The dairy industry is making an effort to temper production in response to lower milk prices this year. Milk prices at the farm, as reported by USDA-National Agricultural Statistical Service (NASS) during the July-September quarter were down 10% from a year earlier. That was the fourth consecutive quarter that milk prices averaged less than the same quarter in the prior year. In response to this price trend, the dairy cow herd during the summer quarter was reduced by 27,000 head compared to 2017’s, or down by 0.3%.
Even though there are fewer milk cows in the U.S. than a year ago, output is still rising. Milk cow productivity is increasing at a faster pace than the reduction in cows. Milk production during the summer quarter was up 0.9% from a year earlier as cow productivity improved by 1.2%. Some of the increase is attributable to technological advances in production systems, and some is due to geographical shifts from regions with lower cow output to areas of the natoipn with higher per cow milk production.
The geographical issue is most noticeable between trends in the Eastern Cornbelt and Northeast when compared to the Southwest and Western states. Using data from the 23 states listed in the NASS Milk Production report, the milk cow population in the Upper Midwest (IL, IN, MI, MN, WI) and Eastern states (NY, PA, FL, VA, VT) has declined by 61,000 head from October 2017 to October 2018. Meanwhile, the milk cow population in Texas, Kansas, and Colorado (for the most part, the eastern half of the state) has increased by 49,000 cows during the same time interval. Milk produced per cow in the eastern and mid-Atlantic region described above was 1,804 pounds per month in October 2017 and declined slightly to 1,795 pounds per month this October. These cows that were being removed from the dairy herd were being replaced by cows in the Southern Plains states that produced 1,954 pounds of milk in October 2017 and 1,990 pounds of milk this October. Reconciling the trends in just these states regarding milk production between October 2017 and this October shows a 0.9% increase. That compares to the USDA-NASS estimate of milk production for the United States over the same time period of a 0.8% increase.