Dairy Skim – August 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, Betty Berning discusses the August 2023 US Milk Production Report. Customers can view the snapshot report here. Subscribe so that you never miss an episode!

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Transcription:

[00:05] Betty: 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 Berning, Contributing Dairy Economist at HighGround Dairy. USDA released August Milk Production this afternoon, and I am very excited to give you all of the highlights.

[00:30] In August, milk production across all 50 states decreased by 0.2% versus August 2022 as cow numbers totaled 9.39 million cows, unchanged from July (and I’ll tell you more about the July numbers in a minute), and milk per cow fell just 1 pound from prior year levels.

[00:54] Production in the West brought the number down, with California, Colorado, New Mexico, Texas, and Oregon logging 3% or greater year-on-year declines. Of that group, yields in California and New Mexico suffered the most, down a respective 65 and 45 pounds. While the yield losses are sizable from a historical standpoint, they’re not as steep as they were in July. In Colorado, Texas, and Oregon, it was a smaller herd that really drove the decline in year-over-year milk production.

[01:31] In the Midwest and Northern Plains, it was business as usual. Milk production continued to build and was up in Illinois, Indiana, Iowa, Michigan, New York, Ohio, South Dakota, and Wisconsin—New York, too, although not apart of the Midwest and Northern Plains. Minnesota was one of the exceptions as production fell 0.7%.

[01:52] July US milk production was revised down 35 million pounds which brought overall milk production down 0.7% across all 50 states. The US milking herd was revised lower, too. It was revised down by 10,000 head to 9.34 million cows, although milk per cow only saw a 1-pound drop from the original post.

[02:17] So, what drove the revised numbers down? Well, Idaho. Idaho’s July milk production was taken down by 29 million pounds lower on a smaller herd and lower yield, and it took the original print which was up 2% versus 2022 to flat versus prior year. Arizona, as many suspected, was also taken down, falling 7 million pounds due to lower yields, the heat, and fewer cows. Other places where USDA revised the July figures downward includ Colorado, Kansas, Michigan, Minnesota, South Dakota, Oregon, and Washington.

[03:00] On the other side of that, USDA also took some state’s production up and the big one was Texas. Texas’ milk totals were increased by 10 million pounds, bringing the state’s monthly total from being down 4.3% against the prior year to down 3.2% instead. Yields there were increased by 15 million pounds per cow and that’s what gave the number a bit of a lift. We also noticed that Iowa, Illinois, South Dakota, and Wisconsin milk volumes were raised on a year-over-year basis.

[03:38] With July’s significant changes down, heavy slaughter until the end of August, and hot temperatures (plus cows recovering from hot temperatures), the team at HighGround actually expects that August’s initial milk production print may be decreased next month as USDA does its broader survey for September data and updates the quarterly data.

[04:00] Another thing that we’ll be watching is the Texas data. There is a lot of new cheese capacity coming on line down there and there are 15,000 fewer cows in August 2023 than in August 2022, and with all of the new capital being built, every cow counts. If milk is not available, processors will look elsewhere and that could potentially drive prices up temporarily.

That’s all I have for now. I am poring over the data looking for stories and interesting points. Stay tuned and watch your inbox for more detailed analysis. Take care.