January milk production up by 2.7 percent

Wisconsin State Farmer

Chicago, Ill - Led by huge percentage increases in Texas and New Mexico and more gradual upticks in New York and Michigan, milk production in the United States during January was up by 2.7 percent compared to the month in 2016.

The monthly report by National Agricultural Statistics Service (NASS) released on Tuesday afternoon of this week credited with Texas with a 19.2 percent surge in the comparisons for a total of 995 million pounds in January of this year while New Mexico jumped by 15.3 percent to 679 million pounds for the month.

A combination of increases in average milk per cow and cow numbers accounted for those major jumps in milk production. Average milk per cow in Texas jumped by 180 pounds to 2,015 pounds for January while New Mexico advanced by 190 pounds for a January per cow average of 2,090 pounds. Texas was up by 39,000 cows to 494,000 head while New Mexico was up by 15,000 to 325,000 cows.

State shuffling

With its huge gain compared to a year ago, Texas jumped into 4th place among the states for milk production for January compared to a 6th place a year ago for the month. The two states which it passed during the year are Pennsylvania and Michigan.

In the top 23 milk production states, New York also exceeded the national average increase with its gain of 3.8 percent for a total of 1.261 billion pounds for January. Michigan's production of 927 million pounds for the month was up by 3.5 percent from a year earlier.

Other percentage gains topping the national average for January were 8.5 in Kansas, 6.6 in Colorado, 3.8 in Iowa, and 2.8 in South Dakota. California's production slipped by .6 percent, giving the state a total of 3.413 billion pounds for January.

Wisconsin statistics

Wisconsin trailed the national average with its gain of 1 percent on a total of 2.541 billion pounds of milk for January. With cow numbers remaining at 1.28 million head, the month's gain was due to an average increase of 20 pounds of milk per cow to 1,985 pounds.

This month's report confirmed the Wisconsin State Farmer's earlier indication that the state had topped 30 billion pounds of milk production for the first time ever in one year. The reported total for 2016 is 30.123 billion pounds.

Based on an average daily production of just over 82.3 million pounds per day in the state during 2016, the 30 billion pounds threshold would have been reached even without the inclusion of Leap Day on February 29. The state's total in 2015 was 29.03 billion pounds.

Average milk production per cow in Wisconsin for 2016 was 23,552 pounds – up by 855 pounds from the 22,697 pounds in 2015. If the Leap Day production were taken away, the average annual increase per cow would be about 790 pounds instead.

National records

For the United States, milk production during 2016 was up by 1.8 percent (not discounted for the Leap Day) from 2015 to a record of 212.436 billion pounds. With an average of 9.238 million cows for the year, the average production per cow was up by 378 pounds (316 pounds if discounted for the Leap Day) to 22,774 pounds.

The NASS summary report for 2016 indicated that since 2007 milk production in the United States was up by 14.4 percent, average milk per cow was up by 12.7 percent, and milk cow numbers were up by 1.5 percent.

Spot market setback

Whether in anticipation of the milk production report for January or in reaction to it, the CME Group's spot market prices for dairy commodities fell on Tuesday and Wednesday of this week. The market was closed on Monday in observance of Presidents' Day.

Before the announcement of the milk production data on Tuesday, the Cheddar block cheese price lost 5 cents per pound and Cheese barrels slipped by 2 cents. There were five carload sales of each on Tuesday.

The downward price trend continued on Wednesday with blocks dropping 2 cents and barrels shedding 3 cents, putting the day's closing prices at $1.51 and $1.57 per pound respectively. Four carloads of blocks were sold and a bid for one carload was not filled. There was an uncovered offer to sell one carload each of both blocks and barrels.

AA butter and NFDM

Both AA butter and Grade A non-fat dry milk joined in the price setback in the spot market on Wednesday. Butter lost 2.25 cents to close at $2.1175 per pound after the sale of one carload.

Non-fat dry milk lost .50 cent to drop to 87 cents per pound after being as high as $1.03 at times in the first half of January. One carload was sold on Wednesday, a bid for one carload was not filled, and an offer to sell three carloads was not covered. On Tuesday, a bid for seven carloads was not filled.

Futures markets

In tune with the spot cash markets, Class III milk futures suffered losses of up to 17 cents per hundred for all months through February of 2018 in trading through early afternoon on Wednesday. Most of the traded contracts were for March and April of 2017, which posted respective per hundred losses of 17 and 14 cents.

With one week of trading remaining, the February futures stood at $16.85 per hundred while March was down to $16.40. Prices rise into the lower half of the $17s per hundred for the final six months of 2017 and are holding in the upper half of the $16s per hundred for all months in 2018.

Dry whey futures contracts for March through July of 2017 was transacted on Wednesday at prices in fractions just above 48 cents per pound. The very tight price range continues with lows of 47.4 cents per pound for the latter months of 2017 to prices just above 49 cents for the first half of 2018.

On Tuesday of this week, Cooperatives Working Together announced the receipt of bids for financial assistance on six contracts to export 1.347 million pounds of Cheddar cheese to buyers in Asia and Oceania for deliveries to be completed by May.

January milk production is up by 2.7 percent.