Dairy Report: Will the U.S. Dairy Herd Inventory Stay Level in 2021?
Dairy Report 010521
What could this year bring for the dairy industry? One analyst says he expects to see the size of the U.S. dairy herd to be about the same as it was last year. But he says he does expect to see an increase in milk per cows and an expansion in production.
Outgoing USDA Chief Economist Rob Johansson believes prices for milk will likely move in the opposite direction.
“The all-milk price from 2020 is expected to be about $18 per cwt. and we’re likely to see that dip a little bit in 2021,” Johansson says. “Not by a lot but heading down towards the $17.50 per cwt. level in 2021.”
That adds up to a 2.5% percent drop in the all-milk price. But dairy operators could see a 12-20% rise in feed costs this year, making it more likely that payments will be triggered under the dairy margin coverage program.
Dairy Usage Up Over the Holidays
Baking with dairy products is big around the holidays and it looks like there was a lot of it for people were doing just that this past holiday season. But people have been turning to dairy a lot more throughout the pandemic.
TopData reports that since the start of the pandemic cookie consumption us up 25%. And for the first 10-months of last year the production of ice cream climbed more than 3% with an increase of more than 13% in sales.
As for butter, Farm Journal's Dairy Herd reports supplies continue to be more than ample. Through October of last year, production had climbed nearly 6%. Experts say strong retail holiday demand for high-fat Class I and Class II products, such as eggnog, ice cream, sour cream and whipping cream, is helpful because it diverts cream away from churns and effectively prevents butter inventories from growing too big.
