Upper Midwest boosts milk production

Ray Mueller
Now Media Group


The milk production report for January issued on Friday, Feb. 19 continued to show a major difference in trends based on the geographic area.

States in the Upper Midwest and to the east once again posted noticeable increases when compared to January of 2015 but those in the South and on the West Coast had production setbacks or minimal increases.

Another state record

Wisconsin continued its run of new monthly milk production record high totals with 2.509 billion pounds in January. This was a 4.1 percent or 99 million pound increase from January of 2015.

The state's average milk per cow for the month jumped by 70 pounds to 1,960 pounds for January of this year. The reported estimate of 1.28 million dairy cows was up by 5,000 from a year earlier.

Other January milk production increases included 5.9 percent to 896 million pounds in Michigan, 3.4 percent to 830 million pounds in Minnesota, 4.1 percent to 1.221 billion pounds in New York, 2.9 percent to 352 million pounds in Indiana, and 12.2 percent to 211 million pounds in South Dakota.

Regional downturns

Despite those higher numbers in several major milk production states, the nation's increase in the January comparison was only .3 percent. The United States total was 17.73 billion pounds — an average of 1,904 pounds from 9.317 million dairy cows.

California continued to have the greatest reduction in volume with its 2.7 percent or 96 million pound decrease in January to a total of 3.435 billion pounds. The average milk per cow in the state for the month was down by 50 pounds to 1,935 but the number of dairy cows was down by only 4,000 from a year ago to 1.775 million.

Effects of the late December snowstorm that struck the concentrated dairy regions in western Texas and eastern New Mexico were evident in the numbers reported for January. Cow numbers were down by 15,000 to 455,000 in Texas and by 13,000 to 310,000 in New Mexico.

Compared to January of 2015, milk production in Texas was down by 6.7 percent or 60 million pounds to 835 million and by 12 percent or 80 million pounds to 589 million in New Mexico. Average milk per cow for January plunged by 170 pounds to 1,900 iin New Mexico and by 70 pounds to 1,835 in Texas.

2015 production records

National milk production for 2015 hit a record of 208.633 billion pounds, which was a 1.3 percent increase from 2014. The average milk production of 22,393 pounds from the calculated monthly average of 9.317 million cows was an increase of 134 pounds from 2014. The report noted that average milk per cow has increased by 12.6 percent since 2006.

Another report indicated a monthly average of 43,584 dairy farms licensed to ship milk into the commercial market in the United States during 2015. That was down by 1,725 from 2014.

In Wisconsin, the 2015 monthly average was 9,900 licensed dairy farms — down by 390 from 2014 — but the total at the beginning of 2016 was 9,695. California had a monthly average of 1,465 licensed dairy farms in 2015 — down by 20 from 2014.

Cheese production in the United States during 2015 was a record high of 11.721 billion pounds — an increase of 2.4 percent or 271.6 million pounds from 2014. Wisconsin's share of that production was a record high of 3.038 billion pounds — up by 4.4 percent or 127.5 million pounds from 2014.

Current cash markets

In the wake of those production records, dairy market prices stand at five-year lows for both commodities on the Chicago Mercantile Exchange spot markets and on futures contracts for Class III milk and dry whey. That trend continued on Wednesday of this week.

With an 8.5 cent drop, AA butter closed the trading day at $2 per pound after a session with eight carload sales, an unfilled bid to buy one carload, and an uncovered offer to sell one carload. Grade A non-fat dry milk, however, tacked on a .25-cent gain to close at 74.75 cents per pound following a trading day with two carload sales, an unfilled bid to buy two carloads, and an uncovered offer to sell one carload.

Cheddar cheese barrels lost 3.25 cents to close at $1.4050 per pound on Wednesday as the result of an uncovered offer to sell one carload. Cheddar cheese blocks slipped by .50-cent to $1.45 per pound during a market session with one carload sale and an uncovered offer to sell one carload.

Futures markets slide

Double digit per hundred setbacks in the Class III milk futures were on the trading board for every month from March 2016 through February of 2017 during the early afternoon on Wednesday.

After the $13.81 futures price with no change for February, prices were pushed lower into the $13s through June of 2016 and back into the $14s per hundred for July through September. They then rise into the $15s for all subsequent months through January of 2018.

Dry whey futures prices were also in red ink territory for nearby months on Wednesday. The lowest price on the trading board was 23.6 cents per pound for March while the highest for any month through February of 2018 was the 30.5 cents per pound for February of 2017.

Export report

On Tuesday of this week, Cooperatives Working Together announced requests from Dairy Farmers of America, the Michigan Milk Producers Association, Northwest Dairy Association (Darigold), and Tillamook Country Creamery of Oregon for financial assistance on 12 contracts to export dairy products.

Those contracts involve a total of 1.483 million pounds of Cheddar/Colby, Gouda, and Monterey Jack cheese, 352,740 pounds of whole milk powder, and 220,462 pounds of butter. Buyers in Asia, Central America, the Middle East, and South America can receive deliveries until August of this year to conform to the rules allowing the suppliers to obtain the financial assistance.

During 2015, the $5.241 billion value of dairy exports by the United States was a decrease of 26 percent or $1.86 billion from 2014. Mexico was the top importer.

In contrast, the value of dairy product imports by the United States hit a record high of $3.012 billion during 2015 – up by 1 percent from 2014. Top sources by volume for imported cheese were Italy, France, the Netherlands, New Zealand, Spain, Lithuania, Germany, Switzerland, the United Kingdom, and Ireland.