June’s 2% Increase in Milk Production Is the Year’s Highest

USDA reports significant increase in the U.S. dairy herd and highest per-cow production for June since 2003.

Dairies in the 23 major milk-producing states last month increased their output by 2% over June 2013’s total, USDA reported today. 

Last month’s U.S. milk production reached a hefty 16.2 billion pounds, which analysts called "bearish" for milk prices.

In the same report, USDA also revised its May production number, raising it by 1.6% from May 2013's output, to 16.9 million pounds. The increase pushes May 2014's production to 7 billion pounds over last month's output. That doesn’t surprise AgDairy’s Robin Schmahl, who says June’s milk production drop from May was seasonal and expected.

Still, June’s 2% increase over year-earlier levels "is the highest percentage growth we’ve seen this year," said Schmahl, a Wisconsin-based dairy market analyst and commodity trader. "It’s been going up each month, and that’s going to continue through the end of the year unless adverse weather or some event takes place."

Schmahl was surprised, however, by a number elsewhere in USDA’s report. "I estimated USDA would increase the number of milk cows by 6,000 head, but instead it almost doubled it," he said. "That’s pretty significant."

USDA pegged the size of the dairy herd in the 23 states at 8.57 million head, 11,000 more than in May 2014. Since December 2013, the U.S. dairy herd has increased 64,000 head, Dairy Farmers of America noted today in its "Daily Market Update" e-newsletter.

Total U.S. milk production in all 50 states reached 17,265 billion pounds, up 1.9% from June 2013.

USDA has projected record-high milk production in the U.S. this year. Its latest forecast, released July 11 in the World Agricultural Supply and Demand Estimates report, calls for 205.9 billion pounds of milk in 2014.

Per-cow production in the 23 major dairy states averaged 1,888 lb. for June 2014. That’s the highest production per cow for the month of June since the 23-state series began in 2003, USDA said in today's report.

All 23 states except Ohio tallied milk production gains last month. Colorado led the percentage increases with a 9.7% jump over year-earlier levels, to 306 billion for June 2014. Milk output rose by 8.3% in Texas and 7.4% in Kansas. Ohio’s output slipped by 1.5% from year-earlier numbers to 451 million pounds.

"The overall growth in U.S. milk output reflects the higher milk prices as well as declining feed prices, which are making it a profitable year for dairies," Schmahl said. "New-crop corn prices closed today at $3.78 per bu., nearly half of what they were last year."

Read the report here.