June dairy cull cow slaughter falls to six-year low

U.S. dairy cows culled for slaughter in June 2014 fell to the lowest level in six years, slipping below 200,000 head for the first time since June 2008.

 In its monthly Livestock Slaughter report, USDA estimated 199,500 culled dairy cows were slaughtered under federal inspection in June 2014, down 9,800 from May 2014, and 20,800 less than June 2013. January-June 2014 slaughter is estimated at 1.391 million head, down 175,600 from the same period in 2013.

For the year to date, 31% of culled cows came from USDA Zone 5 (IL, IN, MI, MN, OH & WI); 26% came from USDA Zone 9 (AZ, CA, HI & NV).


Cattle on feed down 2%

Cattle and calves on feed for slaughter market in U.S. feedlots with capacity of 1,000 or more head totaled 10.1 million head on July 1, 2% less than a year earlier. June placements totaled 1.46 million head (1.38 million net), down 6% from a year earlier. June fed cattle marketings totaled 1.85 million, down 2% from a year ago and the lowest June total since recording started in 1996.

Source: USDA Cattle on Feed report


U.S. monthly dairy costs of production, $ per cwt. of milk sold, 2014










Feed costs







Operating costs








Allocated overhead







Total costs







1/ includes feed; 2/ includes labor







Source: USDA Economic Research Service








June Milk COP steady

Preliminary monthly total average feed costs declined slightly in June, helping keep a lid on total milk production costs, according to USDA’s monthly Milk Cost of Production report. USDA cost estimates are based on total farm costs per hundredweight of milk sold.

Total feed costs (see table above) averaged $13.39/cwt., up 7¢/cwt. from revised May 2014 estimates. June 2013 estimates were not available due to budget sequestration. June purchased feed costs, at $6.82/cwt., were up 3¢, but the second-lowest since March 2012. June homegrown feed cost were down 12¢/cwt. from May, to $6.40/cwt., but the second-highest since July 2013.

Feed represented about 54% of total costs in June 2014.

Total costs, at $24.79/cwt. in June 2014, were up 7¢ from May. Other than feed, there were minimal changes in other operating and allocated overhead costs compared to previous months.


Dairy consumer, producer price forecasts

USDA’s Economic Research Service forecasts consumer dairy product prices will rise 3.0%-4.0% in 2014, slightly above the anticipated increase for all foods either consumed at or away from home. The 2014 projections were unchanged from a month ago.

The Consumer Price Index (CPI) for food measures the average change over time in the prices paid by urban consumers for a representative market basket of consumer goods and services.

June 2014 retail  dairy product prices declined 0.6% from May 2014, but were up 3.9% compared to June 2013. In its initial forecast for 2015, the report projected retail dairy product prices would rise 2.5%-3.5% next year, compared to an all-food price increase of 2.0%-3.0%

Dairy product prices rose just 0.1% in 2013, after increasing 2.1% in 2012.

ERS also analyzes and models forecasts for the Producer Price Index (PPI), the average change in prices paid to domestic producers for their output. June 2014 farm-level milk prices declined 5.6% from May 2014, but remained 19.5% higher than June 2013. June 2014 wholesale dairy prices declined 1.6% from May 2014, but remained 10.7% above June 2013.

According to full-year PPI projections, 2014 farm-level milk prices are expected to rise 5.0%-6.0%, after increasing 8.1% in 2013. Wholesale dairy prices are projected to increase 4.0% to 5.0% in 2014, after increasing 3.6% in 2013. Initial 2015 PPI projections indicate farm-level prices will rise 0.0% to 1.0%, while wholesale PPI prices will increase 1.0%-2.0%.


April fluid sales revised slightly

Editor’s note: Percentages were revised slightly from a previous report; sales volume totals did not change.

April 2014 packaged fluid milk sales totaled 4.15 billion lbs., down 4.5% from the year before, according to USDA’s Dairy Market News.

April sales of conventional products, at 3.94 billion lbs., were down 5.1% compared to April 2013; organic products, at 205 million lbs., were up 7.6%. Organic represented about 4.9% of total sales for the month.

For the year-to-date, packaged fluid milk sales totaled 17.04 billion lbs., down 2.2% from January-April 2013. Sales of  conventional products, at 16.21 billion lbs., were down 2.9%; organic products, at 828 million lbs., were up 13.5%. Organic represented about 4.9% of total sales.