who produced the milk?

The answer might surprise you: Dairy farmers earn a far smaller share from ice cream than from butter.

That’s because milk undergoes a transformation between the farm and the grocery store, becoming products like ice cream, butter and cheese. Food processors, manufacturers, wholesalers, retailers and food service providers each play a role through marketing, packaging and processing.

These added costs account for a significant portion of what consumers pay at checkout. The “farm share” reflects the farmer’s cut of that final price, a ratio of what they receive for the raw milk compared to what the product sells for in stores, according to data from the USDA’s Economic Research Service Price Spreads from Farm to Consumer data product.

Take ice cream, for example. It’s made by blending milk and cream with other ingredients, such as sugar, egg yolks, and stabilizers, along with additional add-ins like chocolate, vanilla and strawberries.

The complexity of this process adds multiple layers of cost. As a result, in 2024, farmers received just 19% of the retail price of ice cream, according to data from the USDA.

By contrast, butter delivers a much higher return to farmers. Made simply by whisking cream into a product that remains more than 80% milk fat, butter requires far less processing.

That difference matters: in 2024, farmers earned 57% of what consumers paid for butter.

In 2023, the five leading milk-producing states — California, Wisconsin, Idaho, Texas, and New York — accounted for more than half of the nation’s annual milk supply, underscoring their central role in the country’s dairy industry.

This article first appeared on Investigate Midwest and is republished here under a Creative Commons license.