USDA reports slight decrease in U.S. milk production

USA – The latest USDA Milk Production report for May 2024 has revealed a modest year-over-year decrease of 0.2% in milk output across the 24 major states in April.

March’s milk production was revised down by 0.5%, totalling 18.9 billion pounds compared to March 2023. Despite the overall decline, per cow milk production in April increased slightly, averaging 2,064 pounds, 8 pounds more than April 2023.

However, the total number of milk cows has decreased to 8.89 million, down by 55,000 from the previous year and 6,000 fewer than in March 2024.

Phil Plourd, president of Ever.Ag Insights noted that while the results were better than anticipated, the dairy industry is still in a contraction phase.

“The key moving forward will be whether the improving margins will encourage farmers to boost milk production as we approach the end of the year and look ahead to 2025,” Plourd stated.

At the High Plains Dairy Conference in Amarillo, Texas, Lucas Fuess, senior dairy analyst at RaboResearch Food & Agribusiness, discussed structural challenges in the dairy sector.

He pointed out that the number of replacement heifers and milking herd figures are at their lowest in over four years, indicating limited capacity to increase cow numbers even if profits rise.

Regionally, South Dakota experienced a significant year-over-year increase in milk production of 12.3%, adding 118,000 cows over the past 12 years. Conversely, New Mexico saw the most substantial decline, with a 17.3% drop in milk production compared to last year.

In the dairy product market, retail butter demand remained strong nationwide, and food service demand is steady. Cream availability is tightening somewhat, but it is generally available.

Butter production varies from steady to strong, with manufacturers building stock ahead of planned downtime in June. Unsalted bulk butter remained tighter than other types, with bulk butter overages ranging from 2 to 10 cents above the market across all regions.

Cheese production was reported to be steadily stronger across the U.S., with farm-level milk production remaining robust in the East. Cheese demand is steady to strong, particularly in retail.

In the Central region, cheese plants have shifted to six-day work weeks due to busy schedules. Western cheese production is also steady, with some plants bringing in additional spot milk loads, although Class III spot milk load availability is tightening in certain areas.

Nationally, milk production follows seasonal trends, with production steady to slowing in hotter, drier states like Texas and California.

In contrast, production is strengthening in the Pacific Northwest and mountain states like Idaho, Utah, and Colorado. The Midwest and East are seeing generally steady milk output.

Low/medium heat nonfat dry milk (NDM) prices are rising due to increased domestic and export demand. With seasonally declining milk availability and strong cheese demand, more NDM is expected to move to cheese vats in the Midwest.

High-heat NDM prices are mixed, with some Western manufacturers producing high-heat NDM only at customer requests. Dry buttermilk prices are mixed, while dry whole milk prices rose due to tight inventories.

Dry whey prices remain steady in the East and are steady to lower in the West and Midwest, with demand nearing seasonal lows. Lactose prices are steady to slightly higher, driven by strong domestic and export demand. Export loads are offered at competitive prices to maintain market share.

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