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Butterfat Continues to Amaze!

One of the brightest spots in dairy production is the increase in butterfat. The products like cheese and butter consume most of the U.S. milk. With increased butterfat levels, less milk is needed. Milk production is currently growing at about .5% annually (Chart I). Butterfat production is growing by about 1.5% annually (Chart II). Together, the increases in butterfat availability are growing at about 2% annually. This should provide enough butterfat to satisfy the needs for cheese, butter, and other dairy products (Chart III) without any additional cows.

In round numbers, 60% of butterfat goes to cheese, 20% to butter, and 20% to all other including fluid milk. Butterfat is essential to most all dairy products. Products like nonfat milk and 1% fat milk are declining rapidity (see this recent post).

One of the most amazing things is that the growth in butterfat levels, as measured by 12-month moving averages have never been negative in the course of this analysis. The annual growth rate as shown in Chart II ranges from an increase of just .5% to a high of 2.1%. Currently, as of April 2023, the percent growth rate of butterfat is 1.5%. Butterfat production measured in millions of pounds is growing consistently year-by-year (Chart III). In 2017, Federal Order butterfat levels were at 3.8% and currently, they are at 4.1%.

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John Geuss

June 25, 2023

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