Dairy Skim is a bite-size episode series where HighGround’s Eric Meyer breaks down the latest USDA Dairy data release, the January 2023 U.S. Dairy Milk Production Report. You can view the snapshot report here. Subscribe so that you never miss an episode!
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[00:04] Eric: Hello everyone and welcome to the Dairy Skim. This is Eric Meyer, President of HighGround Dairy and I’m joined by Cara Murphy, Market Intelligence Manager, and we are here to give you a quick take on the recently released USDA January 2023 Milk Production Report. January reports provide the USDA an opportunity to provide annual revisions and the government went into the way-back machine and even touched up their 2021 figures. Cara, what can you tell us by way of these annual revisions?
[00:36] Cara: Well, US Milk Production in 2021 was revised 35 million pounds higher and for 2022, the significant 158 million pound downward revision. Much of those revisions were in the back half of the year which took YOY growth to just a 0.7% increase which was down from around 0.2% growth one month ago when the numbers were first published. This is now the fourth month in a row that the USDA revised the original figures lower.
[01:04] Eric: Yup, there’s a clear trend that has been established. Whereas during the first nine months of 2022, USDA was quite inconsistent with their revisions. In this month’s report, USDA took their all-US number down 30 million pounds for a 0.2% decline, which took the all-US YOY growth figure from 0.8% down to 0.6%. While 24-state milk cows were left unchanged in December, the government did knock the all-US milking herd down 4,000 head. Now while the overall 1.3% increase in January all-US milk production and 1.5% YOY gain in the 24-state output was fairly neutral. There were a couple of surprises within the report. Cara, what did you see within the data?
[01:53] Cara: For me, the surprise was really the larger milk cow numbers, up 9,000 head from December, which is surprising because of the heavy culling in January. This is suggestive that farmers already had more cows prepped in the milking cycle for Q1. While a surprise today—and perhaps maintained throughout Q1—this is not necessarily a sign that the US herd has more growth in it but Q1 may be a little bit better than originally anticipated.
The strongest YOY milk cow growth on a per-pound basis was in September but against a poor comparable in January 2022 was also surprising. Also, the 1.3% YOY growth was the best percentage gain since August 2022.
[02:31] Eric: Looking briefly at individual states, California was flat versus prior year, which was its best performance since September. A number of states came in out-performing on a YOY basis percentage-wise—specifically states in the Upper Midwest—showed resistance in growth versus prior year, though a lot of that may have to do with the mild winter weather across much of the US this past month.
Lastly, notable herd changes from the prior month. Idaho and New Mexico were moved up 3,000 head from December. Iowa up 2,000 head while Colorado saw a 2,000 head decline.
Well, that does it from here. We are going to take an even closer look under the hood on this data later this afternoon and into the evening to provide you with a comprehensive written take on what this may or may not mean to the current state of US dairy (view that report here). There’s no rest for the weary this week as New Zealand export data has just been released for January. We are expecting China import data very soon for January and this Friday afternoon, USDA will release the Cold Storage Report, which will provide January ending stock data for both cheese and butter. Thanks for joining us and we will be back with you soon!
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