December 26, 2013
US milk production, cow population down in November
In November, US milk cow numbers were down again, as well as milk production also down from October and about flat compared with November 2012.
With rising milk prices and declining feed costs, analysts are still waiting for the expected increase in cow numbers and milk production.
Despite rising milk prices, lower feed costs and strong international demand for milk and dairy products, US milk cow numbers declined for the fourth straight month in November, down 5,000 head from October.
Cow numbers declined 2,000 head in October, 27,000 head in September and 10,000 head in August from the previous month.
Also in November, milk per cow also declined nationwide, down 46 pounds from October and up one pound from November. Total milk production at just over 16 billion pounds was down about 2.6% from October and only 0.1% higher than November 2012.
Rapidly rising milk prices are sending a clear signal to the US dairy industry that the world needs more milk, however, US dairy producers have yet to react to this "call to action," HighGround Dairy analysts commented in their report.
Analysts have been forecasting an increase in cow numbers for the last two months, since USDA-NASS resumed its reporting of those numbers, but it has yet to happen. US cow numbers have declined 44,000 head since July, and November''s cow count is 3,000 head less than November 2012.
Cow numbers were down over-year in eight of the 23 reported milk-producing states in November, milk per cow was down in 11 states and milk production was down in 10 states.
The West saw over-year declines in milk production in Idaho, down 1.8%, and New Mexico, down 0.8%. Those declines were due to fewer cows and less milk per cow. Both states are down 7% in milk production year to date.
The Upper Midwest also saw declines in its big cheese states of Wisconsin, down 0.6%, and Minnesota, down 1.9%. That decline in milk production was due to less milk per cow. Those states were hit with substantial winterkill of alfalfa and a wet, early summer followed by summer drought that first curtailed alfalfa harvest and later reduced hay yields, said Bob Cropp, professor emeritus, University of Wisconsin, in his Dairy Situation and Outlook report released this morning.
The relatively small over-year increase in milk production in November, the seasonal good demand for cheese and butter and very strong dairy exports are resulting in higher prices for dairy products and farmers, he said.
High product prices will result in a December Class III milk price near US$19 per hundredweight and a Class IV price near US$21.50. For 2013, the Class III price could average US$0.55 higher than 2012, Class IV could average US$3 higher and the all-milk price could average US$1.45 higher, he said.
For the first quarter of 2014, the Class III price could average near US$18.25 and Class IV could average about US$21.35. For the second quarter, those prices could average in the high US$17s and the low US$20s, respectively, he said.
Even with an expected increase in cow numbers, milk per cow and milk production due to higher milk prices and lower feed costs, the average all-milk price for 2014 should drop no more than US$0.50 from the 2013 expected average of US$19.95, he said.