Dairy Skim – February 2023 US Milk Production Report

Dairy Skim is a bite-size episode series where HighGround’s Eric Meyer and Betty Berning break down the latest USDA Dairy data release, the February 2023 US Milk Production Report. You can view the snapshot report here. Subscribe so that you never miss an episode!

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[00:05] Eric: Good afternoon, everyone, and welcome to the HighGround Dairy Skim, a bite-sized recap and analysis for our subscribers of one of the dairy industry’s major reports. This is Eric Meyer, President of HighGround Dairy and joining me is Betty Berning, our Contributing Dairy Economist.

We are recording this podcast on Monday afternoon, March 20th, and we have been busy reviewing the US February 2023 Milk Production report USDA just released. The annual growth across the entire US was up 0.8% with the top 24 states coming in at 1.0%. The growth was equally attributed to both the size of the US milking herd and the output per cow from the previous year. I think we were somewhat surprised by both figures, to be honest.

Betty, what were a few key data points that caught your eye in the February report?

[00:57] Betty: Thanks, Eric. Yes, I was surprised by the growth in the US herd, with farmers adding 12,000 cows from January to February, and since December, 21,000 head have been added. With the high cull rates since the start of 2023, HighGround certainly did not anticipate that cow numbers would increase this much. Notably, Idaho and Texas cow numbers rose by 3,000 and 5,000 head from January, respectively.

[01:28] Eric: I thought something else that was interesting to look at, although not the top top states—there certainly seems to be a pivot between Florida and Georgia. We’ve seen Florida lose 14,000 head over the past year while Georgia has added 5,000. We’ve seen a number of months in a row with Florida losing double digits percentage growth while Georgia continues to add. So, an interesting movement there and we will certainly get to more of the state-by-state comments in our written commentary which will be released later. Betty, what else did you see?

[01:59] Betty: Well, milk per cow was also sluggish, growing a modest 0.4%, which was the smallest increase since December 2022, and prior to that May 2022. In the Midwest, where Spot milk has been greatly discounted this winter and at 5-year lows, Wisconsin milk yields only increased a half percent. Overall, the state’s milk volumes were almost flat, up just 0.3%. This suggests the discounted milk in the Upper Midwest may be due to plants not running at full capacity, likely due to weak demand and staffing issues. Fluid milk demand has also been down and it’s possible those plants aren’t running optimally, so that could be a lot of excess that’s happening in the region as well. California, the number one dairy state, saw its milk per cow fall on an annual basis by 1% and that could be related to heard health with all of the rain that they’ve gotten over this winter, particularly at the end of January and we are now looking at February’s data.

[03:06] The other interesting takeaway from the report was that USDA also revised its January milk production up slightly. This was the first positive revision since July 2022.

[03:21] Eric: Thanks, Betty. HighGround will be putting together our comprehensive written analysis later this afternoon and evening, having it in have in our subscribers’ email inboxes by tomorrow morning. Thanks for listening and our next podcast this week will be a brief review of the GDT Analysis with myself and Stu Davison. Have a great day!

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