From fluid milk sales to global trade, here are the issues that could affect your dairy's bottom line.

Lee karen
Karen Lee
Managing Editor / Progressive Dairy

April fluid milk sales up 1.5% from last year

Fluid milk sales for 2024 are slightly higher than last year’s sales. According to data from the USDA Agricultural Marketing Service:

  • Total sales: April sales of packaged fluid milk products were estimated at 3.6 billion pounds, up 5.9% from the same month a year earlier. At 14.5 billion pounds, year-to-date sales of all fluid products were up 1.5%.
  • Conventional products: Monthly sales totaled 3.35 billion pounds, up 5.3% from the same month a year earlier. Flavored fat-reduced milk and low-fat (1%) milk were both up over 8% compared to April 2023. Year-to-date 2024 sales were estimated at 13.53 billion pounds, up 1.2 % from this time last year. Flavored whole milk sales continue to be up 9.3% at 245 million pounds thus far this year.
  • Organic products: April sales totaled 251 million pounds, up 14.6% from a year earlier. Flavored whole milk and flavored fat-reduced milk increased by over 80% from the month before. Organic represented about 7% total fluid product sales in April and year to date.

The U.S. figures are based on consumption of fluid milk products in Federal Milk Marketing Order (FMMO) areas, which account for approximately 92% of total U.S. fluid milk sales, and adding the other 8% from outside FMMO-regulated areas. Sales outlets include food stores, convenience stores, warehouse stores/wholesale clubs, nonfood stores, schools, the food service industry and home delivery.

Vitaliano: Fluid milk sales and cheese exports surge amid production decline

U.S. fluid milk sales are up by almost 100 million pounds over a year ago on a leap year-adjusted basis, according to National Milk Producers Federation’s Peter Vitaliano. Summarizing dairy markets in the June 2024 Dairy Management Inc./National Milk Producers Federation Dairy Market Report, he said the 0.7% increase in fluid milk while consumption of most other major dairy products was lower is a change in usual domestic consumption patterns.

Cheese exports reached an all-time high with the U.S. exporting 8.7% of its total cheese production during February-April. This comes as April U.S. milk production falls below year-ago milk production, on a leap year-adjusted basis, for the tenth consecutive month.

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Rapid increases in the price of cheese during May largely powered a $3.05 per hundredweight (cwt) jump in the May Class III price from the month before.

For more information on commercial use, dairy trade, milk production, product inventories, prices and margins, view the June 2024 Dairy Market Report.

Rabobank: China’s increased dairy self-sufficiency to reshuffle global dairy trade

A recent report from Rabobank looks at China’s growth in dairy and its impact on the global dairy sector.

From 2018 to 2023, China is achieving more self-sufficiency in milk production with 11 million metric tons (24.3 billion pounds) and decreasing the amount of whole milk powder it is importing.

New Zealand, the primary dairy exporter to China, is now compelled to seek out alternative markets for the milk equivalent of nearly 150,000 metric tons (330 million pounds) of whole milk powder.

Mary Ledman, global strategist for dairy at Rabobank, describes the global dairy sector as a row of dominoes, with China’s demand representing the first domino, followed by New Zealand’s supply, and finally a key commodity: whole milk powder. “If China’s demand falls, it triggers a chain reaction, causing each subsequent domino to topple. This has inevitably intensified competition among the existing dairy-exporting regions and led to lower-than-average global milk powder prices,” Ledman says.

GDT index slightly lower

The price index of dairy product prices sold on the Global Dairy Trade (GDT) platform is down 0.5% in an auction held June 18. Compared to the previous auction, prices for individual product categories were mixed. Butter increased 6.2%, while lactose and skim milk powder were up 1.9% and 0.7%, respectively. Decreases of 2.5% or less were seen in whole milk powder, anhydrous milkfat and cheddar cheese. No sales occurred for mozzarella or butter milk powder.

The GDT platform offers dairy products from several global companies: Fonterra (New Zealand), Darigold, Valley Milk and Dairy America (U.S.), Arla (Denmark), Arla Foods Ingredients (Denmark) BMI (Germany), Kerry Dairy (Ireland) and Solarec (Belgium).

The next GDT auction is July 2.

AFBF: Agricultural trade deficit forecast to grow

U.S. agricultural trade has had decades of surplus; however, the past two years have been a trade deficit. For fiscal year 2024 (October 2023 – September 2024), USDA’s Economic Research Service estimates that there will be a record $32 billion agricultural trade deficit. This follows the current record deficit of $16.7 billion set in fiscal year 2023 and would be only the fourth agricultural trade deficit in the last 50 years.

