Dairy Skim – June 2023 US Milk Production Report

Dairy Skim is a bite-size episode series where HighGround’s top analysts break down the latest dairy data release. Today, Eric Meyer discusses the June 2023 US Milk Production Report. You can view the snapshot report here. Subscribe so that you never miss an episode!

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[00:04] Eric: Hello, dairy industry! You’ve got Eric Meyer here from HighGround Dairy. It’s Thursday afternoon, July 20th at the time of this Dairy Skim podcast recording and the USDA just dropped the June 2023 US Milk Production Report. Let’s get into it here, shall we?

[00:22] Well, this will be the first year-over-year all-US milk production decline in twelve months—since last June. Milk production came in virtually flat, down a few million pounds so technically slightly below previous year. That was due to a downshift in overall milk cows. We dropped 16,000 head in the all-US and 20,000 head in the 24 top-leading milk states and I think important to note here were some of the state-by-state figures. So, the ones we look at the closest have been California, as well as the Upper Midwest. California coming in down 1.2% versus previous year—believe it or not, that’s actually slightly above our expectations. We’ve been looking for milk production to decline a little bit further in California and we’re hearing starting in July with the heat that it is starting to become a bit more impacted but in June was not the case. Then, Wisconsin and other states throughout the Upper Midwest—Wisconsin was up 1%—fairly expected there.

[01:35] But, where we didn’t see and what we wouldn’t see coming were the two big states in the Southwest: Texas as well as New Mexico. Texas coming in down 5% versus previous year, New Mexico down 7.1%. We saw both pretty significant herd declines from May to June, down 5,000 head in New Mexico and down an additional 10,000 head out of Texas. Now, those herd size declines were somewhat surprising but so were the yield losses year-over-year. Texas down over 3% at 3.1% decline and New Mexico down 2.4%. Of the other top-10 states, the next greatest decline in yield was in California, which was down 1.0%. So, a bit of a decline there in talking to some of our contacts in the Southwest, it sounds like in June, we saw some pretty significant rains that were followed up by some heat and humidity that probably impacted the herd there but certainly, the Southwest really helped drag some of the numbers down here in this market.

[02:50] So, looking at the milk production report here, coming in flat, up 0.2% in the 24-states. HighGround had an initial forecast before the report was released, where we had up 0.5% so slightly bullish on those numbers. We did expect the herd size to decline in the all-US, down about 8,000, coming in down 16,000. The revision, interestingly enough, down 16,000 head in May for the all-US but for the 24-state total, was up 4,000 head. So, interesting numbers there but overall, a slightly bullish, perhaps a little bit early of a decline in the overall milk production, paying focus on the sw with Texas and New Mexico.

Be sure to check out HighGround’s more comprehensive analysis of the Milk Production report published to our market intelligence subscribers later this evening or by early tomorrow morning at the latest. Talk soon!

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