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Heat Takes a Terrible Toll on Milk Yields

The T.C. Jacoby Weekly Market Report Week Ending August 25, 2023

U.S. milk output turned negative in July, as the heat took a terrible toll on milk yields. The milk production map and the July weather maps look nearly identical. The August weather map – and presumably the milk production map – will look much different.


U.S. milk output turned negative in July, as the heat took a terrible toll on milk yields. Milk output totaled 19.08 billion pounds last month, down 0.5% from July 2022. The milk production map and the July weather maps look nearly identical. Simply put, milk output was down hardest where it was hottest. The August weather map – and presumably the milk production map – will look much different. Tropical Storm Hilary brought unusually mild temperatures to the West Coast, but the Upper Midwest is scorching. Through much of the summer, dairy producers in the heartland reported only modest declines in milk yields relative to the spring peak. But the bulk tanks are not as full today.


Dairy producers cashed a paltry milk check and some surprisingly large beef checks in July, and they culled hard. But the dairy herd barely budged. USDA estimates the dairy herd shrank by only 3,000 head in July. But the agency cut another 5,000 head from its estimate of the June milkcow head count, bringing the May-to-June decline to a steep 21,000 head. There were 9.4 million cows in U.S. milk parlors last month, 13,000 fewer than there were a year ago. A steeper setback in cow numbers is likely in August. Setting aside slaughter volumes in 1986 during the cow-kill program, dairy slaughter volumes have been record high for this time of year in four of the last seven weeks.


Both cheese and butter stocks tightened in July, which helps to explain the strong showing for both commodities in the spot markets last month. Butter inventories dropped 20.4 million pounds from June to July, an unusually steep decline. There were 347.5 million pounds of butter in cold storage warehouses last month. That’s 5% more than the very small volumes reported a year ago but considerably less than the mountain of butter in storage in July 2021.


August 28, 2023

dairybusiness.com




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