American Farm Bureau Federation (AFBF) Economist Betty Resnick explains that horticultural products, such as fresh fruits and vegetables, have the largest trade deficit due to rising consumer demand and declining U.S. production due in part to labor issues.

Falling commodity prices and the strong U.S. dollar have contributed to the decline of the value of U.S. exports in the past few years.

Resnick shares more about this trend in the AFBF Market Intel report.

Saputo to close four U.S. cheese plants

In releasing its fourth quarter and fiscal year 2024 results, Canadian dairy manufacturer Saputo Inc. revealed it plans to close four facilities in the U.S. over its next fiscal year.

The company is focused on completing a cheese network transformation, which means closing facilities in Lancaster, Wisconsin; Big Stone, South Dakota; Green Bay, Wisconsin; and South Gate, California, while continuing to ramp up its new automated cut-and-wrap facility in Franklin, Wisconsin.

Saputo also intends to strengthen the innovation pipeline in the U.S. by developing new products and continuing to grow brands while expanding volume with key customers.

Revenues for Saputo’s fourth quarter (January-March 2024) amounted to $4.545 billion (CDN), up $77 million (CDN).

“We delivered a solid performance in the fourth quarter, despite a negative 61 million dollar impact from USA market factors and 15 million dollars of duplicate operational costs in our USA Sector,” said Lino A. Saputo, chair of the board, president and chief executive officer.

Looking ahead, Saputo is optimistic. He added, “We have already started to see the benefits in our results from our major capital projects, and we expect for them to increase through FY25 and accelerate in FY26.”

Michigan offers HPAI financial assistance to dairy farms for HPAI research

The Michigan Department of Agriculture and Rural Development (MDARD) Director Tim Boring announced immediate financial assistance for Michigan dairy farms impacted by highly pathogenic avian influenza (HPAI) to help advance research on the disease toward aiding farms in recovery. Funding is available for up to 20 farms, up to $28,000 per farm. This assistance is in addition to funding already available from the USDA to HPAI-impacted dairy farms in Michigan.

Eligible farms must work with MDARD and the USDA’s Animal and Plant Health Inspection Service’s Veterinary Services (APHIS) to complete epidemiological investigations on their farms, participate in dairy herd real-time longitudinal studies research with MDARD and Michigan State University, and engage in HPAI A(H5N1) programs related to the Michigan Department of Health and Human Services (MDHHS) if applicable. This funding is made available through MDARD’s Emergency Response programming.

FSA seeking county committee nominations

Nominations are now being accepted for farmers and ranchers to serve on local USDA Farm Service Agency (FSA) county committees. These committees make important decisions about how federal farm programs are administered locally.

Nationwide, more than 7,700 dedicated members of the agricultural community serve on FSA county committees. The committees are made up of three to 11 members who serve three-year terms. Committee members are vital to how FSA carries out disaster recovery, conservation, commodity and price support programs, as well as making decisions on county office employment and other agricultural issues.

Customers can contact their local FSA office to determine if their local administrative area is up for election.

Individuals may nominate themselves or others, and qualifying organizations may also nominate candidates. The USDA encourages minority, women, urban and beginning farmers or ranchers to nominate, vote and hold office.

All nomination forms for the 2024 election must be postmarked or received in the local USDA Service Center by the Aug.1 deadline. Election ballots will be mailed to eligible voters in November 2024.

More information is available at the FSA county committee election website.       

$50 million awarded by USDA for farmworker support

The USDA is awarding $50 million to 141 awardees in 40 states and Puerto Rico, through the Farm Labor Stabilization and Protection Pilot Program (FLSP Program), reaching 177 unique agricultural operations and over 11,000 workers. The awards will address agriculture labor challenges and instability, strengthen protections for farmworkers and expand legal pathways for labor migration. This program delivers on a commitment made as part of the Los Angeles Declaration on Migration and Protection and furthers the administration’s commitment to a regional approach to migration in the hemisphere.

“These awards will largely support small and midsized farms to ensure they can hire and retain the workers they need to be competitive in the market, while also lifting up rural communities across the country,” said Secretary of Agriculture Tom Vilsack. “Improving working conditions and quality of life for farmworkers, both U.S.-based workers and those that come to our country to work, is one key step in building a stronger, more resilient food supply chain.”

The USDA announced the FLSP Program in September 2023, in coordination with other federal agencies, to help address workforce needs in agriculture; promote a safe and healthy work environment, as well as ethical recruitment for farmworkers; and support lawful migration pathways for workers, including expansion of labor pathways for workers from northern Central America, through the H-2A visa program.