Dairy exports are forecasted to decline some from last year’s record, as milk production is increasing in each of the five major dairy exporters. But, after rather poor milk production in each of these exporters last year, and strong world demand, there are not surplus dairy stocks in any of the countries. It will take some time to rebuild stocks, and world demand is expected to continue a strong level. So, U.S. dairy exports ought to remain at high levels through the first half of the year, and end the year down only slightly from last year’s record.
The level of milk production is the major factor on how long milk prices hold. Margins for dairy producers are very good, and history says dairy producers will maintain or increase cow numbers and feed for high milk production per cow. Despite high slaughter cow prices, dairy farmers may reduce culling of cows. The Jan. 1 cattle inventory also shows the total number of dairy replacements about unchanged from a year ago, with the number to calve this year up by 1.8%. However, lower quality forages appear to be reducing milk per cow in some states like Minnesota and Wisconsin.
USDA’s report on January milk production shows milk per cow compared to a year ago down 1.2% in Minnesota and 2.9% in Wisconsin. Of the 23 reporting states, milk per cow was down in 10, with the average increase of 0.9%. Tighter supplies of quality forages may be reducing cow numbers in some state. Cow numbers were down 1.1% in Minnesota and 2.4% in Idaho. Of the 23 reporting states, cow numbers were down in 9, and just 0.1% higher.
Compared to a year earlier, January milk production was up in 16 states and lower in 7. California, plagued most of last year with high feed costs resulting in unfavorable dairy producer margins, ended up with 1.3% less milk than 2012. But, much improved milk prices and lower feed costs are resulting in increased milk production. In January California had 0.1% more cows producing 4.6% more milk per cow, resulting in 4.7% more milk.
Texas which increased milk production just 0.1% last year, increased cow numbers by 1.1% and milk per cow by 2.1%, for an increase in milk production of 3.3% in January. Compared to January a year ago, milk production was up just 0.8% in Arizona and 0.4% in Idaho, and down 0.9% in New Mexico. In the Northeast, milk production was up just 0.3% in New York and 0.4% in Pennsylvania, but down 1.3% in Ohio. In the Upper Midwest milk production was up 1.3% in Michigan, but down 2.3% in Iowa, 2.1% in Minnesota and 2.9% in Wisconsin.