August 25, 2014
US milk output sees 4% rise in July 2014
With a 4% rise in output during July 2014 compared to the previous period, US milk production continues to perform positively, reaching 7.7 billion litres.
Conditions have largely been beneficial for US production; US wholesale prices (up to July 14) did not experience the same levels of downward pressure as wholesale prices in other regions. This, combined with a reduction in feed costs, means that the milk to feed price ratio has been favourable to local farmers, increasing circa 60% between July 2013 and 2014.
However, according to DairyCo, with the level of uncertainty in the market increasing in recent months, it is still uncertain how long US production can keep the pace. Production for April-July 2014 is currently 675 million litres (2%) more than 2013, at 31 billion litres.
DairyCo also points out that the outlook for feed grain and oilseed prices is quite bearish, and the development may lead to reductions in feed costs in the future.
On the other hand, Russia's recent sanctions on Western nations is impacting on an already uncertain global market, which may translate through to US wholesale prices.