Despite relatively strong milk production, increasing stocks of dairy products and weak exports, domestic foodservice sales helped boost dairy product prices in June. If those prices hold, farm milk prices for the remainder of 2016 could be stronger than previous forecasts, according to Bob Cropp, professor emeritus with the University of Wisconsin-Extension.
May milk production
Cow numbers leveled off, helping limit year-over-year milk production gains, according to USDA’s monthly milk production report, released June 21.
Nationally, May 2016 milk production was estimated at 18.645 billion pounds, up 1.2 percent from May 2015. Milk cow numbers were estimated at 9.327 million head, 3,000 head more than May 2015, but unchanged from revised April 2016 estimates. Production per cow averaged 1,999 pounds for May, 23 pounds more than May 2015.
May 2016 milk production in the 23 major dairy states was estimated at 17.450 billion pounds, up 1.2 percent from May 2015. Cow numbers in those states were estimated at 8.644 million head, 11,000 head more than May 2015, but unchanged from revised April 2016 estimates. Production per cow averaged 2,019 pounds for May, 21 pounds more than May 2015 and the highest production per cow for the month of May since the 23-state series began in 2003.
South Dakota again topped the list for largest year-over-year gain in milk production, at 9.5 percent, followed by Michigan, up 6.9 percent. New York, Wisconsin and Colorado also posted gains of at least 4 percent.
Milk production in Utah (-4.6 percent), New Mexico and Virginia (each -3.8 percent), Florida (-2.9 percent) and California (-2.8 percent) saw the largest declines, with fewer cows the predominant factor. New Mexico cow numbers were down 13,000 from the year before; California was down 6,000.
Year-over-year growth in cow numbers was largest in Michigan (+11,000), South Dakota (+9,000), Idaho (+5,000) and Colorado (+4,000).
Compared to April 2016, cow numbers were mostly unchanged, with only Texas (+2,000) and Michigan (+1,000) reporting gains.
USDA lowered previous national and 23-state cow number estimates for April, each down 4,000. With those revisions, cow numbers are unchanged for a third consecutive month.
Cows in Michigan, New York and Wisconsin averaged 85 to 90 pounds more milk compared to the same month a year earlier, with California, Utah, Virginia and Florida down 25 to 50 pounds per cow compared to May 2015.
Price outlook
Whether dairy product prices hold or improve will depend a lot upon the level of milk production, Cropp said. Butter and cheese sales are expected to remain strong. Weather forecasts show a high probability of hot temperatures and dry conditions for the Central, Midwest and Northeast regions, potentially reducing milk per cow and negatively impacting milk components.
Higher milk prices will be needed to offset any weather-related increases in corn, soybean and hay prices, Cropp said.
Read the USDA Milk Production report. PD
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