Wednesday’s Milk Production report from the U.S. Department of Agriculture — based on December numbers — appears bearish since it contains a hefty 1.7 percent increase in the top 23 dairy states.

Milk production in the top states was 15.693 million pounds, compared to 15.426 million pounds in December 2011.

Across all 50 states, milk production was up 1.6 percent.

Dave Kurzawski, dairy analyst for FC Stone/Downes-O’Neill in Chicago, called the report "bearish." 

“Total U.S. milk production was up 1.6 percent year-over-year ― well above our expectation for a 0.7 percent increase,” Kurzawski said. “The milk production totals continue to come in well above market expectations, though at this point it seems to have little impact on the futures market activity,” he added.

Cow numbers remain “strongly bearish” in comparison to expectations, he said.

The number of dairy cows in the top 23 states rose by 5,000 head on a year-over-year basis.

States in the Upper Midwest showed some of the biggest increases. Wisconsin and Michigan were both up 5.5 percent in December, while Minnesota was up 4.4 percent. California, the nation’s No. 1 milk-producing state, actually declined by 2.3 percent.