Compared to a year ago, California’s milk production has increased, mailbox milk prices are higher, and feed costs and other production expenses have fallen.
In its California Dairy 2010 Mid-Year Review, the California Department of Food and Agriculture (CDFA) reported that mild spring weather in the Golden State, coupled with the availability and affordability of high quality feed, resulted in increased milk production for May and June compared to the same months last year.
For the first four months of 2010, California continued its 2009 trend and recorded decreased milk production, CDFA said. Milk production in California reflected an average negative growth rate of 0.1% for the first six months of 2010, compared to the same period in 2009.
For the U.S. overall, June 2010, USDA reports indicate that compared to June 2009, milk production was up 2.%, cow numbers decreased by 108,000 head, and average production per cow rose by 64 lb./cow.
Comparing first-quarter time periods for 2006 to 2010, feed costs and other expenses for California dairies have returned to 2007 levels.
For the first quarter of 2010, milk cow alfalfa hay costs reached their lowest level of the 2006-2010 time period, CDFA said. During the first three months of this year, costs for grain, minerals and supplements fell below 2008 levels.
The average mailbox milk price paid to California producers for the first quarter of 2010 reached $14.03/cwt., compared to $10.62/cwt. for the first quarter of 2009. The 2010 first-quarter average statewide cost to produce milk reached $13.48/cwt. That puts milk prices at “above cost” levels, CDFA said.
Improved demand for dairy products helped boost mailbox milk prices.
“Commercial demand for dairy products, including global demand, has strengthened compared to 2009,” said CDFA. “This recovery has enabled the commodity prices to remain steady and at higher levels than last year.”
Through June 2010, compared to the same period in 2009, California dairy product growth continued to be focused on butter and powder products, with total cheese production slightly above last year levels.
CDFA’s report also noted that the 492 highest-producing dairy farms, or 29% of the state’s dairies, produce 66% of the state’s milk marketings. The 516 lowest-producing dairy farms, or 30% of the state’s dairies, produce only 6% of the state’s milk marketings. Dairies producing less than 249,000 lb. of milk per month, or 145 dairies, accounted for less than 1% of the state’s milk marketings.
In May 2010, 161 dairies produced greater than 5 million pounds of milk per month. Tulare County remains California’s No.1 milk-producing county, pumping out 5.569 billion pounds from January through June 2010.
