Dairy Skim is a bite-size episode series where HighGround’s top analysts break down the latest dairy data release. Today, Betty Berning discusses the July 2024 US Milk Production Report. Customers can view the snapshot report here. Subscribe so that you never miss an episode!
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Transcript:
(0:14) Betty Berning:
Hello everyone, and welcome back to the Dairy Skim, HighGround Dairy’s bite-sized podcast intended to give the dairy industry some flavor into recent reports or events that can impact global commodity pricing. This is Betty Burning, HighGround’s Contributing Dairy Economist. USDA released July’s Milk Production Report this afternoon and it was bullish to our expectations.
(0:40)
The biggest storyline of this report were the massive revisions to June’s milk volumes. USDA lowered June’s production figures by 137 million pounds. That’s a revision of 0.7% and it drops June’s total to a 1.7% decrease year-over-year. This is the largest year-on-year drop in milk production since 2004, so over 20 years ago. So just really a massive revision and a massive decrease as well. So what changed? First of all, cow numbers were slashed by 15,000 head, lowering the monthly total to 9.32 million cows and that matches the lowest mark for the US herd since August 2019. Cows were taken out of the herd in, get ready for the list, Arizona, California, Colorado, Idaho, Iowa, Michigan, Minnesota, Ohio, Oregon, and Wisconsin. I think that was alphabetical order.
(1:48)
All right, what else happened? Well, milk per cow in June was also lowered. USDA took that down by 11 pounds, which was a decrease of 0.5% of actual, and some states’ figures were revised sizably lower. For example, Colorado’s yields were dropped by 45 pounds, which is a 2.1% decrease from the original print. Idaho’s yields were taken down by 35 pounds, a 1.6% decline, and Iowa’s yields dropped 50 pounds, a 2.4% decrease. So if we think about those places, Colorado, Idaho, and Iowa, they’ve been impacted by bird flu. So it’s not entirely surprising to see milk per cow taken lower. We know that lower milk production is a symptom of the disease.
(2:39)
However, in another place with bird flu, where I live, Minnesota, milk per cow was only taken down 20 pounds, and that’s about a 1% change. So not as sizable as those other places. And in two places where bird flu has not been reported at all, Indiana and Wisconsin, yields were dropped pretty significantly too. They were taken down 30 pounds per cow in Indiana and 25 pounds in Wisconsin. So it’s a little puzzling. And then let’s talk about Texas for a second, shall we? Texas was the first place where bird flu was reported, and no revision to milk per cow in June.
(3:19)
We talked as a team about these numbers. It’s all a little puzzling. We are doing our best to sort it out. What I can say is that industry chatter is that bird flu may be in more states than reported, and not all farms that have it are reporting it for a bunch of different reasons. So that’s likely driving some of these various revisions. And also remember, it is summertime, so it’s not surprising to see milk yields fall on hot weather, which we’ve had in June and July.
(3:49)
Let’s talk about July, though. That was the title of the report, July’s Milk Production. Total milk production in July dropped 0.4% versus July 2023, weighing in at 18.3 billion pounds. This is the lowest figure for the month since 2020. From June to July, though, milk cows grew by 5,000 head to 9.325 million. And that’s a counter-seasonal move. Typically, you see cow numbers drop in the summertime. However, as we dug into the numbers, what we found was Texas increased its herd size by 5,000 cows from June to July. And that makes a lot of sense, because there’s a lot of new capacity coming online there.
(4:36)
Milk per cow in July sat at 1,963 pounds, and it bested prior year by one pound. Remember, it’s summer and it’s hot, so milk flows are certainly impacted in some regions of the country. I want to talk about just a couple of states and interesting points, too, from July’s data and kind of the year-to-date data. Wisconsin, our number two dairy state in the US, milk production had been increasing from January to May while the nation’s milk flows were slowing. Wisconsin has now logged two consecutive months of year-on-year decreases, with milk volumes peaking in May of this year as opposed to the normal peak of June. And like I said, so far no reported cases of bird flu there. Doesn’t mean it might not be present, though.
(5:23)
Colorado has also seen milk production really tail off. It has one of the most intensive testing protocols for bird flu in the country, and that may be impacting the numbers there and why we’re really seeing it just tail off. In July, it posted the lowest milk volumes for the month since 2019. And I also wanted to shout out Minnesota. Minnesota posted a really poor July number, too. Lowest July since 2020. And if you look at the milk production graph, you can see that volumes have been plummeting.
(5:55)
Okay, states that grew milk production included, this is not an alphabetical order, Texas, Kansas, South Dakota, Washington, Ohio, and Florida. And the growth in the Southern Plains, like I’ve already alluded to, not really surprising. There was some new capacity added last year and more new plants coming online later this year and into early 2025. South Dakota’s increases are expected, too, just due to ongoing growth in the I-29 corridor in that region of the world.
I actually have even more to say, if you can believe that. This is one of the most interesting reports I’ve analyzed. So, subscribers, stay tuned. You can get the rest of my thoughts in our published report. Watch your inbox. And everybody, have a great night and take care. Cheers.
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